Kraft Likes Deal with Rainforest Alliance

Kraft, the global food giant, likes the deal it struck with the Rainforest Alliance. So much so, it expanded its commitment to purchase RA certified cocoa from 3,000 to 30,000 by 2012. It’s the first major food giant in Europe to carry the RA seal. That’s still a drop in the bucket given the amount of cocoa it buys but, hey, it’s something. So look for Côte d’Or chocolate with the RA label. Still no fairtrade commitment, though. It seems U.S. based corporations have a really difficulty time with fairtrade. So far, Cadbury stands alone with its fairtrade commitment in Europe. Let’s hope that Kraft’s attempt to buy Cadbury won’t pan out.

According to the press release, the project “Market-Oriented Promotion of Sustainable Certified Cocoa Production” urges farmers to introduce better agricultural practices to get better prices. For six Ivorian cooperatives, “the results have been encouraging. The last crop year alone witnessed improved yields and significant productivity gains, in some cases above 50%. The incidence of cocoa ‘black pod’ disease was also reduced by one third and farmer incomes have improved.”

I’m intrigued by the fact that the press release quantifies the productivity gains but not the improvements in farmers incomes. But that’s not surprising. The entire real focus of all these “better prices for better cocoa” initiatives is on more cocoa rather than better prices. The better prices are supposed to materialize miraculously, but there is no guarantee.

The only thing that’s certain at the moment is this: the current record high prices are due to limited supply. Let’s not be fooled by this rash of corporate conversions to sustainability. At their core is the desire to increase output of cocoa so that prices come down. Once all these “sustainability” project really start rolling, that’s exactly what will happen. After all, that’s what  “market-based”  is all about.

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