Background Information:

Cacao
The cacao (cocoa) tree is native to the tropical rainforests of South and Central America. The fruit of a cacao tree is a pod (approx. 20cm long) and the pods grow directly onto the trunk and branches. Each pod contains 30 to 40 seeds that are called beans. The trees grow in lowland areas near to the Equator where the following conditions are found:

• average annual temperatures around 26°C
• regular rainfall totalling over 2000mm a year
• no strong winds that can damage the trees and pods
• deep, rich soil

The mature cacao pods are cut from the trees and split open. The beans inside are embedded in a pulpy mass. They are extracted, spread out on trays and dried in the sun; after which they are packed in sacks ready for the market and before being exported. Cacao trees were introduced and planted in new regions of Africa and Asia and cacao is now a major source of income for 11 million farmers, mainly in South-East Asia, South and Central America and West Africa.

Almost 70% of the world's cacao is grown in West Africa but the main cacao-producing countries are given in the table below:

World cacao (cocoa) bean production 1997 - 98 (million tonnes)

Cote d'Ivoire is by far the world's leading producer - in 1998 it produced 41% (1.1 million tonnes) of the world's cacao beans. Cacao seeds were first brought into Côte d'Ivoire from neighbouring Ghana and cultivation gradually spread westwards right across the country. Most of these are grown on small farms of about 1 to 3 hectares (up to 1100 trees per ha) and there are an estimated 1-2 million cacao farmers in Cote d'Ivoire.

Chocolate
There are four main products from cacao beans - cocoa powder, plain chocolate, milk chocolate and cosmetics. When the cacao beans arrive at the factories they are cleaned, roasted and their hard skins (hulls) removed. The beans are then ground into a paste and the fat (called cocoa butter) is separated out. The remainder is dried into a powder called cocoa. The cocoa butter is used for making cosmetics. The powder, together with the cocoa butter, milk and sugar is used for making chocolate. The steps involved are more or less the same for milk and plain chocolate, with the exception of adding milk.

The beans were first used to make a bitter drink called chocolatl over 600 years ago. J.S. Fry & Sons produced the first 'eating chocolate' and the first milk chocolate was produced in Switzerland in 1875 by adding powdered milk to the cocoa. By the 1930s, companies like Cadbury, Mars and Rowntree were mass-producing a range of chocolate confectionery in the UK.

Organic Farming
Montezuma's chocolate factory in Sussex produces high-quality organic chocolate products.

What is organic farming?
Organic farming depends upon the development of biological cycles using 'natural' methods to grow produce. Crops are grown in rotation and animal manure, compost and natural additives are used to enrich the soil instead of artificial fertilisers and pesticides. Crop yields are lower than intensive farming methods and the prices of the produce are often higher. Environmentally, the organic matter improves the soil fertility and river and drainage pollution is minimised. Birds, insects and wild animals are encouraged in an environment where natural predators will maintain a balanced population. Organic farmers rear animals naturally and with great concern for their welfare. They also help to conserve the wildlife and natural habitats around their farms. Products grown/produced by using organic farming methods are considered to be healthier because medical problems linked with handling farm chemicals are prevented. The absence of chemical residues from fertilisers and additives in processed food makes the products safer to consume.

What is intensive commercial farming?
Intensive commercial farming is structured to give high yields per hectare. The land is cultivated annually, is not left fallow and artificial fertilisers and pesticides are used to maintain (or increase) fertility and to reduce the dangers of blight from insects and 'pests'. Supplies of produce are usually plentiful and prices of produce are competitive.

Fair Trade
The Fair Trade movement gives a commitment to improve the livelihoods of cocoa farmers and their families. The aim is for all farmers to receive a fair return for their cocoa crops - Fair Trade is one way of achieving this goal. Fair Trade buyers pay the farmers promptly and give them a guaranteed price usually higher than the market rate - known as the Fair Trade premium - making their way of life more sustainable. The premium, which is above the minimum or world market price goes into a social development fund run by the cooperative. Farmers collectively are helped to market their produce, which can result in 15-20% increases in producer prices. Ethical working practices are used in which cacao is grown and harvested under internationally acceptable conditions with regard to the use of labour of all ages. In 1993, the Ghanaian state monopoly on the cocoa trade ended, and 22 village societies in Kumasi formed their own co-operative - Kuapa Kokoo.

Today there are about 250 village societies in Kuapa Kokoo. Because the co-op sells to the Fair Trade market, they are guaranteed a price that will not fluctuate with the open market. This Fair Trade premium is used to pay for community projects and to give all members an annual bonus. Fair Trade works best with farms that have access to communications and warehousing facilities and can therefore form cooperatives. The vast majority of cacao farmers (there are over 600,000 small cocoa farms in the Cote d'Ivoire alone) do not have access to this level of infrastructure as many are small family-owned operations in remote areas. As a result they are not part of any cooperative group and they are unable to benefit from the Fair Trade system. The market for Fair Trade cocoa is also relatively small - less than 0.1% of cocoa sold worldwide is through the Fair Trade system.

The principles of Fair Trade can create difficulties for companies that are operating in very competitive world markets. The price of goods in shops will affect a customers' decision to buy a product and companies, in order to maintain (or increase) their share of the market, are always looking to keep down their production costs. If the market price of goods is too high because of the production costs then sales can drop, the share of the market falls and this can affect the value of the company on The Stock Market. Shares fall, the shareholders who have invested in the company are unhappy because the value of their investments will fall. The company directors will then look at ways of reducing costs which could involve cutting back on the supplies of raw materials (the farmers would be immediately affected if the demand for their produce was cut); reducing the company size and making some of the workforce redundant or even closing the factory and relocating to another country where the running costs are cheaper. All this may be an extreme scenario and it is hoped that most companies would wish to avoid unethical, unfair market practices and exploitation of people.