Do not get us wrong. Fair trade is a good concept, just not for some countries and communities.
This company started 8 years ago as my father, Hernan, did not want to sell his cacao production as the price was too low. It was no enough to cover the expenses. He told us:
"Look who our neighbors are, people who live in extreme poverty and lose money every time they sell. They do not realize about it because they are illiterate and don't know math. They do not run their costs and just sell at the price the buyer is paying. How are they going to surpass extreme poverty like this?".
Over 80% of cocoa production in Colombia is produced by small farmers living in rural areas. By small farmer we mean one producing less than 4 hectares. Rural areas in Colombia are hard to access as the country's war until the 2000s heavily affected its infrastructure development and most of its rural roads are still not paved.
Clear examples of how hard and costly it is to get to these communities are our cacao pickup routes to Rovira, San Bernardo, Falan or Rioblanco.
This picture was taken halfway through our trip to the farms in Rovira. We need to drive over 3 hours to the small village of "La selva", where Alirio Restrepo is always waiting with his cacao pulp. From his farm we will be coming back stoping at each of the farmers' entrance picking up their production, measuring weight, calculating price and paying immediately over fair trade prices.
Distance, time and being isolated are not the only extra costs making small farmers production costs higher than fair trade. We also have to mention the lack of technology in Colombia and many other producing countries.
Harvesting is done manually. The opening each pod is done with a machete and taking the beans off the pod by hand.
Moving the buckets or bags from the harvesting location to the entrance of the farm is done by a donkey in most of the cases. It is important to highlight that most of these families do not own a car or a pickup. They mostly have motorcycles to travel to the town. This is one of the reasons why middlemen exist. The solve the logistic difficulty but at a 25% margin, which dissolves the farmers profit.
Last but not least, we believe that for people in these areas and at the level of poverty they live should have higher profits because they do not only need the money to pay for the bills but also money to be invested in improving their quality of life. Most of these families still live in clay houses, with no electricity, gas kitchens, drinkable water or sanitary units.
Besides paying an over price upfront, we absorb the logistic and the post-harvest costs, freeing farmers of 20-30 days of fermentation and drying.
Juan Choconat ended 2021 paying 78% over Fair Trade price, directly to farmers.
One proposition that we have is that Fair Trade prices should be variable according to the country, size of production and level of technology. This definitely would be challenging to track by auditory firms but it would impact the specific need of farmers more accurately.