Cargill Aims to Pay Farmers $2.2 Million for Certified Cocoa
Cargill Inc. aims to pay cocoa farmers more than $2.2 million in premiums next year for the sales of sustainable beans.
Sustainable implies meeting the needs of the present without compromising the ability of future generations to fulfill their own needs, according to the United Nations. Global cocoa demand has exceeded production for 10 of the past 15 years, according to the International Cocoa Organization.
“We believe if we don’t change there will be long-term deficits in cocoa at current prices,” Taco Terheijden, manager of sustainable cocoa at Cargill Cocoa & Chocolate, said in an interview at a conference in London today. “It’s about changing farmers’ productivity.”
Chocolate makers and traders are driving demand for sustainable cocoa, with many having made commitments to increasing the amount of certified beans they buy. The Netherlands wants 100 percent of all cocoa consumed in the country to be sustainable by 2025, according to the country’s Ministry of Economic Affairs, Agriculture and Innovation.
Cargill’s sustainable cocoa program has led to a 30 percent increase in yields in projects in top producer Ivory Coast in two years, Terheijden said, adding that the cocoa sector must be made more attractive to farmers.
“We need good agricultural practices on the ground, we need access to fertilizers, we need to increase revenue for farmers otherwise they will move to other crops,” he said. “If you don’t increase productivity you cannot generate higher income and if you don’t generate higher income you cannot talk about poverty alleviation.”
Ivory Coast Farmers
Cargill paid $2.2 million in premiums to 26,500 farmers across 21 cooperatives in Ivory Coast this year, the U.S. agribusiness said in a statement Aug. 22. The premiums were paid for the delivery of 20,000 metric tons of certified cocoa between October 2010 and May, according to the statement. That represents about 10 percent of the company’s total cocoa sourcing in Ivory Coast, it said. The company aims to increase the amount of sustainable and certified cocoa it buys to 100,000 tons by 2015, Terheijden said.
More than 50 percent of the payments made this year will go to farmers and the remainder will be used by cooperatives to invest in community projects, according to Cargill.
Armajaro Trading Ltd., a supplier of cocoa, coffee and sugar, wants 50 percent of all the cocoa it trades to be sustainable in five years, Nicko Debenham, director of development and sustainability, said on June 13.
Coffee Sales
The London-based trading house aims to collect at least $2 million in premiums from sustainable cocoa and coffee sales this year, Debenham said on Sept. 5. The premiums collected will be directed to Lindt & Spruengli AG (LISN) and Ferrero SPA-backed non- profit organization Source Trust, which will then invest the money in boosting yields, training farmers and replanting trees, he said. European chocolate makers will drive the demand for sustainable beans, Debenham said in June.
Sales of cocoa under the UTZ sustainability program from January to August reached 26,620 tons, Britta Wyss Bisang, a certification manager at Amsterdam-based UTZ, said at the London conference. UTZ-certified sales may increase to about 125,000 tons by 2013, she said.
“The cocoa industry has realized that they could jeopardize their business if cocoa is not produced sustainably because there won’t be enough,” she said in an interview. “Yields in Ivory Coast are extremely low.”
Coffee roasters are starting to take a greater interest in sustainability, she added.
“We are at that tipping point in coffee now in which the first public commitments have been made,” she said.
Sales of UTZ-certified coffee from January to August totaled 99,089 tons. Demand is forecast to reach 140,000 tons by the end of the year, she said.
To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.
Rate this Page