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February 19, 2007

Ghana cocoa farmers launch chocolate company in U.S.

Until 1993, all marketing of Ghana's cocoa production was controlled by the government. Soon after legislation that year liberalized trade and marketing, a group of Ghanaian farmers organized a cooperative, Kuapa Kokoo, aimed at reaping the benefits of new trade opportunities.

In 1997, Kuapa Kokoo decided to create its own chocolate company. Support came from three groups in Britain: the Body Shop company, the relief and development organization Christian Aid and Comic Relief, a group that uses comedy to raise money to fight world poverty. The next
year, with a loan guarantee from the U.K. Department for International Development that enabled the farmers to secure commercial credit, the Day Chocolate Company was formed.

Divine Chocolate, a fair-trade enterprise partially owned by Kuapa Kokoo is a company recently launched in the United States on Valentine's Day, a big chocolate-giving occasion in the U.S.

Comfort Kumeah, a mother of five and an elected member of the farmers' union board, attended the U.S. launch. She said Kuapa Kokoo is organized democratically on community, regional, and national levels, with women in leadership positions at each level.

According to the United Nations Conference on Trade and Development , cocoa prices are especially volatile due to overproduction and boom-bust cycles. Kuapa Kokoo farmers now receive a fair trade price of $1,600, close to the global market price, and a $150 social premium per ton of cocoa, distributed to farmers through the cooperative's projects.

Because cocoa production is both labor-intensive and seasonal, the social premium provides health services, schools, safe drinking water, toilets, and other income-generating activities for the off-season such as soap-making and mushroom harvesting. About 20,000 farmers currently benefit from participation in the cooperative.

Managing Director Sophi Tranchell said the venture has been successful because the company offered a business rather than an aid solution to the problem of unfair trade. She said the company is already profitable, with plans to issue a dividend, and it hopes its U.S. counterpart will be a similar commercial success. Day Chocolate owns 26 percent of Divine Chocolate, whose other investors include Lutheran World Relief and Oikocredit.

Tranchell said the importance of the two chocolate companies stretches beyond the many benefits they can provide to the cocoa farmers. "They can demonstrate what is possible. With agribusiness dominating so much of the international cocoa market,bigger chocolate companies argue that they don't and can't control what goes on at the farm level. But the reality is that they
can because they are enormous companies," she said. "We hope to set a good example, so that bigger companies will realize that you can run a big company and still have a dignified supply chain."

Careless pesticide use, child labor,low producer prices and unfair practices by the big chocolate companies that control the trade are some of the controversial issues in cocoa farming and trade.

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