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February 19, 2009

Gates Foundation to assist cocoa, cashew farmers

by Kristi Heim

West African farmers, including young children, supply 70 percent of all cocoa, satisfying the world's cravings for chocolate while staying on the verge of starvation themselves. Annual incomes average $30 to $110 per household member, according to the International Institute of Tropical Agriculture.

In West Africa, farmers might get half of the international cocoa price, while in other countries farmers are getting up to 90 percent of that price, says Rajiv Shah, agricultural development director at the Bill & Melinda Gates Foundation.

Trying to raise the margins for farmers, the foundation is giving $23 million to the World Cocoa Foundation, a non-profit industry group of 70 companies, in a partnership to improve productivity and market access.

Some of the World Cocoa Foundation's members, including Hershey and Mars, have been criticized by the International Labor Rights Forum for failing to honor their commitment to ending child labor and ensuring transparency in cocoa supply chains. Here is the 2009 company scorecard.

Hershey, Kraft Foods, and Mars, along with Archer Daniels Midland and Cargill, were among those contributing $42 million in cash and in-kind donations to the Gates project. Starbucks was also one of the corporate sponsors.

The money will go toward hiring local extension workers to train farmers and provide much needed technical and management support.

The five-year project will reach about 200,000 small cocoa farming households in Cameroon, Cote d'Ivoire, Ghana, Liberia, and Nigeria, with the goal of doubling their incomes by 2013, says Shah.

While farmers in Malaysia produce 800 to 1,000 kilograms of cocoa per hectare, those in Ghana and Cote d'Ivoire produce 200 to 500 kilograms per hectare, he said.

"We can double or triple that just by improving the use of best practices, appropriate fertilizers and better tending to the trees," Shah said. "That's a big output gain."

West Africa produces a third of the world's cashews, but the lack of processing facilities in Africa makes the market inefficient and denies Africans the economic benefits of jobs in the sector.

With a $25 million Gates grant to the German development organization Deutsche Gesellschaft fur Technische Zusammenarbeit (GTZ), the cashew project aims to help 150,000 small cashew farming households in Benin, Burkina Faso, Cote d'Ivoire, Ghana, and Mozambique increase their incomes by 50 percent over the next three years.

GTZ will lead the cashew project with assistance from the African Cashew Alliance (ACA), FairMatch Support and TechnoServe. Financial supporters include Kraft Foods and Costco Wholesale.

The roots of the problem of poverty behind sweetness are related to free trade, structural adjustment, and corporate control, says the group Global Exchange, which promotes fair trade products.

Prices are low because "major chocolate and cocoa processing companies have refused to take any steps to ensure stable and sufficient prices for cocoa producers," the group said.

Fair trade advocates may take a dim view of the program, considering that fair trade is not the aim of the corporations involved.

World Cocoa Foundation President Bill Guyton says the Gates-funded program is "looking at improving environmental, economic and social aspects of growing the crop," but that his group "does not get involved with certification of products."

Still there is one thing that both sides can agree on as a benefit: cutting out the middleman.

Seattle Times

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