Trading Cocoa Fairly, Ecuador

Help with listening to the programmes

Setting the Scene

Esmeraldas is a remote forested province of northwest Ecuador. To reach much of the province you have to take a canoe from river ports such as Borbon on the Rio Cayapas. But it is from Esmeraldas that ethically-traded cocoa is sold round the world, thanks to a small non-governmental organisation called Maquita Chuchunchic Comercializando como Hermanos (MCCH), which in the local language means "giving a hand to trade like brothers".

The local population is a mixture of Chachi indigenous people and Afro-Ecuadorians who originally came from West Africa. They eat what they can grow here, but they also grow cocoa, their main cash crop and source of outside income. They suffer from a lack of access to government services and markets. One symptom is the difficulty they have in getting a reasonable price for their product.

<back to top

Defining the problem

Cocoa is one of Ecuador's main export industries. And the majority of the crop is grown by smallholders in the remote hills of Esmeraldas. Their remoteness from world markets and heavy reliance on a handful of traders left them vulnerable to exploitation, says Jose Antonio Santos, commercial director of MCCH. "These farmers live in the most isolated areas, where there are few roads and where access is difficult. When farmers harvest the cocoa they have to leave the village for a full day to sell their produce and buy basic products to take back home." But when they arrive to sell the cocoa, after walking for eight or nine hours, the traders tell them that the price has dropped. "He'll say: I'll pay you half. If you don't want to sell, take the cocoa away. The farmer has to sell, or return home with nothing for his family."

<back to top

Taking action

MCCH, a non-government organisation now based in Ecuador's main cocoa-exporting port of Guayaquil, began work in 1985 to help these farmers get a better deal with the outside world. It began buying and exporting cocoa grown by small farmers in 1992.

"To pay a low price is not fair. In MCCH, there is a better income," says Flora Esparanza Valencia Tenorio, a cocoa farmer from Chaflu village. MCCH guarantees its prices, which are broadcast in advance on the radio and paid directly to farmers or co-operatives set up by farmers, often with MCCH's help. MCCH agents have also introduced a more open system of weighing and grading the beans to ensure that farmers get a fair price and to encourage them to grow better quality beans.

There are other benefits. MCCH runs a "cocoa school" to train farmers to be better business managers and to produce better-quality beans. "For us, people come before money," says Jose Antonio. "We don't just try to raise the income of the person, but we aim to raise their whole development."

So popular has its product proved that MCCH now has 800 smallholders on its books and is one of the biggest cocoa exporters in the country. It has buyers among cocoa retailers and chocolate manufacturers across Europe and North America.

The success of the project, both in attracting farmers and selling their produce, has been extraordinary. "They combine real dedication and understanding of community development, but they also really know about business," says Valerie Nelson, a social anthropologist at the NRI who has studied the project's progress.

The chocolate that is made from MCCH's cocoa is, Jose Antonio insists, "the sweetest and best". But along with the flavour that lingers on the tastebuds, customers also buy what he calls "the taste for solidarity". And for many customers that is the sweetest taste of all.>

<back to top

The cast

"We don't just try to raise the income of the person, but we aim to raise their whole development." -- Jose Antonio Santos, commercial manager of Maquita Chuchchic Comercializando como Hermanos (MCCH)

• Flora Esperanza Valencia Tenorio, cocoa farmer from Chaflu village
• Valerie Nelson, a social anthropologist at the NRI

<back to top

Global Relevance

For many, the work of MCCH demonstrates how non-governmental organisations can help small farmers to improve their crop yields and find markets. The key to its success is combining business acumen with social responsibility. It understands the needs of its customers but has its eye firmly on improving the lot of the farmers from whom it buys. "What we're really trying to do," says Valerie Nelson, "is share these lessons elsewhere in other countries, with NGOs and other kinds of companies that are trying to operate in a more ethical manner in their trading."

<back to top

Thinking points

• Farmers may need support to overcome problems such as remoteness from markets.
• The many different types of fair and ethical trading initiatives can bring benefits to poor, isolated farmers.
• But there are risks -- from unrealistic expectations to poor business practices -- that must be overcome before this can be achieved.

Research on ethically traded cocoa in Ecuador was funded by the UK Department for International Development's Forestry Research Programme

<back to top

In The Field is a collaboration between the BBC World Service and the Natural Resources Institute of the University of Greenwich, supported by the Rural Livelihoods Department of the UK Government Department for International Development (DFID)