ECO-LABELINGToo good to be true?

Lauren Berlamino World ForestryApril 22, 2010

Outline of Presentation

Research QuestionEco-Labeling

Fair TradeOrganicDebate over eco-labeling

Case StudyBelize and cacao production

Concluding RemarksAssessment of Debate and Case Study Findings

Research QuestionDo eco-labeled products actually benefit the environment

and/or the local communities?

ImportanceThere is a debate of whether or not eco-labeling actually has any environmental or social benefits. This research will look at the debate and apply it to one community in Belize producing cacao under eco-labels. It is my hope that this

research will help contribute to the debate through the use of a real situation.

What is Eco-labeling?

Voluntary, environmental performance labeling Awarded by a third partyRoots of movement can be found in growing global concern for environmental protection within governments, businesses, and civil societyInternational Organization for Standardization (ISO) common goal of eco-labeling:

"...through communication of verifiable and accurate information, that is not misleading, on environmental aspects of products and services, to encourage the demand for and supply of those products and services that cause less stress on the environment, thereby stimulating the potential for market-driven continuous environmental improvement."

Types of Eco-labeling

Fair Trade Definition

“Fair Trade is a trading partnership, based ondialogue, transparency and respect, thatseeks greater equity in international trade. Itcontributes to sustainable development byoffering better trading conditions to, andsecuring the rights of, marginalizedproducers and workers—especially in theSouth. Fair Trade Organizations, backed byconsumers, are engaged actively in supportingproducers, awareness raising and incampaigning for changes in the rules andpractices of conventional international trade”

World Fair Trade Organization (WFTO) and FairtradeLabelling Organizations International (FLO);January 2009

FLO Logo

TransFair USALogo

Core Principles of Fair Trade

Market access for marginalized producersSustainable and equitable trading relationshipsCapacity building and empowermentRaising consumer awareness and advocacyFair Trade as a “social contract”Environmental sustainabilityDecent work conditions

Organic Definition

“Organic production is based on a system of farming thatmaintains and replenishes soil fertility without the use of toxicand persistent pesticides and fertilizers. Organically producedfoods also must be produced without the use of antibiotics,synthetic hormones, genetic engineering and other excludedpractices, sewage sludge, or irradiation. Cloning animals or usingtheir products would be considered inconsistent with organicpractices. Organic foods are minimally processed withoutartificial ingredients, preservatives, or irradiation to maintainthe integrity of the food.”

Organic Trade Association

Organic Debate

Better for the environmentRestricts use of pesticides and fertilizers and bans GMOsLower pollutionHigher animal welfare

More energy efficientFertilizers are made with non-renewable resources and restricting use could restrict production / demand

Organic foods are healthier, contain more nutrients, and fewer contaminants More sustainable

Organics produce lower yieldsNeed for more land under cultivation to produce same amount of foodCannot feed the world with organic agriculture

Not very energy efficientLower yields

More expensive for consumerDisease

Organic livestock suffer more diseases because they are not treated with antibiotics and medicines

Not convinced the restrictions on pesticides and fertilizers provide any health benefit to humans

For Against

Photo Credit: http://countryfarmorganics.com.sg/countryfarm/shared/content/CF001.gif

Fair Trade – The Debate

Offers opportunity for greater social justice (Maseland et al. 2002)Conducts trade in such a way that no one is harmed by inequalities in initial positions. Mr. Bretman of FLO International:

“Fairtrade producers can use the premiums they receive to make the necessary investments to diversify into other crops.”

Paid at least $0.05 above market price and it is guaranteedFair trade certification coincides with sustainable practices

Benefits the environment

Different organizations all have their own particular understanding of what fair trade is (Maseland et al. 2002)

Certification is predicated on political assumptions about the best way to organize labor.

Guaranteeing a minimum price does not allow for incentive to improve quality on product

Certification is typically only available to co-operatives or small producers and eliminates plantations or family firms

Eliminates population of plantation workers

Drives down the cost of non-Fair Trade products and hurts non-Fair Trade producers

Inefficient way to get money to poor

For Against

How Fair is Fair Trade?

Maseland et al. (2005)Given income distribution in a poor region, fair trade is superior to free tradeFair trade is fair when it comes to advantage of the least well off in societyPays higher, decent price for certain commodities of lesser developed countriesFair trade is not always a good option as it can sometimes lead to deterioration of its own fairness, however, free trade and protectionism are less optimal casesEffects of fair trade are dependent on type of sector

Fair trade should study the characteristics of markets they consider to enter

The Economist (2006)“Paying a guaranteed Fairtrade premium--in effect, a subsidy--both prevents this signal from getting through and, by raising the average price paid for coffee, encourages more producers to enter the market. This then drives down the price of non-Fairtrade coffee even further, making non-Fairtrade farmers poorer.”

Cacao Production in Southern Belize

Case Study

Belize

Photo credit: http://www.lib.utexas.edu/maps/americas/belize_rel_03.jpgPhoto Credit: http://www.summerinbelize.com/grc/sml_map.gif

Quick Facts About Belize From CIA World Factbook

Official Language: EnglishPopulation: 307,889 (July 2009 estimate)Life Expectancy: 68.2 yearsEthnic Groups (2000 Belizean Census)

Mestizo 48.7%Creole 24.9%Maya 10.6%Garifuna 6.1%Other 9.7%

GDP per capita: $8,100 (2009 estimate)Agriculture consists of 29% of GDP

Quick Facts About Cacao

Photo Credits: Lauren Berlamino

Cacao fruit: inside of

pod

Theobroma cacaoConsidered at fruitAncient Maya and Aztec cultivation long before Europeans arrivedAncients made a drink called chocolatl (also “Xocolatl”) by grinding roasted cacao seeds with maize, vanilla, chili, annatto, and other spices.Shade tolerant Shade management

History: Cacao Production in Belize

Modern Maya Indians have been growing cacao in southern Belize, following footsteps of ancestors1980s USAID Project

Hershey's was set to be the original buyer of cacao produced in the areaEstimated prices of cacao were $1.75 per pound (0.45 kg = 1 lb.) However, when the trees were ready for production, the actual price of cacao had dropped to $0.55 cents per pound

1993 Green and Black’s Organic Chocolate, from London, was in need of a new organic supplierEntered into a contract with the pre-existing Toledo Cacao Growers Association (TCGA) for organic cacao

1994Fair trade and organic certifications were awarded.

Cacao Farm in Belize

Walking through forest to cacao farm

Photo Credit: Jack Alcorn

Cacao farm and students harvesting diseased cacao pods

Photo Credit: Jack Alcorn

Cacao Harvesting

Students harvesting cacao from podsPhoto Credit: David Barbour

Toledo Cacao Growers Association (TCGA)Farmers sell dried cacao beans to TCGA for price of US$ 1.55 kg (2002 prices)TCGA then sells the cacao to Green & Black’s for US$1.95 kg (2002 prices) and purchases all cacao up to 227 tons. Price is fixed and the quantity Green and Black’s will buy is set under a five-year rolling contract. Price includes:

fair trade premium cost of US$0.15 kgPrice includes organic certification US$0.20 kg

Organic certification also requires farmers to plant at least 8 hardwood shade trees per hectare

Agricultural Impact

USAID program hybrid varieties, chemicals, and fertilizers were used on the cacao trees (Crucefix1998)

Since 1991, no chemicals have been applied to the area (Crucefix 1998). There is also a threat of Moniliasis, caused by the fungus Moniliophtorarorei, which threatens the organic cacao crop.

Can easily be managed with pesticides; however certification would be lostStrict regimes of pruning and shade management are necessary in order to maintain the organic integrity

Diseased Cacao PodsPhoto Credit: Jack Alcorn

Environmental Impact

Organically grown

Shade tree agroforestry preserves biodiversityProvides homes for domestic and migratory species of birds Acts as a habitat for a variety of animals

Minimizes soil erosion

Trees remain intact – carbon sequestration

ContractClause in which any farmer, who plants a mahogany, cedar, mamey fruit, or cohune nut tree as part of the shade system on each acre of land, is given a guaranteed payment of a 5 cent per pound premium (Crucefix 1998).

Individual Fermentation Boxes

Economic Impact

Created employment opportunities

Green and Black’s was paying the TCGA $.078 cents per pound (1998 estimate)

This price was significantly more than the average world market price for cacao at the time (Crucefix 1998).

Green and Black’s also pays for the organic certification for the TCGA annually and the FairTrade Foundation also pays for the FairTrade certification (Crucefix 1998).

Study by Rosenberg et al. (2005) found that

farmers can earn positive financial profits for establishing cacao

Farmers should devote little time to marketing mahogany and only plant mahogany as required by the contract because planting and cultivating cacao is more profitable

Social Impact

Less access to education and health services in the past.Farmers have been able to raise money to afford to send their children to school. Empowerment of women

In 1996, women joined the managing council of the TCGA (Crucefix 1998)Women make an income and thus are given a greater voice in household

Community Drying Rack

Issues with Cacao Farming in Belize

Land TenureDesignated as either nationally owned, privately owned, Maya reservation, protected area, or forest reserve (Rosenberg et al. 2005)Large portions of land is foreign-ownedCultivation is done on leased or non-leased national landFarmers do not typically pay for land they cultivate (unless it is privately owned)

Farmers have reported that they would be willing to pay a rental fee or lease the land to guarantee occupancy rights (Rosenberg et al. 2005

Back to the Debate…In the case of Belize…

Eco-labeling has had positive

Environmental Effects

Economic Effects

Societal Effects

Debates

Both sides of organic and fair trade debates make valid arguments

Eco-labeling may not always have perceived benefits

However, as shown by this particular case study, the benefits of eco-labeling outweigh the alternatives

In conclusion, the benefits of fair trade and organic production may be dependent on the sector. As this particular case study shows, eco-labeling for cacao production in Belize has positive benefits. It would be interesting to see if these benefits are seen across the board in organic and fair trade production

Questions?

Large Drying Rack located at TCGA office

System of community fermentation boxes at TCGA office

Sources and Extra Information

Beer, John. (1987). Advantages, disadvantages and desirable characteristics of shade trees for coffee, cacao, and tea. Agroforestry Systems, 5, 3-13.Bretman, Ian, & Wille, Chris. (9, December 2006). Voting with your trolley. The Economist.Edeso, Maria Dolores. Oxfam GB, (2008). A Gender analysis of the organic cacao industry in the toledodistrictJohnston, Rob. (2008, May 1). The Great organic myths: why organic foods are an indulgence the world can't afford . The Independent , Retrieved from http://www.uga.edu/fruit/cacao.htmlMaseland, Robbert, & De Vaal, Albert. (2002). How Fair is fair trade?. De Economist, 150(3), 251-272.Melchett, Peter. (28, August 28). The Case against organic food does not stand up. The Guardian, Retrieved from http://www.guardian.co.uk/environment/2009/aug/28/organic-food-health-benefits Rosenberg, David E., & Marcotte, Travis P. (2005). Land-use system modeling and analysis of shaded cacao production in belize. Agroforestry Systems, 64, 117-129. The Soil Association and Sustain. (2001). Myth and reality: organic vs non-organic: the facts Retrieved from http://www.farmingsolutions.org/pdfdb/Organic%20Food%20and%20Farming,%20Myth%20and%20Reality.pdfWorld Fair Trade Organization and Fairtrade Labelling Organizations International, (2009). A Charter of fair trade principles Retrieved from http://www.european-fair-trade-association.org/observatory/images/stories/file/002_charterfairtradeprinciples.pdf http://www.ota.com/definition/quickoverview.htmlhttps://www.cia.gov/library/publications/the-world-factbook/geos/bh.htmlhttp://license.icopyright.net/user/viewFreeUse.act?fuid=ODA2NTQxNA%3D%3D