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UTZ Certified impact report finds that certification improves yields and farmers’ income

08 March 2014

According to articles in Confectionery News, in the 2012/13 crop year, UTZ Certified cocoa represented 14% of global production (some 534,614 tonnes), up from 5% in 2011/12 and over 100 times more than four years ago. UTZ Certified, a label and programme for sustainable farming of agricultural products, hopes to have “half of the world’s cocoa volumes farmed sustainably within the next decade”. Taking all forms of sustainability certification into account, some 20% of total production is currently farmed sustainably.

To date, “five of the top 10 chocolate producers have committed to UTZ Certified cocoa, … Barry Callebaut, Cargill, Mars, Nestlé and Natra.” UTZ Certified expects other companies to come on board, as they believe that sustainability certification is “a sector-wide challenge”.

The extent to which other companies take up sustainability certification (including prohibitions on the use of child labour) could well be influenced by the legal case launched in January 2014 in a Californian court by three Malian men who “have won the right to bring their civil child slavery case against Nestlé, Cargill and Archer Daniels Midland (ADM)”. The companies concerned deny the charges and maintain their commitment to “working towards a cocoa supply chain where no children are subject to dangerous or forced working conditions”. However, the case is raising questions surrounding “supply chain traceability and responsibility”, with development NGOs maintaining that “child trafficking and labour is still rife” in the cocoa industry.

UTZ Certified maintains that “certification is one of the most potent tools for chocolate makers to avoid serious cocoa shortages and to improve the lives of farmers.” In its latest impact report, the results of 24 external studies are reviewed to assess the impact of certification on farmers’ yields and incomes. The report, published in January 2014, found that among certified Ghanaian cocoa growers, some 95% “doubled or tripled their yield and improved their income due to implementation of UTZ farming practices”, while productivity increased from 200 kg/ha in 2008 to 512 kg/ ha in 2012. The certified farmers were found to enjoy better access to credit and “were more likely to implement” improved farming techniques.

Despite these positive factors, Han de Groot, Executive Director of UTZ Certified, commented that “being a cocoa farmer is still an economically difficult road”: the farming population in the main West African cocoa producing countries is ageing, and there is little incentive for younger farmers to come into the industry. The situation is further complicated by “restricted access to finance and land titles as well as [outbreaks of] pests and disease”.

Currently most UTZ Certified cocoa comes from Africa, but growth (in terms of volume) is fastest in Latin America and Asia (Indonesia, Brazil, Central America and Vietnam).

UTZ Certified maintains that it teaches farmer organisations business skills that enable them to “negotiate a fair price”, with this yielding a commercially determined price premium. UTZ Certified considers that “premiums are important, but must be part of a market mechanism”, since “a negotiated premium is more effective than a fixed premium – the productivity can be far more significant for farmers.” They noted that Fairtrade “guarantees a $2,000 per MT tonne minimum price and a $200 premium for farmers”.

Editorial comment

The UTZ Certified impact report once again raises the issue of which type of certification delivers the greatest benefits to cocoa producers. Clearly, a minimum price of US$2,000/tonne provides little additional benefit to producers when market prices have remained above this level since November 2007. However, Confectionery News reported in November 2013 that UTZ Certified cocoa secured average price premiums in 2012 of US$151/tonne compared to the guaranteed Fairtrade premium of US$200/tonne. But UTZ Certified also emphasises its focus on boosting yields and ensuring quality – without attaining the necessary quality, beans can remain unsold whatever their certification.

Given UTZ Certified’s aspirations for 50% of world cocoa to be farmed sustainably, and certified, questions arise:

  • What would be the market effects of the increases in yield generated by improved UTZ farming practices on the total supply situation?
  • Could this put pressure on prices, despite the rapid expansion of demand for cocoa in Asia?

In addition, if sustainability certification becomes mainstream after 2020, accounting for more than half of production, price premiums arising from certification could well disappear. This has been the experience in the tropical wood sector, where certified tropical wood no longer generates a premium but is simply a prerequisite for being placed on developed markets.

Any adverse price effects arising from the generalised adoption of sustainability certification would be likely to further undermine the basis for renewal of the cocoa farming population in the major West African cocoa producing countries, where this is now a serious challenge.


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