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A Fair Living Wage Creates Opportunities for Smallholder Farmers

Updated: Mar 20

sustainable agricultural production

Did you know that 75% of the world's poor are farmers? It’s a staggering stat to remember the next time you check out the local farmers market. Smallholder farmers worldwide struggle to survive. A fair living wage creates opportunities for smallholder farmers.

What is a Smallholder Farm

A smallholder farmer is a family-owned business operating on less than 10 hectares. In reality, most have only 2 to 5 hectares of crops. Estimates vary, but there are around 500 million smallholder farmers in developing nations alone.

The UN Food and Agriculture Organization says, “The world's smallholder farmers produce around a third of the world's food.” And when it comes to cacao, smallholder farmers account for an estimated 95% of worldwide production.

Smallholder cacao farmers depend on international buyers, who set prices that make it hard for them to earn a fair living wage.

Increasing Global Demand for Chocolate Needs Urgent Solutions

Increasing global demand for chocolate products hands an unfair advantage to buyers. They can exploit the growers, who often resort to deforestation, child labour and other unsustainable practices to survive. This requires urgent solutions. It’s time to re-think sustainability and recognize that a fair living wage creates opportunities for smallholder farmers.

The global demand for chocolate, especially high-quality and fine-flavour chocolate, continues to grow. And savvy consumers, increasingly aware of the challenges smallholder farmers face, are more interested in the origins, sustainability and traceability of cacao than ever.

They are willing to shift brands and pay more for traceable products that prove sustainable agricultural practices, verify supply chains and adhere to UN Sustainable Development Goals (SDGs).

Cacao in Thailand: The State of Play

Cacao was introduced in Thailand over a century ago. In 1952, the government started subsidizing cacao to grow the industry. But low interest in the Thai market, low prices and a lack of buyers pushed most smallholder farmers to abandon cacao in favour of the market accessibility and profitability of rubber and palm oil. While both have poor sustainability records, feeding your family is more important.

Today, the demand for chocolate products in Thailand is rising fast. Over 70 chocolate makers have entered the market since 2017, and more will follow. But importing cocoa is expensive, with duties upwards of 28%. According to Statista, the cocoa imports were USD$188.81 M in 2021.

With chocolate on the rise, there is an increasing number of smallholder cacao farmers. They all share similar pain points:

  1. Quality is low

  2. Yields are low

  3. Prices are low

  4. Connecting with buyers is challenging

  5. Long-term contracts and floor prices are non-existent

  6. They lack access to technology and resources

The Genesis of ECOSHIFT

ECOSHIFT grew out of a desire to improve the lives of smallholder farmers on Koh Phayam, Thailand.

It started with KOH KOA, when Linda Chevrier planted over 350 Chumphon #1 cacao trees on the island.

KOH KOA is Linda’s test laboratory, a proof of concept to demonstrate how to shift the island’s smallholder farmers to more sustainable crops like cacao. Her mission is to demonstrate that sustainability can walk hand-in-hand with profitability.

But 350 to 400 trees will not meet surging market demand. To scale the project, Linda founded ECOSHIFT. Its mission is to help smallholder farmers sustainably improve yields and quality, improve post-harvest processes and negotiate long-term contracts with buyers.

The long-term objective is to elevate quality, grow single-sourced fine cocoa on Koh Phayam, and help local members do the same.

Like any good lab, we will explore soil management and post-harvest processing methods that make sense economically and climatically. That includes soil sampling and mitigation as well as fermentation and drying solutions that work in the wet season as well as the dry season.

These initiatives will be fundamental parts of ECOSHIFT’s strategy to boost output and quality, realize higher prices and ensure a fair living wage for smallholder farmers.

Walking Together to Go the Distance

An African proverb says: “If you want to go fast, go alone. If you want to go far, go together.”

At ECOSHIFT, our philosophy is to go far. And scalability is the key. This is why we are creating a collective of smallholder farmers and giving them the tools to improve methods and achieve higher output. But it doesn’t stop there. It also means negotiating long-term contracts and setting floor prices based on quality to help our members earn a fair living wage.

We are building a team of experts from different specialties to realize this objective.

ECOSHIFT Advisors Help Shape Positive Outcomes

From the beginning, we have received advice and guidance from experts around the globe. These people and companies are passionate about equity, sustainability and improving the lives of others.

Antonie Fountain of the advocacy group Voice Network has been a fountain of information. His willingness to share contacts from his network opened conversations with expert agronomist Peter van Grinsven. Peter has worked with global giants and the little guys in cocoa and coffee. His knowledge of soil is deep. Peter will guide ECOSHIFT’s soil management and improvement program, including chemical balances and best mitigation methods.

Thailand has a wet and dry season, meaning water management is critical for half the year. ECOSHIFT welcomes a new partner in Polyter, water retention and fertilizer systems makers. Linda’s lab – KOH KOA – is a real-time experiment in optimizing Polyter levels. Trees were planted with 100, 300 and 500 gm of water retainer and will be analyzed for optimum levels.

A chance encounter on Koh Phayam with Tim Niepel, a sustainability and data expert at Neumann Kaffee Gruppe, opened another door. Tim’s support and willingness to discuss ECOSHIFT provided deeper insights into sustainability, equitable and ethical practices, and what constitutes a fair living income. He has joined the ECOSHIFT team as an advisor.

A critical part of the solution is traceability. Initially, Linda considered building an ECOSHIFT platform that resolved all the pain points. But why re-invent the wheel with an expensive endeavour when solutions exist?

Enter Kristian Doolan and the team at Farmer Connect. Farmer Connect is a Swiss-based technology provider specializing in supply chain traceability. Farmers only need a mobile phone to create a profile and attest to their supply chain. Satellite technology used by Farmer Connect verifies that products do not come from illegally deforested land and helps future EU importers comply with new regulations effective May 2023.

Smallholder cacao farmers depend on chocolate makers. Daniel Bucher of Pridi cacaofevier is a passionate chocolatier and chef who understands the local market and its challenges. As a sustainability advocate, he supports contracts and pricing based on quality, traceability, and verification. Daniel recognizes that his business depends on smallholder farmers, and improving their output and quality directly impacts his business. Daniel supports ECOSHIFT and our mission to build scalable supply chains for smallholder farmers with end-to-end traceability for verification and compliance with EUDR and other standards.

How ECOSHIFT Will Impact Smallholder Farmers

We target smallholder Thai cacao farmers and chocolate makers committed to sustainability and transparency in their supply chains. With the Thai chocolate market estimated to grow at 6% annually, we aim to position local production to take advantage of this situation.

By providing technology and data-driven insights to smallholder farmers, we enable them to track their crops and receive personalized recommendations on planting, harvesting, and post-harvest processing.

We work closely with farmers to ensure that they meet our quality standards and can provide traceability information for every batch of cacao sold.

Additionally, ECOSHIFT members agree to follow our Ethical Charter. Training and support services will help farmers follow UN SDGs and adopt sustainable and profitable farming practices.

For chocolate makers, we offer access to a reliable source of high-quality cacao through long-term contracts and established floor prices. This translates into a fair living income for our members and an opportunity to improve their situation and the communities they live and work in.

ECOSHIFT believes the Thai cacao industry has significant potential for growth and development, particularly in specialty and fine-flavour cacao. With its unique terroir and diverse cacao varieties, Thailand has the potential to produce high-quality cacao that is sought after by chocolate makers and consumers worldwide.

ECOSHIFT builds scalable supply chains for smallholder farmers with end-to-end traceability for verification and compliance with EUDR and other standards.

by Tim Morch, Freelance Writer


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