How it works: an additional premium:
Until there is a sustainable solution for the ongoing low cocoa prices, we bridge the gap between the floor price the farmer gets and the living income he or she should earn with Tony's premium. Tony's premium consists of two partsL the Fairtrade premium and the additional Tony's premium. The premium is determined at the start of the chocolate season, based on the minimum farmgate price determined by the governments of Ghana and Ivory Coast. At that time we check if our data on farming costs and livelihood are still correct. This way, we can adjust the premium in a way that the farmers we work with are being paid a decent income, enabling them to provide for their family.
Tony’s premium over the 2017/2018 season was $ 400 per tonne cocoa in Ivory Coast and $ 175 per tonne cocoa in Ghana. These figures are on top of the Fairtrade premium of $ 200 per tonne cocoa also paid by Tony's. In the past season, we worked with 5.021 farmers who got paid these extra premiums.
Rule #3 strong farmers
We invest in the cooperatives we work with and help to make them stronger. We show them how to operate more professionally as an organization, help them achieve economies of scale and create commitment and trust amongst the farmers. Strong cooperatives offer many benefits for farmers. For instance, they can negotiate a better price when buying production resources collectively. Farmers who are not members of a cooperative often experience way more difficulties. We are proud of the commitment shown by the farmers we work with. There's always a huge turnout at the annual general meetings in both Ghana and Ivory Coast. Talk about a full house! We ensure that delegates from Tony’s are there too, so we can get to know the farmers even better and see that our premium is being put to good use.
Rule #4 the long term
We work with farmers for at least 5 years. That way they know they'll receive the Tony’s premium for their harvest for the next few years. That gives them the opportunity to make long-term investments in their farms. For example, they can buy new cocoa plants for a better harvest for example, or invest in farming equipment or training. As a result of our long-term relationship, we see that the farmers are now more aware of the consequences of child labor. There are projects that address issues such as child labor and farmers’ rights, like the Child Labor Monitoring and Remediation System (CLMRS) which surveys the cooperatives and helps improve living conditions for farmers. Before we can start talking about eliminating illegal child labor or modern slavery, it's necessary to create supportive conditions in the community.
And by the way, in our collaboration agreement there's a transparancy clause. We think it's absolutely fine that cooperatives share our agreement with other potential buyers. This way they can That way they can negotiate the same commitment and agreements. And..drumroll! This year we saw results. The cooperative ABOCFA has won Taza Chocolate and Uncommon Cacao with longterm commitments for their biological cocoa. We're superhappy with that!
Rule #5 improved productivity and less dependency on cocoa
Not only does the price of cocoa need to be higher, but so does the production. Everyone has to take responsibility for our recipe to work. A good farmer supported by a professional cooperative that achieves economies of scale, should be able to produce 800 kilos of cocoa per hectare. Yet many farmers only produce 30% to 40% of what we think should be possible. This means they miss out on income. Also, the quality of the beans is often poor – many beans don't even get exported. The Tony’s premium encourages farmers to improve their crop. As their farms become more profitable their motivation increases. A win-win! It also enables them to invest in production resources, like better fertilizer, in pruning their trees at the right time and planting new cocoa trees. This increases the quality of their beans and can double their productivity. Of course, we’re realistic enough to realize that while this can happen relatively quickly, it doesn’t happen overnight. That’s why we work with farmers for at least 5 years.
In short, motivated farmers with basic training and a willingness to cooperate and invest more time in their farms can easily harvest 800 kilos per hectare versus the 350 to 550 kilos they currently harvest.