The challenge of fair-trade chocolate

YAMASÁ, DOMINICAN REPUBLIC - For decades, the Dominican Republic exported tons of low-grade cacao, the chocolate bean, primarily to the United States for use in products like chocolate bars and powdered cocoa. Most of the profits from these sales flowed to a few Dominican companies, which dominated the industry. Relatively little trickled down to the island nation’s tens of thousands of small-scale cacao farmers.

So in the early 1980s, when a German technical-assistance group proposed improving the quality of Dominican cacao, government economist Isidoro de la Rosa embraced the plan – with a twist. Instead of implementing a centralized fermentation system to improve the chocolate, as the Germans proposed, he urged a decentralized approach. Associations of Dominican farmers would learn the fermentation process. An umbrella organization would sell directly to world buyers on their behalf.

From that seed of an idea has sprung a powerhouse. The National Confederation of Dominican Cacao Producers (CONACADO), formed in 1988, has 182 associations organized into eight regional blocks. With a 60 percent share, it’s the biggest single exporter in the small but rapidly growing world market for organic cacao. And it has become a big player in another growing market: fair-trade certified chocolate.

Now, some wonder whether success is going to spoil CONACADO’s recipe. As fair trade continues to grow, will its transition into the mainstream enhance its prospects – or prove it to be, ironically, unsustainable?

“What we’re seeing is rapid growth in demand, so there’s ample room for increased production,” says Laura Raynolds, codirector of Colorado State University’s Center for Fair and Alternative Trade Studies in Fort Collins. But “as this market expands, does it begin to undermine the initial values that the movement seeks to espouse?” Ms. Raynolds doesn’t think so, but others aren’t so sure.

On an overcast March day in Yamasá, in a hilly region north of Santo Domingo, the sour smell of the white-fleshed cacao fruit pervades the air. Smoke rises from burning coconut husks, used to roast the cacao seeds. Young men, balancing 150-pound bags of cacao on their heads, make their way toward a warehouse of CONACADO’S Block 2. The piles of labeled sacks inside will end up in Europe, the US, and Japan.

From the beginning, Mr. de la Rosa knew that the farmers’ only chance of entering the cacao trade directly lay in circumventing the Dominican middlemen who controlled access to the market. That meant moving into a different market entirely: high-quality chocolate in Europe.

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