rapport d`audit : guildelines

Transcription

©Alter Eco Copyright
Confidential
RQ ACOPAGRO 01 / 2008
ALTER ECO INTERNAL AUDIT REPORT
ACOPAGRO INTEGRATED PROJECT :
ORGANIC and FAIR TRADE SUPPLY CHAIN
-Alto Huayabamba cocoa single origin
&
CARBON OFFSET CERTIFIED PROGRAM
-Reforestation of native forest & cocoa trees combined
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ALTER ECO INTERNAL AUDIT REPORT
Auditor:
-
Tristan Lecomte
Date: From January 25 th to 30 th.
Period Audited: 2005-2007
Fiscal year considered: 2007
Exchange Rate: 1 Euro = 4.24PEN (Peru Nuevos Soles)
1 US$ = 3,16 PEN
Local weight unit: 1 ‘barrica’ = 6 ‘latas’ = 18kg
1 quintal = 46 Kg
Audit Level 1: Acopagro cooperative, cocoa production and potential on carbon offsetting program.
Audit Level 2: N/A
Context
The chocolate category accounts for an average 35 % of France Alter Eco total sales and 70 % for
Alter Eco Americas. It is a strategic product category for Alter Eco with over 350 tons of cocoa
purchases / year. In order to diversify and secure its supply chains and find new cocoa origins, Alter
Eco entered in contact with Acopagro in December 2007 to assess potential partnership on cocoa
purchases. In particular, Alter Eco is to start new chocolate production with Halba company instead of
Bernrain (El Ceibo and Kuapa Kokoo supply chains).Halba works in priority with Acopagro and asked
us to do so in order to simplify operations. Alter Eco is in discussion with El Ceibo to see how El Ceibo
could integrate this new production scheme and as well produce chocolate in Bolivia on site with
organic and FT Paraguayan sugar (El Ceibo has now the capacity to produce simple formula
chocolates, tests under way).
New production at Halba is to start in april, hence the audit had to be done quickly, because of travel
issues, it was only conducted for 3 days on site, hence this report is just an overview of the activities of
Acopagro.
During the visit, Acopagro manager and producers presented their study about potential carbon
offsetting cacpacities through cocoa and native trees plantation. A detailed study has been done (see
appendix) to assess the carbon offset capacity of an integrated native & coca trees plantation.
Acopagro producers are all already trained, registered and controlled through the ICS (Internal Control
System) for organic production. Hence, the parcels are registered and plantation could be followed in
the same way.
Entities visited:
-Juan Jui Acopagro offices and warehouse
-Santa Rosa producers group in Alto Huayabamba area and their fermentation and drying area
-2 Fermentation and drying areas in Juan Jui (one under construction)
Producer Organizations (Pos) visited:
-Santa Rosa producers groups
Additional visits:
-Tarapoto Trees Nursery, for tree planting
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TABLE OF CONTENTS
I.
General Information ........................................................................................................ 4
1. General information on the country and the macro-economic climate ...................... 4
2. Economic, social and environmental context at the national and local levels ........... 4
3. Weight of the product relative to the local economy ................................................. 5
4. Why Fair Trade in this particular region or country? ................................................. 7
II. The product ....................................................................................................................... 7
1. Product cultivation: farming methods, harvest period, yield, return on investment,
surface cultivated... ............................................................................................................. 9
2. Transformation process and yields between the different stages of the process ...... 12
3. Quality control: HACCP and manuals ..................................................................... 13
III. The Producers and the Producer Organizations. (Pos) .............................................. 14
B. Presentation ................................................................................................................. 14
2. Socio-economic and land loan situation................................................................... 14
3. Product focus : average cultivated surface dedicated to the product, yield, return on
investment, techniques, problems encountered… ............................................................ 14
4. Other products, diversification, opportunities .......................................................... 14
5. Gender issues ............................................................................................................ 15
6. Ethnic and Religious considerations ........................................................................ 15
7. Geographic location, remoteness, accessibility........................................................ 15
B. Participation & Transparency ..................................................................................... 16
1. Entry requirements (membership) & fees ................................................................ 16
2. Minutes of committee and assembly meetings, status, questions raised .................. 16
3. Rotation of comittee members ................................................................................. 17
C. Relations between the groups or the cooperatives and the entity responsible for the
transformation or commercialisation................................................................................... 17
D. Details on the cost price ............................................................................................... 17
E. Fair Trade Value Reporting (FTVR) ............................................................................ 19
IV. The organization responsible for sales & exports ....................................................... 20
1. History, Mission Statement and General Presentation: ............................................ 20
2. Financing of the collective and Fair Trade projects: ................................................ 20
3. Degree of insertion within the local economy and population, links with other local
and international organizations: ....................................................................................... 21
V. FTA 200 ........................................................................................................................... 22
VI. Conclusions regarding the respect of the Fair Trade Criteria ................................... 30
VII. Conclusion ....................................................................................................................... 30
IX. ANNEXES ....................................................................................................................... 32
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I. General Information
1. General information on the country and the macro-economic
climate
Peru officially the Republic of Peru is a country in western South America. It is bordered on the north
by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile,
and on the west by the Pacific Ocean.
Peru is a presidential representative democratic republic divided into 25 regions. Its geography varies
from the arid plains of the coast of the Pacific Ocean to the high mountain peaks of the Andes
mountain range and the tropical forests of the Amazon Basin. Main economic activities include
agriculture, fishing, mining and manufacturing of products such as textiles.
The combination in Peruvian territory of different ethnic groups over five centuries has formed a
multiethnic society. This mixture has resulted in a wide diversity of cultural expressions in fields such
as art, cuisine, literature and music. The country has also a rich cultural heritage, which includes the
UNESCO World Heritage Site of Machu Picchu.
2. Economic, social and environmental context at the national
and local levels
Peru is a developing country with a moderate per capita income and a Human Development Index
score of 0.767 as of 2006 (n°82). According to official sources, 51.6% of the total population is
regarded as poor, including a 19.2% considered extremely poor as of 2004. Historically, the evolution
of the Peruvian economy has been tied to exports which provide the hard currency necessary to
finance imports and external debt payments. Over the years, trade in products such as copper, cotton,
guano, sugar and oil has provided substantial revenues. However, self-sustained growth has proven
elusive as has a better distribution of income.
Economic policy has varied widely over the last decades, the government of Juan Velasco Alvarado
introduced radical reforms, which included an agrarian reform, the expropriation of foreign companies,
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the introduction of a planning system and the creation of a large state-owned sector. These measures
failed to achieve the objectives set by the regime, mainly the end of economic dependence and
income redistribution Despite these results, most reforms were not reversed until the 1990s when the
government of Alberto Fujimori undertook a process of liberalization which put an end to price
controls, discarded protectionism, eliminated restrictions on foreign direct investment and privatized
most state companies. Reforms have allowed sustained economic growth since 1993 except for a
slump after the 1997 Asian financial crisis.
In 2006, the GDP grew 7.7%, and it is expected to grow 6.5% in 2007 and 6% for five years after
2008. In April 2006, Peru signed the Peru Trade Promotion Agreement with the United States,
becoming the first country in the Andean Community of Nations to sign such an agreement. As of June
2006, Peru's Congress had approved the agreement and the pact awaits ratification by the US
Congress. It has free trade agreements with the Andean Community and with many of the countries in
Mercosur, as well as Thailand. Peru is negotiating trade agreements with Chile, Mexico, Singapore
and India.
Economic situation: (est. 2006/2007, source: wikipedia)
GDP: purchasing power parity - $181.8 billion
GDP - composition by sector:
agriculture: 8%
industry: 27%
services: 65%
Population below poverty line: 43%
Labor force: 18 million
Labor force - by occupation: agriculture 9%, industry 18%, services 73%
Unemployment rate: 7.7%
Industries: mining of metals, petroleum, fishing and seafood industry, textiles, clothing, food
processing, vegetables, cement, auto assembly, steel, shipbuilding, metal fabrication and
transformation, wood industry, oil refinery.
Agriculture - products: coffee, cotton, sugarcane, rice, wheat, potatoes, plantains, coca; poultry,
beef, dairy products, wool; fish; nuts
Exports: 23.5 billion fob of goods and products.
2.8 billion f.o.b. of services.
Exports: fish and fish products, copper, zinc, gold, molybdenum, iron, crude petroleum and
byproducts, lead; coffee, asparagus, artichokes, paprika, sugar, cotton, textiles, chemicals,
pharmaceuticals, manufactures, machinery, services.
Exports - partners: United States 30%, Mainland China 11%, Japan 6%, Chile 5% Switzerland,
Germany, United Kingdom, Brazil
Imports: $15.2 billion fob
Imports - commodities: machinery, transport equipment, foodstuffs, petroleum, iron and steel,
chemicals, pharmaceuticals, electronics.
Imports - partners: US 19%, Colombia 6%, Venezuela 5%, Chile 4%, Brazil 4%
3. Weight of the product relative to the local economy
Cocoa is produced in several regions in Peru, regions such as Tumbes, Piura, Cajamarca, Amazonas,
San Martín, Huanuco, Ucayali, Junín, Cusco y Ayacucho.
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Peru's Promotion Commission for Exportation and Tourism (PromPeru) recently released the
commercial report for cocoa in Peru. In its report PromPeru stated that in 2006, the value of Peruvian
cocoa bean exports reached US$ 4.3 million, registering a growth rate of about 114% when compared
to the previous year. The exportation of cocoa beans has increased immensely in the past years. This
can be seen when comparing previous years to the present.
The volume of Peruvian Cocoa beans exported in 2006, was 2,649 tons, that registered a growth of
132 % compared to the previous year. In the period 2001-2006, the growth of the exported volume
was about 138% per year, on average. The main countries Peru's cocoa beans are exported to are
Switzerland and Belgium. They accounted for 67.36% of exports in 2006.
In 2006, the exports of organic Cocoa from Peru amounted to US$ 3.94 million. Out of these exports,
52.28% were beans and 47.72 % were derivative products. In 2006, the exports of organic Cocoa
beans from Peru amount to 977.33 tons with a value of US$ 2.06 million. Between January-July 2007,
exports registered an amount of over 870 tons for a value of US$ 2.5 million. This has placed Peru as
the second world producer of organic Cocoa after the Dominican Republic. The main destination
country of Peruvian exports of organic Cocoa beans is Switzerland. More than 70% of the Cocoa
exports is concentrated in this country. The qualities of the Peruvian bean and the expensive prices in
Venezuela and Ecuador have led the industry to consider Peru’s Cocoa (organic and fair trade). As a
consequence, prices were improved and have reached an average of US$ 3,000 per ton.
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Rodolpho Cometeros Paime, Acopagro producer in Alto Huayabamba area.
This development increases the importance of cocoa for local economy. In Acopagro, producers have
an average field of 5 hectares. 30% of these fields are used for cocoa culture. As the main cash crop,
cocoa is very important for producers. What’s more, cocoa represents a real alternative to coca
cultures and illegal crops for traffic.
With over 900 tons of organic cocoa exported in 2007, Acopagro hence represents a very consitent
part in the organic cocoa exports of Peru. Acopagro is the first cocoa producers in Peru and first
organic cocoa producer as well. It is as such a model of development for the cocoa sector.
4. a) Why Fair Trade in this particular region or country?
Between 1995 and 1998, North of Peru and South of Ecuador were areas of conflict between Peru
and Ecuador. This was a very hard period for producers. Because of the instability of the situation, the
production of coca became the only viable way of making money. Coca had become the only cash
crop for the producers. As they say today, the culture of illegal crop was a good way to earn money
but it was a disaster for the social and relationship situation in the community. Coca production is as
well an ecological disaster, using many chemicals and ruining the land and the forest (coca production
cannot be combined with other crops). The project started as substitution to coca plantations, and
worked well as cocoa now offers the same level of income than coca before, but without the
disadvantages of growing illegal crops. That’s why, the culture of cocoa became so important for these
producers. Organic and Fair Trade came as additional added values to production and are
guarantees of higher prices, bonuses and long term partnerships. Fair Trade strengthen the project
and the sources of income of producers.
Fair Tade objectives:
-Help farmers to stop growing coca
-Help small producers of the area to increase and diversify their income in a legal and sustainable way
-Help preserve the environment : half of the producers are living next to a natural park and along a
river. Many areas are degradated hence the need to contribute to the environmental issues of the
area.
Means deployed to reach these objectives:
-Help producers plant cocoa trees combined (with native forest) and train them on plantation, harvest
and cocoa preparation
-Train and certify them organic & Fair Trade, teach them on organic agriculture and field management
-Increase cocoa production and cocoa quality, manage export and sales.
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-Give additional benefits : chickens, food supplements, bonuses
-Micro-credit loans to producers
-Product diversification like sugar cane
Santa Rosa producers in Alto Huayabamba Area
b) Why carbon offsetting in this particular region or country ?
The north-east part of Perou which is part of the Amazon Forest has been deforested as much as the
rest of the Amazon in Brazil (like neighbouring Rondonia and Acre states in Brazil, with an official 40
% of the forest devastated) and Bolivia. Both for the use of wood as much as for the setting of
monoculture fields (like sugar cane) and in the area of Juan Jui because of coca cultivation which is
particularly damaging for the environment : coca plantations cannot be combined and usually requires
high use of chemicals. See as well UN report on coca substitution attached.
Acopagro project was initiated with the help of the United Nations, as a way to substitute coca with
cocoa. This project has proved to be successful, Acopagro producers already havest more than 2000
hectares of cocoa fields that they have planted. Another 2000 hectares have been planted and will
soon be operational. After two years of plantation, the cocoa trees start to be productive and with the
high prices of cocoa (structural and global market trend which should be long term), producers earn as
much with cocoa as with coca before. So perspectives are quite good and the sustainability of their
plantation is secured by the market. For now these producers where planting without any incentive
and without valuing the carbon offset activity they generate.
A detailed study has been conducted (see appendix) on cabon offset through cocoa and native trees
combined plantations. It shows cocoa fields planted in consortium with native trees like mahogany,
guava trees, tek and other native species can offset up to 30 tons of equivalent CO2 / hectare. Hence,
these plantations can be valued and “sold” as carbon offset. Through this, it can give another incentive
for producers to plant more, and a good diversification of their revenues.
Carbon offset is hence very complimentary with Fair Trade and organic production, the Internal
Control System is already in place for organic production, and producers very well trained on
traceability.
The climatic conditions are very favourable for vegetation growth, hence for carbon offset. Acopagro
has already proved its capacity to plant and secure a sustainable plantation. The need of the area is
very large, both for coca producers, and much as for the damaged environment of the region.
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II. The product
1. Product cultivation: farming methods, harvest period, yield,
return on investment, surface cultivated...




Average cocoa plantation size / producer : 2 hectares
Average number of cocoa tree / hectare : 1000 (+ up to 100 native trees, when cultivation is
combined)
Average yield (Ha):
931 Kgs (14.6 bags). (but up to 1600 Kgs in areas like Santa
Rosa / Alto Huayabamaba that produce cocoa all year long.
Annual income:
2000 to 5000 Euros / year total sales / producer
average.
Acopagro cocoa farming context:
The farmers started to grow cocoa less than 15 years ago, for most of them less than 10 years ago, as
the project started. They used to be coca producers. They have been supported by Acopagro
agronomists to plant and manage their farms. More than 2000 hectares of cocoa trees have already
been planted and produce cocoa while 2000 more hectares are in preparation (planted but not
operational). Most of their species are hybrid and combined with Criollo specie and some “porcelaine”
trees quite famous for their quality. Diversity of species has been chosen to avoid massive plague
destruction.
Main operations on fields :
-Clearing/weeding: This task is typically undertaken twice a year. The typical practice is to slash the
vegetative growth at ground level using a sharp machete. Depending on the amount of undergrowth
and canopy closure, clearing one hectare typically requires between 5 to 7 person days of labor.
-Shade and sunlight: Cocoa tree needs both sunlight and shade. That’s why this is of paramount
importance for a cocoa farmer to make sure that his plantation is provided with shade trees and that
the canopy generated by cocoa leaves is not too important. The provision of good shade will help to
suppress weeds and lead to the early formation of a closed canopy and thereby create conditions
unfavourable to cocoa capsids. Acopagro agronomists help producers dealing with those issues.
This help includes :
- to check shade trees and the amount of sunlight
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to eradicate specific diseases (capsid, blackpod,etc) by using organic methods
to teach farmers how to farm properly (weeding, chippons removal,etc)
NB: Chippons removal= to cut the 2
better development and better pods.
nd
branch of the cocoa tree in order to allow for the first branch a
-Harvesting cocoa pods: The main harvest period is from april to October but in some areas like
Santa Rosa, Alto Huayabamaba area, cocoa beans are harvested all year long, thanks to very
favourable weather conditions (more rain and good sun).
When the pods are ripe and harvested, they are broken by producers in the fields and the beans are
transported to the fermentation station of the society level. The pods are removed with a curved knife
on a long pole. The removal of the cocoa pod from the tree requires some experience to be able to
identify ripe from unripe pods. To produce 1000 kg of marketable cocoa beans, would require
harvesting about 25 000 cocoa pods. It is estimated that one person can harvest approximately 650
pods/day, so a total of 39 work man days.
-Cocoa pod breaking. After the cocoa pods have been harvested, they are then broken with a
machete open and the wet beans separated from the mucilage of the pod prior to fermentation. At a
rate of 2000 pods/person/day, a total of 13 person days would be required
-Field transport. After the wet beans have been separated from the pods, they are transported to
where they will be fermented and dried. In most cases, transport is to the farmers’ concession back in
the village. To produce 1000 kg of dry marketable cocoa requires transporting approximately 2300 kg
of fresh beans. The mean travel time reported by producers in the survey from the plantation to the
home is 45 minutes. Assuming that one person could carry 50 kg of fresh beans per trip taking two
hours per roundtrip, the labor demand for transport is calculated at 15 person days.
-Fermentation. After the cocoa beans are separated, they are fermented for seven days. The process
involves mixing the beans every 24 hours. Acopagro has designed specific fermentation bins and
process quite practical and ensuring good fermentation process (90 % fermentation on beans
inspected).
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The beans are removed every 24 hours, and piled in the bins, during 7 days of "sweating", the thick
pulp ferments until it thins and trickles off. The quality of the beans, which originally have a strong
bitter taste, depends upon this sweating.
-Drying. Once the cocoa fermentation is complete, it is sun-dried. It can take anywhere from 3 days to
one week depending on climatic conditions. In a fermentation station in Juan Jui depending from
Acopagro a sun-dryer was built, allowing better drying conditions and protection from rainfall.
The beans are spread out, constantly raked over, and dried. A thousand ton from Acopagro small
producers where dried like this in 2007. It is estimated that fermentation and drying of 1000 kg would
require 15 person days of labor
-Cocoa transport: Finally, beans are transported to Acopagro wharehouse in Juan Jui, by boat for
Alto Huayabamba producers.
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2. Transformation process and yields between the different
stages of the process
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Organic cocoa production has very low capital intensity. Monetary costs are around 26
1
US$/ha (7 US$/quintal ). These monetary costs are similar for organic and conventional cocoa
production. The difference between both kind of production lies more on labor intensity
allowed by the producer to ensure pest and parasites control.
-
Cocoa organic production is a labor very intensive activity which mobilizes several household
member hand tools (machetes, axes, manual reap tools, pickaxes, barrows and shovels) and
low capital investments (fermentation boxes and mat or wood dryers made with local trees
and vegetables). In monoculture, cocoa requires around 105-110 labor days/ha during the
plantation year, 80 labor days/ha/year during the growth stage and 200 to 210 labor
days/ha/year during the production stage. For associated production plots planted with two
thirds of cocoa, the labor amount needed per hectare represents two thirds of the quantity
required for monoculture.
The intensity of labor is due to the choice to ensure organic production. Indeed, pest and
diseases control is generally ensured by more frequent mowing and pollarding practices.
-
1
Cocoa can be produced in monoculture or more commonly associated with local timber trees
planted or leaving originally on the plot before the plantation. Acopagro producers have
chosen cocoa plantation combined with native trees that bring the necessary shade for cocoa
production.
In general, producers plant 1.5ha of cacao and they own 5ha of land.
Cocoa trees have in average a 20 years development and production life. The development
stage takes the first 2 years and is composed by an initial seed "nursering" and plantation
year, followed by a growth stage from the second to the fourth year. The tree starts
moderately its production in the second year (outstanding cocoa production has been spoted
on 2 years old cocoa trees, due to the very favorable conditions of the Alto Huayabamaba
area) & increases its yield on the fifth year. At this stage the harvest can start & will
progressively fall after the twentieth year.
-
The production starts with cutting (June July) and mowing (June July). They avoid burning.
This alternative implies more work necessary to remove big trees and branches.
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Cocoa seedlings are provided by the coop.
In Alto Beni, 1 quintal (qq) = 46 kg.
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-
During the rest of the first year cocoa production requires at least three times mowing (from
October) and other three pollards (pruning) (starting with a main pruning in October). These
practices also constitute the totality of intervention from the second year to the fourth year.
-
Organic cocoa production is fertilized with biomass produced by cocoa trees (gourds, leaves,
small branches) and by fertilizer plants, particularly kutsu (leguminacea) and glycine, which
are pruned three times a year.
-
In addition to mowing and pruning also done during the production year, producers have to
harvest cocoa gourds and control the fermentation and drying of its beans. These activities
are done 10 times a year, each 15 days, starting from mid-April. Cocoa beans ferment for 7
days and must be aired/returned to develop good flavor inside the beans. During the drying
process cocoa must be protected from rain that would allow mould development or change the
bacteria population and consequently bean flavor.
-
The delivery of dry cocoa to Acopagro is done selling it before to the grassroots cooperative
from the settlers’ community which is affiliated to Acopagro. In each grassroots cooperative
one person is in charge of doing the collect and to store it until the Central comes to keep it
every 15 days.
-
The harvest period starts in April until October, with calabashes picking every 15 days. The
cocoa yields in this area are quite high from 900kg/ha to maximum of 1600 kg / ha in very
productive areas like Alto Huayabamba.
-
That means a very good income for producers because Fair Trade Organic cocoa is sold
3000$/MT (as of end of 2007, after the increase in cocoa world prices). With an average
cocoa plantation of 1.5ha, the producer earns 4050$ every year. And the cooperative gets
270$ of premium for each producers. Acopagro represents 900 producers in 2007. That
means an income of 243 000$ for the cooperative every year with the fair trade premium,
quite impressive.
3. Quality control: HACCP and manuals
There is a very strong quality policy at Acopagro starting with the seeds selection and plantation as
well as at the fermentation and drying station. Agronomists advise producers on how to plant, cultivate
and harvest cocoa to get the best quality of product. Nevertheless, quality procedures are not written
yet. During the visit, producers seemed well trained and the Agronomist very much aware of the
issues and each producer’s field. There is a strong follow-up in the fields and good training on
fermentation and drying. HACCP manual should be written though, and maybe illustrated for
producers at the field level. Quality checks are done both at the society level as well as at Acopagro
warehouse.
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III. The Producers and the Producer
Organizations. (Pos)
A. Presentation
Acopagro cooperative counted more than 900 producers in 2007, plans for 1500 members in 2008
and up to 2500 members by 2010. The project started in 1994, the coop was established in 1997, and
since then, Acopagro has been particularly successful both in terms of structuration of the organization
as well as in the development of its sales. Cocoa sales increased up to 900 tons in 2007 and 1500
tons are budgeted for 2008. Acopagro is a first degree cooperative, composed of 21 groups of
producers (societies) spread in the province of San Martin. Among them, one third of the producers
are located in the region of Juan Jui, and another third in the Alto Huayabamba area (accounting for
300 T of cocoa / year).
During the visit, we met and stayed in Santa Rosa, a society of the Alto Huayabamba area. The Santa
Rosa society is composed of 20 producers.
4. Socio-economic and land loan situation
All producers met were the owner of their land and some were acquiring new land to plant more
cocoa. (one producer of Santa Rosa had just bought 27 hectares for 2000 Euros, thanks to its good
fair trade sales…, showing each producer develop their land). There is more land available to buy and
convert from monoculture (coca, sugar cane,..) to consortium fields (cocoa + native forest). This gives
producers the opportunity to develop their sales, the objective is to bring them from an average 2
hectares of cultivated cocoa trees to a minimum of 5 hectares, for them to reach a decent revenue and
be in capacity to develop even more their farm. The area is quite isolated, especially for Alto
Huayabmaba accessible only by boat, but on the other hand, there is land there to buy and to plant.
5. Product focus : average cultivated surface dedicated to the
product, yield, return on investment, techniques, problems
encountered…
Each producer has a total area of 5 hectares average and 2 hectares of cultivated cocoa fields. On
their field, they harvest between 900 kilos and 1600 kg / ha / year of cocoa, which is quite a high yield,
especially in Alto Huayabamba where climatic conditions are particularly good. Return on investment
starts just two years after plantation, and with higher yields from 5 th year on. Cocoa cultivation
doesn’t need a lot of care, especially regarding weeding as the canopy brings enough shade to avoid
vegetation development.
No main issue or desease encountered by producers. They are well trained and their fields look very
well taken care of and very productive.
6. Other products, diversification, opportunities
Acopagro has started to help its members plant sugar cane, in order to diversify the producers and
cooperative sales. Their plan is to develop unrefined cane sugar sales, organic and fair trade. This
could be a new source of cane sugar for Alter Eco for the chocolates manufacturing.
The main potential for product diversification lies in the planting of trees for carbon offsetting :
A total of 3000 hectares will be planted for the 1000 existing producers on the short term (by 2-3
years) and an additional 7 500 hectares total for the targeted 1500 additional producers that Acopagro
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envisions to gather by 2010 (Acopagro target). Counting 5 hectares of cultivated cocoa trees /
producer, on the longer run (5 to 10 years).
This shows the large potential Acopagro represents in terms of tree plantation :
3 additional hectares * 1000 + 5 * 1500 = 10 500 hectares * 1100 trees (1000 cocoa trees + 100 native
trees) = 11 550 000 trees. And if Acopagro follows the most effective carbon offsetting program, it
represents a potential of 315 000 tons of equivalent CO2 / year of carbon offsetting. (30 Tons / ha /
year for the most effective plantation according to the attached report).
In the attached report, the evaluated cost for tree nursery, plantation and tree management and followup is at 0,25 Euros, which means this new product development could bring up to 3 million Euros to
the coop as an incentive to help producers to plant and develop their land.
7. Gender issues
Majority of members are male but there are women as well (like Merlith del Castillo Pezo who
accompanied us during the visit, see her AEDI in attachment). Women interviewed declared to be well
accepted and felt like any other member. Many women employees at the coop level as well, very good
spirit apparently at the offices and at the producer level and good integration of women, in Peru which
is quite male dominant…
Merlith del Castillo Pezo and her husband Daniele, on the boat going to Santa Rosa
8. Ethnic and Religious considerations
No particular ethnic or religious particularities within the members, mostly Christians, in the remote
villages of Alto Huayabamba there is no church or spiritual temple anyway..
9. Geographic location, remoteness, accessibility
Juan Jui is 3 to 4 hours drive away from Tarapoto city and airport, on a dirt road (road under
construction). Tarapoto is already in an isolated area of Peru, not easily accessible by road (20 to 30
hours drive from Lima). Alto Huayabamba producers are even more remote and only accessible by
boat, 3 hours boat drive from Juan Jui. This means cocoa beans have to be transported on boat to
Juan Jui and then by truck to the Harbour. During heavy rain season, Alto Huayabamba area is hardly
accessible by boat as rough waters make it hard to go upstream. Producers are widespread along the
river, each quite isolated on his field and without any motorized boat. To reach Juan Jui, producers
wait for the “taxi-boats” to take them and their cocoa.
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Producers bring their goods and cocoa to the Juan Jui market by “taxi-boat”
B. Participation & Transparency
Participation is a key subject for Acopagro, as felt during the visit, noted in FLO report (and we
received information from producers on site and by email from producers following our visit, regarding
this subject). The project was started by Gonzalo Rios, former United Nations employee, who is still
managing the cooperative. Gonzalo shows great knowledge both of the development issues of the
area, the producers and the organization. He is a key success factor for Acopagro, with strong
leadership and great understanding of the clients will. On the other hand, this may represent a risk as
he takes care of the whole management of the coop, the coop may be too dependent on him (as
usually the case when the coop is managed by a strong leader). It may lead to a top-down approach
and less participatory organization. Producers have to be empowered on this subject, it is their
organization.
Transparency on the other side is great in terms of documentation and openness of the whole
Acopagro team and members to collaborate and share information. There just seems to be an issue
on participatory aspects which may lead to internal conflicts or the feeling from producers that they do
not own anymore this organization.
1. Entry requirements (membership) & fees
Many new members joined Acopagro lately and another 1500 members are expected to join in the
next couple of years, to reach 2500 producers. This is a remarkable success of Acopagro. To enter,
producers just need to have some land and commit to plant and harvest cocoa trees according to
Acopagro organic and quality rules and procedures. Acopagro is the cooperative of the region’s small
producers and considered as such, very good grassroot organization.
Priority is given to coca producers who want to convert as substitution is part of Acopagro’s mission.
Very limited fee, easily paid with cocoa sales after 2 to 3 years of plantation.
2. Minutes of committee and assembly meetings, status,
questions raised
All minutes (General Assembly and Board meetings) very well recorded and outstanding formalization
of them (stamped with numbered pages), Coop very opened to share the information. A few minor
non-conformities spoted by FLO inspector regarding the coherence of the minutes.
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3. Rotation of comittee members
New elections to happen in 2008, for the president of the cooperative for example, so there is rotation
of committee members. It is not very clear though how they are prepared and orientated by the
management of the cooperative. Some producers complained (during the visit and by written email
after the visit), of a too much “top-down” approach from the management. No major non-conformities
though. Should be discussed again with management and the producers during the next visit.
C. Relations between the groups or the cooperatives and
the entity responsible for the transformation or
commercialisation
Terms of payment, delivery conditions
Acopagro is a first degree organization ant there is no other organization responsible for production or
export locally. Cocoa is directly exported to Zwizerland by Pronatec for Alter Eco. Acopagro described
Pronatec as a good partner, giving prefinancing (80 000 USD lent in 2007), helping the coop to
develop and buying a large share of its production. As the sales develop, this question should be
studied deeper. The Coop management and producers are willing to establish direct link with us as
well, to diversify their client portofolio and avoid to depend to much on Pronatec. As volumes develop,
especially on the Alto Huayabamba single origin project, this direct link should be set-up.
D. Details on the cost price
Comparison between the price paid to producers, the conventional market price, and other
channels of distribution
Cocoa world market price have known an important increase since January 2007, from 1400 USD /
ton to 2400 USD / ton in February 2008, with peaks at 2800 USD / ton. (highest on New York Stock
exchange). FLO minimum price is at 1650 USD / ton + 100 USD of FLO premium and 200 USD / ton
of organic premium, for a total of 1950 USD / ton. Alter Eco paid an average 2150 USD / ton in 2002 to
2006, slightly above FLO minimum standards. With the increase of world market prices above the FLO
minimum price, Fair Trade price is now just at 100 USD above market price, plus the organic premium
as Acopagro sells organic cocoa to Alter Eco. Hence, the premium is at 300 USD / ton on an average
price of 2200 USD (world market price average 2007/2008 expectations), meaning a 14 % premium
on world market prices. Acopagro sells most of its production as fair trade and organic, cashing in this
differential. Acopagro does its turnover with three buyers only, Pronatec being the main one.
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Competitiveness
Acopagro sells its cocoa following FLO principles, ie, world market prices (when above 1650 USD),
plus organic and FT premium, ie 300 USD above market prices these days (2700 to 3000 USD / ton).
A detailed analysis on the respect by Pronatec of the FLO price rules should be undertaken during the
next visit (when Alter Eco purchases started through Pronatec) to ensure compliance of the Alter Eco
purchases with FLO standards.
Given the high quality of its cocoa and above standards fermentation, drying and quality selection
process, Acopagro can be considered as a very competitive supplier of fair trade and organic cocoa.
Acopagro is already the first organic cocoa producer and exporter of Peru, its success proves its
competitiveness on the high quality, organic and fair trade cocoa world market.
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E. Fair Trade Value Reporting (FTVR)
Here are the FTVR of two of our chocolates, a dark and a milk one. :
Product
Noir Intense
Lait Fondant
Product
Noir Intense
Lait Fondant
Cocoa Cocoa
Sugar
paste
butter
34,60% 61,40%
4,00%
33,00% 11,00%
22,00%
% given to
% given to
producer on
% given to the % given to the
Premium for % in the
producer on
final price,
Producer coop / final
coop / final price, producer
country of
final price FT conventional premium price, FT
conventional
organizations origin
6,64%
6,02%
23,95%
9,56%
8,13%
82,37%
11,28%
5,36%
4,86%
30,08%
7,90%
6,62%
115,61%
9,32%
At the producer level :
Acopagro producers are paid 6,5 Peruvian Soles / kilo of cocoa beans farm gate. Price have regularly
increased, from 3,5 to 5 and lately up to 6,50 / kilo, equivalent to 2000 USD / ton. Local buyers buy at
an average 1800 USD / ton, but now have to comply with Acopagro prices as its drives prices in the
region. With the increasing demand for cocoa, prices tend to continue to go up, even at the producer
level. The large purchasing capacity of Acopagro drives local prices up, shrinking the gap between
Fair Trade and conventional sales to now an average of 10 % differential.
At the Producer organization level :
The premium for producer organizations which reaches an average 100 % on chocolates is mainly
due to the differential of price on sugar. On Cocoa, in FOB price, the differential between organic and
Fair Trade cocoa and conventional cocoa is only of 300 USD / ton on a total price of 2000 to 3000
USD / ton, meaning the premium for the producer organization this year is comprised between 10 and
15 %. Among this differential, 2/3 is linked with the organic certification of Acopagro cocoa, and only
1/3 because of Fair Trade.
Acopagro technician weighting the cocoa of a producer
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IV.
The organization responsible for
production, sales & exports
1. History, Mission Statement of Acopagro
Acopagro was created in 1997, with the objective to increase the quality of life and the economic,
cultural and social level of its members, through the sourcing, processing and transformation of the
cocoa and its export, to increase their revenues and well-being. Acopagro members used to be coca
producers, the objective was substitution. As shown in the following chart, Cocoa is quite performant
to bring equivalent revenues to producers as with coca : with 5,7 hectares of cocoa, producers can get
same revenue as with 1 hectare of coca.
Number of ha required to get the same income in 2004
18
15,7
16
14
12
9,2
10
8
5,7
6
6,4
6,4
3,7
4
2,2
2
1
0
Coca
Cocoa
Arabica
Coffee
Rice
Corn
Banana
Heart of
Palm
Palm Oil
http://www.mesadeconcertacion.org.pe/documentos/regional/Huanuco/r10_00705.pdf
2. Financing of the collective and Fair Trade projects:
As stated in the by-laws of the organization ;
-Technical support of producers by Acopagro agronomists
-Developing and securing distribution channels to increase revenues
-Increase cocoa quality, through transfer of technology : seeds selection, cultivation and harvest
methods…
-Bringing more added value to the supply chain, by being able in the longer run, to produce cocoa
butter, powder, liquor, and chocolate.
-Incentivate the diversification of the producers harvest, through Cane Sugar for example
-Offering micro-credit loans
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-Develop strong cooperative principles and apply them at all levels of the organization
-Provide additional benefits to producers like food supplements, chickens,.., to participate to the
increase of their standards of life.
-Develop good and strong relationship with the other cooperatives and social movements, to
contribute to peace, well being and social justice for small producers.
3. Degree of insertion within the local economy and population,
links with other local and international organizations:
Acopagro is very well integrated in the local economy, as well as at the national level where Acopagro
has tied relationships with other cooperatives like Cepicafé. Acopagro has been funded and then
financed by the United Nations and some NGOs still bring their help like CICDA (Centre International
de Cooperation et Développement Agricole) for technical support, Alterfin for financial help,..
Acopagro seems well integrated in its socio-economic environment and willing to collaborate with
other institutions and NGOs. Students regularly do internships at Acopagro, among them,
agronomists, to do transversal studies (like for carbon compensation or field techniques
improvements).
Santa Rosa group of producers, gathering for discussion
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V.
FTA 200
Auditor :
Criteria :
Profitability: 1
Quality : 2
Price : 3
Logistic : 4
Social : 5
Beneficiaries : 6
Development : 7
Perenniality : 8
Transparency : 9
Environnemental : 10
T.lecomte
8,37
7,50
7,71
7,34
4,62
7,22
7,84
10,00
8,68
10,00
Total FTA 200
158,57
Prof it abilit y: 1
10,00
9,00
Environnement al
8,00
Qualit y : 2
7,00
6,00
5,00
4,00
Transparency : 9
Price : 3
3,00
2,00
1,00
0,00
Perennialit y : 8
Logist ic : 4
Development : 7
Social : 5
Benef iciaries : 6
Analysis of the FTA200 results:
Acopagro shows good performance toward the FTA200 criteria, it is a low risk supply chain with
potential to reach soon a good development level. 158,57 places Acopagro among Alter Eco’s above
the average cooperative regarding the respect of sustainability criteria.
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Acopagro shows good profitability and has audited financial accounts. They are in appendix. Good
increase in sales and in net result and low level of debt (up to 2007, were the coop benefited from
loans from main partners).
On quality issues, Acopagro producers and technicians show good level of training and skills on
cocoa production, harvest . Quality checks are done at the field level, the drying area (fermentation %)
as well as at the warehouse level in Juan Jui. HACCP manual could be written as all quality
procedures to ensure good formalization and compliance of the procedure.
On price, more training of producers on the production costs, price setting and the Fair Trade price
and principles could be undertaken to increase producers’ empowerment on these issues. During the
visit, producers asked how prices were set in the Fair Trade movement which shows their interest in
knowing more and participating more to price setting.
Some logistics criteria are not really applicable as the sales relationship did not start yet, but
information from Pronatec is good regarding this aspect. Some producers like in Alto Huayabamba
area are quite isolated, only accessible by boat and it may bring difficulties in the delivery of cocoa
during rainy seasons. Neverthess, it doesn’t seem like there is high risk of product shortage because
of logistics issues.
Social is the weakest point of Acopagro because of the workers hired by the Acopagro producers in
the field. This issue starts to be recurrent in cooperatives were producers employ workers. A worker
was interviewed in the fields during the visit, producers confirmed what he said.
Daily workers on farms are hired without any contract. Even though very usual in rural areas, this
issue should be clarified as most cocoa producers use daily workers on their farm (for farms above 3
hectares). This becomes almost permanent hiring, whereas FLO definition of a small producers is
"does not employ workers on a permanent basis". One worker interviewed in Santa Rosa declared to
be paid 2 dollars for workdays from 6 AM to 1 PM, or 3 dollars for 6 AM to 6 PM, with breaks and 3
meals, equivalent to 90 dollars / month. This is still far below Peruvian minimum wage of 180 USD
(declared by Acopagro manager). Acopagro workers are paid above 250 USD / month and contracts
are formalized. So the issue is more confined at a producers farms level. This is a general problem
identified in many FLO small producers coops where farms are above 3 to 4 hectares. By having a
clear policy and implement it at the producers level, Acopagro could increase its performance
regarding social criteria and secure this risk.
Beneficiaries are quite in need of help, but living conditions are ok, except regarding nutrition,
education and health. People have access to drinkable water and food from their fields. They own 2 to
5 hectares of land, of which 0,5 to 3 are planted with cocoa trees. They earn an average 3000 to 5000
Euros a year of sales.
Development : As shown in the UNODC (United Nations Organization against Drug and Crime),
report attached, the revenues of the producers have increased steadily and the project can be
considered successful. All producers interviewed declared they were really happy with the project
since they started. They used to be coca growers but now earn as much with cocoa.
There is limited information available on the impact on the livelihoods of the beneficiaries, but
producers showed the house, electricity, tv for some,.., that they managed to buy thanks to
the program. .According to the information available, beneficiary’s livelihoods show an
improvement due to AD interventions.
The success indicator is as well the decrease in drug crop production, all Acopagro producers met
have stoped to grow coca.
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Table 1. Income of Peasant Organizations Supported by UNODC ($US)
Organization
Region
Product
2002
2003
Cooperative
San Martin
Cocoa
443.718
567.004
ACOPAGRO
2004
549.497
Cooperative Valle Rio
Apurimac
Ayacucho,
Cusco
Coffee
268.343
209.053
842.206
Coperative Oro Verde
Agroindustria Santa
Lucia (ASLUSA)
San Martin
San Martin
Coffee
Palm Hearts
93.594
590.152
412.945
677.452
709.976
639.358
Central de
Cooperatives
CECOVASA
Puno
Coffee
4.273.562
2.929.582
8.633.896
Cooperative Naranjillo
Huanuco
Cocoa,
Coffee
2.028.128
2.358.487
2.948.149
Central de
Cooperativas COCLA
Cusco
Cocoa,
Coffee
11.658.209
12.948.265
18.532.846
Oleaginosas
Amazonicas
(OLAMSA)
Ucayali
Palm Oil
1.187.261
1.956.519
2.969.873
TOTAL
20.542.966
22.059.307
35.825.200
Annual Gross Income of Families Benefiting from UNODC projects in Peru :
Baseline:
2001:
2002:
2003:
2004:
1,190
1,323
1,807
2,200
2,564
This shows how the UNODC program has generated revenues for the Acopagro producers as well as
other coops of the area, like Cocla who is as well a partner of Alter Eco.
Acopagro shows especially good performance on perenniality, as the cocoa market shows good
perspectives on the short, medium and long run. The cooperative, even though young (only 10 years
of existence), shows mature organization, very good sales levels and progression and good strategy
of development : increase in the number of producers and of sales and product diversification with
sugar). The structure seems well managed and organized, the only potential issue coming from the
fact the organization depends too much on its manager. This is the highest risk identified regarding
perenniality.
Transparency : Acopagro producers and staff were very open to discussion and questions, they
provided all documents we asked and were willing to collaborate to show the organization as it is.
Great efforts were deployed
to give detailed information on the organization.
Environmental : the impact of Acopagro to the environment is great in terms of reforestation. All
producers are organic certified or in transition. The fermentation and drying process is very
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environmentally friendly as well (no use of power, only the Sun,…). Producers are very much aware of
environmental issues and care about the environment. None of them use chemicals.
SWOT
Strengths:
Very good dynamics, strong growth and capacity to grow larger, on a market with high prices and
good opportunities.
Weaknesses:
Still a quite top/down approach, producers should be empowered and involve themselves more in the management
and the financial accounts of the organization.
Threats:
Acopagro may find it difficult to operate without M. Gonzalo Rios, if he decides to resign. “Too strong
leadership” from him.
Opportunities:
New products like cane sugar and main opportunity on Carbon offset.
The FLO premium amount and use, as well as the organization structure are posted on the
wall of the place where producers meet
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- Non-compliance reports
Non-conformity Report
SUMMARY :
Major
Economic
3
Social
7
Environmental
A)
Major Non
conformities :
Economic
corrective actions :
Criteria
Grading
Minor
9
10
0
Grade Audit
Points Comment
39. Formalisation and
application of quality
control procedures:
HACCP / physio-chemical
Progress criteria for level 1, required criteria for level 2. Gradual
tests / micro-biological
score. Set up and respect of the quality control procedures to
tests / residues (for bio
conform to European standards. Annual tests…
products) / conformity with
EC regulations (toys) /
Food content (packaging /
table art)
2
0
10. State of accounting
and analytic management
systems
The existence of a management control system is a sign that a
production facility has enhanced ability to control its
development. This entails cost accounting, cost control and
financial optimization. No management control, unable to
complete the FTVR even when assisted, unaware of the
implications of the FTVR: 0 / aware of the implications of FTVR
but unable to fill out the report: 0,25 / difficulty filling out the
FTVR, lack of transparency and management for cetain
positions: 0,5 / FTVR filled out but not justified for all the
positions: 0,75 / mastery of management control, FTVR filled out
and justified for all positions: 1. Required criteria for level 2
2
0,25
59. Capacity to train new
employees
2
No. Could be done, especially for
0 fermentation and drying process
No only general accountig, but
not really relevant as operations
are quite simple, as well as
0,5 product and circuit.
Only applies to level 1. Capacity to train more than 70% of
personnel additionnal producers over a period of one year: 1 /
>50%: 0,75 / >30%: 0,5 / >10%: 0,25 / <10%: 0
0
0 Yes
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Social
Criteria
65. Respect of social
laws regarding
working hours based
on ILO
recommendations or
local legislation (N#
hours per day, rest,
overtime)
Explanation / Grading
Grade Audit
Points Comment
0
Daily workers on farms hired without any
contract. Even though very usual in rural
areas, this issue should be clarified as
most cocoa producers use daily workers
on their farm (for farms above 3 hectares).
This becomes almost permanent whereas
FLO definition of a small producers is
"does not employ workers on a permanent
basis". One worker interviewed in Santa
Rosa declared to be paid 2 dollars for
workdays from 6 AM to 1 PM, and 3 dollars
for 6 AM to 6 PM, with breaks and 3 meals.
This is still far below Peruvian minimum
wage of 180 USD (declared by Acopagro
manager). Acopagro workers are paid
above 250 USD / month and contracts are
formalized. So the issue is more confined
at a producers farms level. This is a
general problem identified in many FLO
small producers coops where farms are
0 above 3 to 4 hectares.
0
180 USD / month of minimum salary, in
Acopagro employees are paid 250 USD.
Not ok on producers farms. To be
discussed with Acopagro's board and
0 management.
Are BIT standards or local regulations (if more stringent)
applied?
2
75. Salary equal or
higher than local
minimums for
employees and
For the level 1&2 employees. Yes=1, No=0. Be particularly
attentive to the employees level of salary and also the member
producers (income
payed for an action.
study of the
producers per work
day in comparaison to
the legal minimum)
2
71. Is there a
prevention plan
against fire? And fire
exits installations and
materials
Are BIT standards or local regulations (if more stringent)
applied?
2
66. What productionrelated safety
regulations are in
place? Posting,
2 formalized?
0,25
They are doing it, under review. Very
0,5 limited
0,25
They are doing it, under review. Very
0,5 limited.
0,25
They are doing it, under review. Even
0,5 though very limited.
0,25
Not by all buyers, to be checked at our
0,5 level.
0,25
To be checked at our level : can we go
0,5 direct..
Knowledge and implementation of regulations, including posting
of rules in public areas, availability of equipment and training.
(employees, level 1&2)
68. Are there hygiene
regulations at the
production
Knowledge and implementation of regulations, including posting
facility? Posting,
of rules in public areas, availability of equipment and training.
formalized? Training
of the members and
the employees.
2
95. Are orders prefinanced (for cooperatives or
producer
associations)
50% pre-financing , Yes: 1, No : 0 (unless the producer can prefinance as stated at left : 1)
2
98. The most direct
relationship possible
with producers
(commercial
cooperatives and
marketing
associations )
2
Accept only intermediaries bringing real social, technical and
environmental added value. Best channel = 1; channel in
obtimisation = 0,5; no obtimised =0.
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Minor Non
conformities :
B)
Economic
Criteria
Grading
Grade Audit
Points Comment
Only applies to level 1. For levels of endebtment (short, medium, or
22. Organisation level of debt long term) nill or less than 10% of the capital: 1 / 11 to 20%: 0,75 / 21
to 30%: 0,5 / 31 to 41%: 0,25 / more than 40%: 0
1
0
Only applies to level 1. Less than 3 clients and a single distribution
57. Diversification of product circuit: 0 / more than 3 clients but single circuit: 0,25 / more than 3
outlets: local and/or
clients in at least 2 circuits (ie. Local / export / speciality): 0,5 / more
international (please list)
than 5 clients in at least 3 circuits: 0,75 / more than 10 clients in at
1
least 3 circuits: 1
58. Diversification of trades
Only applies to level 1. Development of new activity, new products,
(new products, new services
new services… Yes: 1 / no: 0
1 for the producers)
1
52. Innovation and originality Only applies to level 1. Development, at the local level, of exclusive
of products developped
and original products. Yes: 1 / no: 0
48. Product variety and
vitality of the offer
1
1
47. Design and "marketing"
quality of the packaging:
respect of the colour code,
quality of the pack..
50. Repeat production of
products: product
1 developpment
1. Accessibility: condition of
roads, delays / seasonal
1
Only applies to level 1. Number of product categories. 1 category:
0 / 2 (of which the smallest should represent at least 25% of the
turnover): 0,25 / 3 (of which the two smallest should represent at least
35% of the turnover): 0,5 / 4 (diversification, with the three smallest
categories representing at least 45% of the turnover): 0,75 / more
than 4 categories (with the four smallest categories representing at
least 55% of the turnover): 1
0,25
0
0,25
Nearly 1 million USD lent by partners (Alterfin,
Pronatec,…) in 2007, for an equity of 200 000
USD (by end of 2006), so quite a high level of
debt but contracted mainly through partners
and specialized organizations (Fair Trade
related). This shows at the same time great
trust in Acopagro by its partners. Quite normal
as well since the coop is recent and has
known rapid growth. Reinforcement of shared
capital should be pursued though. It could be
with the entrance of new members and the
0 consolidation of existing sales and profits.
0,25 3 clients, one circuit, plan for diversification.
0 Is goind to diversify with Cane Sugar
No. But on their way to market cane sugar and
0,25 dried and milled coconut.
0
0 No, but cane sugar in project.
0
0 No
0
0 No
Qualitative appreciation, precedence. Excellent: 1 / very good: 0,75 /
good: 0,5 / poor: 0,25 / very poor: 0. N/A: 1
Only applies to level 1. Regular renewal of the product range, of
product development, regular innovations. Yes: 1 / no: 0
Production facilities are often located in remote areas (topography,
climate, poor equipment, conflicts). It is important to consider the risk
of logistical difficulties and delays. 0 : high risk over an extended
period of time (+ 1month) / 0,25 high risk for < 1month or low fisk for >
1month / 0,5:medium risk for < 1month / 0,75: low risk / 1: no risk
Only applies to level 1, unless level 2 interferes (score = 0 in this
case). In the event of large scale orders, reactivity and management
34. Capacity to increase rate
of the production (delays, costs, quality) (track record and evaluation).
and capacity of production
Capacity to double deliveries: 1 / +75%: 0,75 / +50%: 0,5 / +25%: 0,25
1
/ not possible: 0
0,25
0
Excess rain does not allow drying and access.
50 % of Acopagro producers are in very
0,25 remoted areas with just river access.
70 % capacity of increase, from 900 tons to
0 1500 tons.
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Social
Criteria
Grading
67. Are all work areas
clearly designated and
verified for safety?
(level 1&2)
Grade Audit
Points Comment
Inspection procedures, at regular intervals and in conformity to local
regulations
1
69. Are all work areas
1 clearly designated and
60. Legal status of
organization members
1 (level 1&2)
Inspection procedures, at regular intervals and in conformity to local
regulations
1
1
1
1
85. Pension
contributions for level
Yes : 1, No :0
1&2 producers /
employees
70. Are regulations
adhered to by
employees? Are theze
Qualitative assessment of members' or employees' practices.
trained to the social,
hygiene, security and
fire prevention.
100. Are sub-contractor
Awareness and regular inspection of sub-contractor conditions. 1/ for
social, hygiene and
more than 75% of the purchasing: 0,75/ for more than 50%: 0,5/ for
safety conditions
more than 25%;:0,25/ less than 25%: 0
verified?
106. Does level 1
assistance meet the
Qualitative appreciation for the level and the type gived to the trait
unfairly people.
needs of the most
underpriviledged?
118. If yes, what type of
project, and what
Coopératives, producers associationsor companies hold at 100% by
proportion of funds
the producers = 1. Plantations: + 50% of net profit before taxes =
1,49% to 40% = 0,75, 39% to 30% = 0,5; 29% to 20% = 0,25, less
available to level 1 is
than 20% = 0.
allocated to this
project?
89. % of the additing
valor maked by the
level 1 (in % with the
product final price)
(source FTVR)
0,25 No hygiene rules
0,25
Yes for Acopagro workers and producers but
not on farms for the workers of the producers.
0,25 Very hard to enforce anyway...
0,25
50 % of Acopagro's employees have social
security. On a voluntary basis employees can
choose. No social security at all for producers
and workers on farms. There is a project to
provide producer communities with small first
aid centers. Could be a good help for workers
on farms too. To be discussed with the board
0,25 and management.
0,25
100 % in Acopagro. Not for workers in the field
but almost impossible to enforce..Could be
dealt through a "package" for workers on the
0,25 fields.
0,25
0,25 No
0
0 No
Yes : 1, No :0
1
1
0,25
Employees with contracts, statutory members Yes : 1, No : 0
84. Access to social
security for level 1&2
producers/employees
(public / via
contributions)
1
0,25
No, but not really applicable as work areas are
mainly the fermentation and drying areas in
the open air. Still, main hazards should be
noted on boards and the access restricted to
producers and eventual workers. Applies as
well to the cooperative warehouse. No safety
0,25 rules written.
0,25
0
Level 1 income = at least 30% of the final product price = 1; from 25
to 29% = 0,75; from 20 to 24% = 0,5; from 15 to 19% =0,25 and less
than 15% = 0
0,25
0,25 Yes for producers. Workers out of the scope
Acopagro recevives grants for producers who
0 still produce coca.
0,2 Euro of cocoa paid to the cooperative /
chocolate bar of 100 g of pure cocoa. Sold at
1,8 Euros. The manufacturing of cocoa butter
and eventually of chocolate by Acopagro could
0,25 improve the ratio.
Environmental
Criteria
Grading
Grade Audit
Points Comment
ALTER ECO / FTA200 Non-compliance and corrective actions report
29
Confidential
VI. Conclusions regarding the respect of the Fair Trade
Criteria
Economic considerations
Use of the Premium: Quite clear and managed in a separate account. The use of the premium is
detailed, poste on walls and explained as well in the villages with pictures of the investments made.
Export Capacities: Yes, very good, large volumes.
Building up the organisation: Yes seems well organized.
Social considerations
Potential for development: Great, already showed good results and has potential to more than
double the number of beneficiaries and to double the cultivated area per producer.
Beneficiaries (underpriviledged producers): Yes, all small producers. Still, they are not the most
underpriviledged, their workers are. This issue should be discussed during next visit.
Schooling: In Alto Huayabamaba, going to school may be hard (20 minutes walk from Santa Rosa,
but some producers are further away along the river) because of the isolation of the area and the
access only by boat. The good point about schooling is that many of the producers interviewed
succeeded to send their children to university thanks to the cocoa revenues. This shows a great
progress in the standard of living of producers and their family. Some, like Francisco (see AEDI
attached) even has a second house in Juan Jui where is wife and children live, to facilitate schooling.
Labor conditions:Key issue for the workers of the producers in the fields. Should be discussed during
next visit.
Child labor : not spoted as an issue, children go to school and even up to University. Very good
dynamics at the coop level.
Freedom of association : not really applicable at the coop level, very small structure, but unions
would be allowed.
Working conditions : good except for workers in the fields.
Health and Safety measures : to be formalized, producers should be formally trained and rules
posted on walls.
VII. Conclusion
Great organization with great potential for growth on cocoa and product diversification, like cane sugar
and carbon offset credits. The substitution of coca by cocoa trees is a performant model. Perspectives
on the cocoa market are quite good especially for Acopagro who produces high quality and organic
cocoa. The grassroot societies seem well organized and willing to invest even more in the
development of their fields. They are willing to participate to reforestation and at the same time value
their land and increase their cocoa production. When Acopagro settles the issue of the labor
conditions of the workers in the fields, it should reach a grade of 175 or more, placing the organization
among the most dynamic of Alter Eco partners.
The top-down management issue, revealed both at the society level as well as after the audit (a
producer sent an email denouncing the too strong hold of the management on the organization and
the lack of participatory decisions), is as well a topic for progress. It is a usual case in cooperatives
created by strong leaders, nevertheless, it is a key issue as well for the sustainability of the
organization and its compliance with FT criteria.
30
Confidential
Alter Eco will start its purchases by February 2008, and expects to buy an average 300 tons per year,
equivalent to 20 % of Acopagro’s 2008 expected production (1500 Tons). Cocoa will be purchased as
a “single origin” only from Alto Huayabamba area for Alter Eco, focusing on the most remote
producers as well as benefiting from great cocoa quality.
The development of new cocoa fields (up to 10 000 more hectares) opens the opportunity to certify
plantations to sell the carbon credits associated. The assessment of the quantity of carbon that cocoa
fields can absorb has been done, allowing rapid implementation and potential certification of the
program. This could bring additional revenues to producers and participate to the reforestation of the
region. Alter Eco is to participate to this carbon offsetting program for its Acopagro chocolates, if
program starts, launching the first carbon neutral chocolates of the market.
Feedback from the cooperative regarding the audit, expectations of the latter (to be filled in by
M Gonzalo Rios) :
31
Confidential
- ANNEXES
List of annexes to be included (when applicable):
“Document request list Organization”
Acopagro By-laws
Minutes of General Assemblies and Board meetings
2006 Sales report
Internal Control system
FLO certificate
FLO audit report
EEC and NOP Organic certificates
2004, 2005 and 2006 financial accounts
Quality procedures.
Reports and analysis on Carbon offset capacity of cocoa fields
Complimentary analysis : substitution programs in the area, different agro-forestry models of the
area,…
32

rapport d`audit : guildelines

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