Most Recent Visit: May 2016
Country: Dominican Republic
Number of Farmers: 1
Number of Female Farmers: 0
Numbers of Hectares Certified Organic: 150
Annual volume purchased: 50.2 metric tons
Price model*: World market price + $550 per metric ton (more than 2x the Fairtrade premium)
Price paid by Taza**: $3511 per metric ton
Price paid to Farmers***: $3511 per metric ton
Percent paid to Farmers: n/a
The Upside: An integrated cacao operation
The Challenge: Managing production risks
In the eastern Dominican Republic, Ramon Lopez and his young deputies, Isidro Castillo and Esterlin Pion, expertly manage Finca Elvesia’s 150 hectares (about 370 acres) of farmland. A diversity of cacao trees bear red, orange and yellow pods, and upon harvesting, the fruit-covered beans are brought directly to the farm’s centralized fermentation boxes and drying decks.
By performing both the production and the processing of cacao, Ramon and his team combine two steps in the supply chain. Whereas Alto Beni Cacao or ÖKO Caribe collects cacao from a network of smallholder farmers, buying beans at a percentage of the price negotiated with Taza, Finca Elvesia produces its own cacao. This means that the farm keeps the entire amount paid by Taza - $3511 per metric ton. However, it also means that the team must manage all the risk and all the costs of cacao production and harvesting.
One of the greatest costs of managing one’s own farm is paying for labor. In the face of extreme poverty, some cacao farms - most located in West Africa - have been found employing child labor and even slavery in an attempt to make ends meet. Taza has zero tolerance for these types of labor abuses. For this reason, we appreciate the lengths to which Finca Elvesia goes to provide fair employment to its farm workers, the majority of them young men originally from Haiti.
Employees are paid between 8K and 15K pesos per month, which is equivalent to $173-$325. While insufficient to live on in the US, the lowest end of this scale is still about 25% greater than the country’s minimum wage for farm workers. In addition, the farm provides free food and housing to interested employees, many of whom live in Haiti and travel to Finca Elvesia each year for the harvest. For those who wish to settle in the Dominican Republic full time, the farm partners with a local church that guides them through the naturalization process. Finca Elvesia is Taza’s oldest partner, and given the quality of its character and its cacao, we anticipate many more years working together.
*For Taza's purposes, a cacao price is fixed when the dollar amount is agreed upon and will not be affected by daily fluctuations in the world market price. In turn, it allows the partner to guarantee a fixed price to farmers at the start of the harvest season. Alternatively, Taza and a partner may negotiate a premium above the fluctuating world market price. This is a more common model in the industry and one used by Fair Trade, among others. The complexity and pros and cons of each model are outside the scope of this report.
**Price Paid by Taza is equal to the negotiated fixed price or to the negotiated premium plus the world market price on the day the contract is closed.
***Price Paid to Farmers is calculated as the average price paid by the partner to farmers between July 1, 2015 and June 30, 2016.