PRODUITS DES ILES SA, “PISA”
Most Recent Visit: April, 2016
Number of Farmers: 1,489
Number of Female Farmers: 476
Numbers of Hectares Certified Organic: 974
Annual volume purchased: 37.8 metric tons
Price model*: World market price + $600 per metric ton (3x the Fairtrade premium)
Price paid by Taza**: $3820 per metric ton
Price paid to Farmers***: $1944 per metric ton
Percent paid to Farmers: 50.9%
Additional Benefits to Farmers: Centralized cacao fermentation and drying; Price stability; Agronomic assistance; Cacao sector support
The Upside: Transforming Haiti’s cacao industry
The Challenge: Transforming Haiti’s cacao industry
Haiti’s cacao industry has traditionally sold the majority of its harvest into low-paying commodity markets. Produits Des Iles SA (PISA) is pioneering a more sustainable model. By investing in first-class fermentation and drying, the company seeks to build direct relationships with chocolate makers who pay high prices for quality cacao. Realizing this vision, however, is neither easy nor inexpensive. As a start-up company operating in an immensely challenging environment, PISA illustrates the crucial role of context in understanding price.
This past year, PISA paid its network of farmers an average of $1944 per metric ton. This is about $170 less than the average price paid to cacao farmers globally, and though it may seem as though PISA was making large profits, nothing could be further from the truth. Processing and exporting cacao is not easy anywhere, but it is undeniable that PISA faces a more daunting - and costly - set of challenges than most.
First, small farms and old trees mean Haitian cacao farmers produce very little. PISA must collect beans from nearly 1500 producers in order to export 100 metric tons of cacao per year. Across the border in the Dominican Republic, ÖKO Caribe works with only 180 highly productive farmers and exports 10 times as much. Logistical challenges also include certifying the supply chain as organic, an effort that requires 15 field officers who must register, visit and train producers in organic production. The cost of doing business grows further due to limited infrastructure including poor roads and unreliable ports drubbed by natural disasters. Finally, a lack of industry collaboration and government support fails to generate public goods such as agronomic extension services.
And still, PISA has already had a major impact on the cacao market and farmers’ incomes. Prior to PISA, the regional market was dominated by a 200-year old company that paid farmers just above $500 per metric ton. Since launching two years ago, PISA’s presence has increased competition and pushed bean prices up 300 percent. Furthermore, by driving to producers’ farms to pick up the cacao in unfermented form, the company has reduced farmers’ labor; they no longer need to process the cacao themselves before transporting it by donkey, bus or friend’s truck to an intermediary who promises one price and pays another.
While not immediately apparent, PISA’s effort to transform the chocolate world’s perception of Haitian cacao may end up having the greatest impact of all. Since Taza began working with the company, PISA’s exceptional beans have made their way to over a dozen additional craft chocolate makers in the US, Europe and Japan, winning awards along the way. We hope that this recognition will drive further price increases for PISA and its farmer network, and that a healthy cacao sector translates into a more verdant, resilient and prosperous Haiti.
Watch the sourcing journey unfold. View a video about Taza and PISA's partnership here.
*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.