Cargill aims to pay cocoa farmers more than US$2.2M in premiums for certified bean sales next year; company seeks to raise certified cocoa purchases to 100,000 tonnes by 2015, from 20,000 tonnes this year

LOS ANGELES , September 21, 2011 () – Cargill Inc. is looking to pay cocoa farmers more than US$2.2 million in premiums for sustainable bean sales next year, Bloomberg reported Sept. 21.

Sustainability is focused on meeting current needs without jeopardizing the needs of future generations, according to the United Nations. Global demand for cocoa has outpaced production in 10 of the past 15 years, according to the International Cocoa Organization.

The world could face long-term deficits of cocoa at present prices if the company doesn’t change, and that means focusing on changing the productivity of farmers, Taco Terheijden, manager of sustainable cocoa at Cargill Cocoa & Chocolate, said in an interview Sept. 21.

Chocolate makers and traders are fueling demand for sustainable cocoa as many have increased their purchase commitments for certified beans. The Netherlands wants all of the cocoa purchased in the country to be sustainable by 2025, the country’s Ministry of Economic Affairs, Agriculture, and Innovation said.

Cargill’s sustainable cocoa program has driven a 30% yield increase in projects being conducted in Ivory Coast in two years, Terheijden said.

Agricultural practices on the ground need to increase farmers’ revenue, otherwise they will change crops, so high productivity is needed for higher revenues, Terheijden added.

Cargill paid US$2.2 million in premiums this year to 26,500 growers in 21 cooperatives in Ivory Coast, the company said in an Aug. 22 statement. The company paid the premiums for 20,000 tonnes of certified cocoa for delivery between October 2010 and May, which represents around 10% of the company’s total cocoa sourcing in the country, according to the statement.

The company is seeking to raise the purchase amount of sustainable and certified cocoa to 100,000 tonnes by 2015, according to Terheijden.

More than 50% of the payments made by Cargill this year will go to growers and the rest will be used by cooperatives to invest in community projects, the company said.

Sales of cocoa from the UTZ sustainability program reached 26,620 tonnes in the January to August period. UTZ-certified sales could hit 125,000 tonnes by 2013, according to UTZ certification manager Britta Wyss Bisang.

The cocoa industry could be threatened if cocoa production is not sustainable as there won’t be enough, and yields in Ivory Coast are very low, according to Bisang.

The primary source of this article is Bloomberg, New York, New York, on Sept. 21, 2011.

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