A Swiss co-founded initiative aimed at revolutionising cocoa production in Peru is empowering farmers and turning them into entrepreneurs.
“Let’s bring down the stock market!” one person shouted after the three dozen cocoa producers, assembled in the jungle community of Santa Rosa, voted to receive 50-90% more than the price normally paid by cocoa traders in the region.
The men and women at the meeting, who also came from neighbouring Pucallpillo, are shareholders in Peru’s first producer-owned chocolate company, Choba Choba.
The discussions at the general assembly - set amid cacao trees, stilted homes and free-range chickens - were unprecedented in the industry.
“Normally what is done in the chocolate business is the cacao farmer produces cocoa and it is sold to the big players who make the big margins when they sell the chocolate,” explained Christoph Inauen, one of Choba Choba’s co-founders. The Swiss is a former cocoa buyer for a large Swiss retailer. He launched the project last year together with Eric Garnier from France.
“Cocoa farmers not only produce cocoa and sell it to their own company, but they are also the owners of the chocolate brand and sell their chocolate. So cocoa farmers are considered entrepreneurs of a chocolate company. They receive margins. It also allows consumers to buy directly from the cocoa farmer and directly create an impact with the farmers.”
The cocoa producers here on the Huayabamba River, a three-hour boat ride from the nearest road, had previously worked in Peru’s largest cocoa cooperative, Acopagro, before joining Inauen and Garnier to create Choba Choba.
They were thrown out of Acopagro when they protested against the cooperative’s decision-making processes as well as what they said was a lack of transparency.
Jorge Yoplac ("Yoplac") Tuanama, like all of the cocoa farmers in the region, used to produce coca that supplied the Medellin drug cartel under Pablo Escobar.
Following crop eradication that affected everything - including vegetables planted for subsistence - and a programme backed by the United States to help farmers shift to cocoa, Yoplac, together with others, joined Acopagro to grow CCN-51, a disease-resistant hybrid variety developed in Ecuador.
However when the cocoa producer pitched a finer sort to the cooperative, which he had developed using a “native” variety, he was met with rejection.
“They didn’t accept my work, they didn’t accept changes. Cocoa can change. I felt that our economies could benefit from supplying markets with a finer variety,” Yoplac commented.
Lack of transparency
Oswaldo del Castillo, the first and current president of the Cocoa Association of Choba Choba and a former director of the cooperative, added that an internal investigation showed that Acopagro’s management was not transparent, nor were profits distributed properly.
While Acopagro rejected the charges of poor governance, telling swissinfo.ch that the cooperative is subject to external, independent audits, there are calls for improvements.
The president of the Peruvian Coffee and Cocoa Chamber, Luis Navarro, said there were “people who take advantage of circumstances and voids to create ‘briefcase’ (maletin) cooperatives”.
“If there is no self-regulation at the cooperative, anyone who uses the name cooperative may act in ways that do not correspond to the label,” Navarro added.
Garnier claims governance problems are common at cooperatives. However, the experience gained from working within their democratic structures has helped Choba Choba’s members.
Certification and labels
In recent years, the global chocolate industry, currently estimated at $100 billion (CHF98 billion), has repositioned itself to enhance its image through corporate social responsibility, with major processors and chocolate producers - often sourcing from cooperatives - scrambling to certify their products under various labels or through self-certification.
Choba Choba was set up to counter that. “We don’t do labels,” Inauen says.
“Sustainable is the most overused word on the planet,” he adds, explaining that Choba Choba is a new kind of transparent business model. The consumer, he says, “can verify and even certify as he likes. It may not be 100% sustainable but it creates an impact”.
Farming here is organic and producers have replanted native trees for shade and to replace vast expanses of land deforested in past decades for coca.
Yoplac scoops up two handfuls of his CYP – or Cacao Yoplac Pucallpillo. It’s distinct in colour and has a fine aromatic smell.
Most of his neighbours – other Choba Choba associates - now plant his variety, which is being featured in Yoplac’s own Choba Choba selection, similar to other assortments named after the actual producers in the group.
Criticism of mass consumption
At CHF30 ($30.70) per three-bar box, Choba Choba’s price is well above that of certified chocolate.
But Inauen says Choba Choba’s goal isn’t to put their chocolate on retailers’ shelves. The bars can only be ordered online from the company. “Our product is a criticism of mass consumption of chocolate,” he charges, saying that cocoa must reflect the living costs of workers.
Oswaldo del Castillo claims large companies often create small associations in order to source "fair trade" products. He says this is done at the expense of producers. “No one sees and investigates what is really happening.”
He says this is the first time producers like him have had the chance to take control over their own destiny by becoming shareholders.
Choba Choba means “you help me, I help you” in Quechua, and came into usage when company members began working together following coca eradication.
From its launch in October 2015 until March 1, 2016, the company registered sales of CHF120,000 and is aiming to reach CHF650,000 by year-end. Choba Choba’s cocoa is processed by Felchin, a high-end chocolate producer in canton Schwyz in Switzerland. For each box sold, 4% of the price goes partly to a fund paying shareholders a small bonus at the end of the year. The rest goes towards increasing producers’ shares in the company.
Choba Choba farmers have been working with NGOs such as Pur Project to replant areas affected by deforestation.