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Under corporate control; economy of hunger; other stories

(Saturday, Feb. 19, 2005 -- CropChoice news) --

1. A few corporations control most of Americans' food choices
2. The economy of hunger
3. Agriculture Commodity Prices Continue Long-Term Decline
4. Corporate friendly Bush budget
5. Farm Coalition Endorses Payment Limitation Reform Legislation
6. Anti-GMO ballot measures miss the mark
7. Agriculture Export Dumping booms During WTO's First Decade
8. Fair trade sweetens pot

1. A few corporations control most of Americans' food choices

By Mary Hendrickson, Ph.D. Food and Society Policy Fellow, University of Missouri at Columbia

Monsanto's acquisition of Seminis raises important issues about the potential uses of biotechnology in the vegetable seed market. It also raises a fundamental question about the small number of companies dominating the seed industry and shaping the foundation of our food system.

Today, Monsanto and DuPont control 60 percent of the U.S. corn and soybean seed market. They join three other companies, Syngenta, Dow and Bayer, as the world's leading suppliers of seed and chemicals for commercial crops worldwide.

Monsanto's leading technology in genetically engineering Round-up Ready soybeans has affected American farmers significantly. Nearly 85 percent of America's soybean crop is planted with Round-up Ready technology, touted both as increasing farmers' profits while reducing herbicide use.

In reality, Round-up Ready beans have reduced farmer decision-making, while allowing farmers to manage larger farms with integrated seed and chemical packages. Increased productivity and more expansive operations have not improved farmers' bottom line.

Researchers at Iowa State University, as well as independent consultants such as Charles Benbrook, have shown that Round-up Ready beans are no more profitable for farmers than conventional soybeans because of increased seed costs. Privatizing the breeding of crops through genetic engineering means farmers buy seeds they traditionally would have produced on their own farms. Farm level impacts translate into community impacts. Farms are bigger, fewer people farm and fewer businesses serve those farms - significantly reshaping agricultural-dependent communities across Missouri and Illinois.

But it's not just farmers and rural people who are affected by changes in the seed industry. Every American who eats can see the transformation of the food system in local grocery stores. Less choice at the farm level ultimately reduces choice in the supermarket aisle. Reducing competition in the seed market will reduce the choices farmers have for planting and reduce the availability of seeds adapted for local markets. With fewer companies competing to develop and refine seeds for commercial vegetable and grain crops, is it possible that genetic diversity could be dangerously reduced?

Consolidation in the food and agricultural industry is nothing new, and the seed business seems to be following the pattern.

As farmers and consumers, we have stopped making decisions about what kind of food we will produce and eat in this country. Corporate producers make that decision for us. We let global food firms decide where our food comes from, how much it will cost and how it will taste.

When shaped by these corporate forces, our food decisions no longer rest primarily on taste, quality, nutrition, security and culture. These decisions are made based on how cheaply food can be produced and sold for the most profit. Even without applying biotechnological inventions such as Round-up Ready soybeans, cotton and canola, or Bt-resistant corn to the vegetable seed market, consolidation and lack of competition have left many farmers with higher seed and input costs.

While Monsanto might offer new opportunities for vegetable farmers, it is just as likely these farmers will find restructuring in their seed industry means they face the same fate as American soybean and cotton farmers - bigger farms, fewer farms and intense international competition.

This acquisition may make financial sense on Wall Street, but consumers should ask if it is sensible to give control over the genetic material of our food to corporations that must focus solely on the bottom line.

2. The economy of hunger

By Richard Manning
Prairie Writers Circle

One of the many ironies of our time is that no news is strictly local. Corporate culture's homogenization leaves me free to tell a quirky little story about my town and be fairly certain it is relevant in yours, even if yours is Palencia, Guatemala.

The poor, and therefore the hungry, have always been with us, so it would seem there is no news in this matter. Nonetheless, a group of well-meaning folks assembled itself recently in my town, Missoula, Mont., with the straightforward mission of eradicating hunger here.

One would think it to be an easy enough task. Missoula has a lively economy, affluence and a deep-seated progressive streak immune to the smear of red that has so stained the rest of the region. So in true progressive tradition, we saw this as simply a matter of rolling up our sleeves and getting on with it.

After all, most of us have seen the hungry, the shuffling homeless under the interstate bridges. There didn't seem to be all that many of them, and they didn't look as if they would eat all that much.

But the people who had been doing the actual work of collecting and distributing food to the poor for years in this town were quick to inform us that stereotypes are simply wrong.

It has become increasingly difficult to work at small-town food banks because often one knows the client not as a beggar from beneath the bridge, but as a neighbor or colleague. Food banks today cater increasingly -- and a sociologist's survey of our town bore this out -- to people who are employed, the class we now call the working poor.

These people earn so little they barely get by. Catastrophic medical bills or Missoula's escalating housing costs can chew up their inadequate paychecks so that by the end of the month there is no money left for food.

If we are to really do anything about the shameful matter of hunger in our town, we must address these larger issues. What at first looked like a little hole to plug now appears to be a bottomless chasm, ever widening.

There is something fundamental buried in all of this: where these people work. Many of them, report the food bank people, work full time for minimum wage and no health insurance at the ring of chain stores that has suburbanized this once unique mountain town. The big-box retail business has exploded in Missoula, making us a regional market center, part of the cause of our prosperity. That is, hunger is increasing in our town not in spite of our healthy economy, but because of it.

Hunger in America is no longer a matter of falling through the cracks, of happenstance and misfortune. Hunger has been institutionalized as a part of the economic fabric, including especially the business of selling food.

There is a mirror image that extends this story to the developing world. The New York Times recently reported, "Across Latin America, supermarket chains partly or wholly owned by global corporate goliaths like Ahold, Wal-Mart and Carrefour have revolutionized food distribution in the short span of a decade and have now begun to transform food growing too."

Simply, small subsistence farmers are unable to sell to the chain stores because they cannot meet the stores' conditions. At the same time the big companies are murdering the local markets that used to sell the farmers' products.

"The stark danger is that increasing numbers of them will go bust and join streams of desperate migrants to America and the urban slums of their own countries," the Times reported.

Look for some of them, coming soon to a food bank near you.


Richard Manning is the author of several books, most recently "Against the Grain: How Agriculture Has Hijacked Civilization." He wrote this essay for the Land Institute's Prairie Writers Circle, Salina, Kan.

3. Agriculture Commodity Prices Continue Long-Term Decline: Trend Has Negative and Positive Impacts on Food Security in Poorest Developing Countries

Source: Food and Agriculture Organization of The United Nations, Tuesday February 15

WASHINGTON and ROME and GENEVA, Feb. 15 /PRNewswire/ -- The long-term downward trend in agricultural commodity prices threatens the food security of hundreds of millions of people in some of the world's poorest developing countries where the sale of commodities is often the only source of cash, says a new report released today by the UN Food and Agriculture Organization (FAO).

According to The State of Agricultural Commodity Markets 2004 (SOCO 2004), many farmers and exporting countries still find themselves trapped by their dependency -- producing and exporting more, but earning less than they did in the past.

SOCO 2004 also says that lower prices for basic foods enable many poor food importing countries and their consumers, especially in urban areas, to meet their food needs at lower cost and to gain access to nutritious diets.

Declines in agricultural commodity prices slow

While the overall trend in commodity prices has been downward from the late 1990s through 2001, the report shows that prices on world markets have rebounded, or at least levelled off, over the past two years. However, not all commodities have performed the same. There have been rebounds in cereals, oil crops, dairy products, fibres and raw materials, while horticultural product prices remained more sensitive to market balance and meat prices were disrupted by animal disease outbreaks.

Price recovery has been far more fragile for tropical beverages, sugar and bananas, according to the report, which points out that these are some of the very commodities on which the poorest countries are most dependent for their export earnings.

Some developing countries manage to diversify

Commenting on SOCO 2004, Hartwig de Haen, FAO Assistant Director-General, Economic and Social Department, said: "The long-term downward trend in commodity prices along with increased productivity and production of major agricultural export commodities have divided developing countries into two distinct groups. On the one hand, we have the developing countries that have managed to become less dependent on one or two agricultural commodities, some shifting production into high value export crops.

"On the other hand," Mr. de Haen added, "the Least Developed Countries, or LDCs, where usually small producers account for the bulk of agricultural production and exports, have been unable to mobilize the investment and training required to shift to new crops. They also have difficulties meeting the high quality standards and strict delivery deadlines of the major supermarket chains in the developed countries."

The dangers of depending on a few agricultural commodities

Many developing countries rely on exports of a small number of agricultural commodities, even a single commodity, for a large share of their export revenues. This concentration leaves them exposed to unfavourable market or climatic conditions. A drought or a drop in prices on the international markets can quickly drain their foreign exchange reserves, stifle their ability to pay for essential imports and plunge them into debt, the report warns.

As many as 43 developing countries depend on a single commodity for more than 20 percent of their total revenues from merchandise exports. Most of these countries are in sub-Saharan Africa or Latin America and the Caribbean and depend on exports of sugar, coffee, cotton and bananas. Most suffer from widespread poverty.

Commodity dependence made worse by market distortions

Because many of these countries depend on agricultural commodity exports to finance food imports, a decline in the prices of exports relative to the prices of imports can threaten food security. However, the report acknowledges that the same downward pressure on commodity prices may also reduce the food import bills of developing countries.

The report warns that "these problems are exacerbated by market distortions, arising from tariffs and subsidies in developed countries, tariffs in developing countries and the market power in some commodity supply chains of large transnational corporations."

The report urges the elimination of market distortions, and warns that high agricultural tariffs and producer subsidies in developed countries limit market access and depress commodity prices.

While markets for agricultural products in developing countries are the fastest growing, the report warns that they are also generally heavily protected.

FAO's Agenda for Action to combat commodity oversupply

SOCO 2004 lays out an agenda for action to combat the growing problems caused by oversupply and market distortions. It urges World Trade Organization negotiations to give priority to reducing agricultural tariffs, producer support and export subsidies in developed countries. It calls for the elimination of tariff escalation that penalizes exports of processed goods from developing countries. At the same time, it urges developing countries to reduce their tariffs in order to encourage trade among themselves and to allow their consumers to benefit from lower world prices. It also highlights the need for developing countries to improve their capacity to take advantage of opportunities opened by trade liberalization.

The report calls for measures that would help LDCs improve their capacity to take advantage of trading opportunities and to participate more effectively in trade negotiations. It suggests compensating low-income economies for any loss of trade preferences that result from the on-going WTO trade negotiations.

Increased investment to improve productivity of domestic food production in developing countries is also recommended by the FAO report, along with mobilizing resources to support generic promotion campaigns and diversification into non-traditional agricultural exports and the export of value added processed goods.

Programmes to help farmers insure against shocks that could damage their crops or undermine prices are among the report's recommendations. Weather insurance, forward-pricing systems and market-based price insurance are some of the schemes that have been proposed to deal with the inherent volatility of agricultural markets.

4.Corporate friendly Bush budget

George Naylor, President
National Family Farm Coalition

The proposed Bush budget cuts for FY 2006 will hurt family farmers, but give little relief to taxpayers while delivering low priced farm commodities to the corporate livestock industry --- Tyson, Smithfield and Cargill.

Because the 2002 farm bill doesn’t do what a farm bill is supposed to do—support market prices and avoid wasteful overproduction --- farmers have become dependent on government subsidy payments which are getting the ax in this 2006 budget. As it is, most farmers are barely surviving at current subsidy levels.

The new budget proposals and the legislation that would accompany them actually re-open the 2002 farm bill, and the authors of that bill --- corporate agribusiness --- remain the winners at the expense of family farmers and taxpayers. Secretary Johanns’ calculations show that increased spending from FY 2004 to FY 2005 --- over $10 billion for commodity program payments --- are a direct result of farm prices dropping once again below marketing loan rates.

If farm programs supported farm prices at levels that farmers received in FY 2004 due to crop shortfalls, taxpayer savings would be at least that $10 billion rather than the relatively small savings of $587 million attributed to the 2006 payment reforms.

Secretary Johann’s projected 2006 savings of $5 billion is "in part due to projected commodity price recovery" which no one can predict. The opposite could also happen since there is no floor under farm prices and crop expansion is common in many countries of the world.

The proposal to limit government payments to $250,000 per year may affect some large cotton and rice producers, but will have little effect on who produces other commodities. If cotton and rice producers shift production to corn, soybeans, or wheat, this will increase overproduction of those crops and further depress the farm price.

The 2006 budget provides no new funding for farm ownership loans in effect barring a new generation of farmers. It also dismantles important rural development programs, slashing their funding and moving the programs to the Department of Commerce; which will add confusion to both the program delivery and the mission of these programs.

Free trade agreements --- especially the WTO --- are the source of payment reforms that will most likely hurt farm income. The goal to decouple payments by limiting marketing loan benefits to historical production (on 85% of historical acreage) follows WTO edicts. The five percent cut in direct payments and countercyclical payments may seem small but in fact account for $3.6 billion of the projected savings. These are real cuts on top of record low commodity prices.

For U.S. farm and trade policy to address the low prices received by farmers in developing nations, our farm bill would need to seek international cooperation in setting price supports (actually raising prices) and shared responsibility of the major exporting nations for food security reserves and supply management.

Instead, these budget reforms only exacerbate the failed current policy that dooms farmers around the world to poverty because many of them won’t get any government payments. The agribusiness giants will continue to dump cheap commodities to replace local food systems with its corporate manufactured food system.

To get to the heart of the farm problem and budget deficits, the National Family Farm Coalition proposes a new farm bill solution: the Food from Family Farms Act (FFFA). FFFA establishes a price floor that would force multinational grain traders and processors to pay farmers at least the cost of production for their crops.

Our policy proposal also includes grain reserves to increase food security, and increased incentives for bioenergy crops and environmentally sustainable production. Since these new budget proposals re-open the 2002 farm bill, it’s high time we seize the opportunity and strengthen our food and farm policy to support a family farm system rather than expanding a corporate farm system at taxpayers’ expense.

5. Farm Coalition Endorses Payment Limitation Reform Legislation

For ImmediateRelease February 15, 2005
Contact: Ferd Hoefner 202-547-5754

The Sustainable Agriculture Coalition today endorsed commodity program payment limitation reform legislation introduced by Senators Charles Grassley and Byron Dorgan. The proposed legislation would place a limit of $250,000 on the amount of commodity payments any one farm can receive on an annual basis and close an array of existing loopholes in order to distribute scarce federal dollars in a more equitable way and restore integrity to the program.

The bill introduced today is consistent with the payment limitation reform proposal contained in last week's budget request from the President and with the 2002 Farm Bill floor amendment that passed the Senate floor with a two-thirds affirmative vote, and builds directly on recommendations of the 2003 USDA Payment Limitation Commission report and the 2004 U.S. General Accounting Office report.

"Passage of this initiative will level the playing field for family farmers by limiting the ability of the largest producers to bid land away from smaller and beginning operators and will raise farm income by reducing land prices and rents and discouraging price-depressing production on every last acre of land," according to Ferd Hoefner, a representative of the Coalition.

The bill would establish effective caps of $40,000 on direct (fixed) payments, $60,000 on counter cyclical payments, and $150,000 on loan deficiency payments and marketing loan gains, including gains on generic certificates and forfeited commodities. The combined limit would be $250,000. In comparison, under current law the cap on direct payments and counter cyclical payments is $80,000 and $130,000, respectively, and there is no effective cap on loan deficiency payments and marketing loan gains, and hence no effective total limitation.

The bill would also direct USDA to promulgate regulations that count all payments on production under the primary control of a single person toward that person's limitations. This would prevent mega farms from avoiding the limitations by constructing complex business relationships that allow them to control production but put crop ownership and payments in the name of other parties. These regulations would come into play only when payments on the production controlled by a person exceed the effective limits established by this Act. Finally, the bill would improve USDA's enforcement ability by instituting firm penalties for fraud.

"It is time to stop forcing the taxpaying public to pay for farm consolidation and the loss of economic opportunities in farming," said Hoefner. "The current lack of effective payment limits hurts family farmers and the rural communities they help support, harms the environment, and compounds our compliance problems with world trade rules."

The Sustainable Agriculture Coalition represents grassroots farm, rural, and conservation organizations from across the country that advocate for public policies supporting the long term economic and environmental sustainability of agriculture, natural resources and rural communities.

6. Anti-GMO ballot measures miss the mark

By Deborah Rich
Prairie Writers Circle

We're working hard chasing down signatures out here in California, but in support of the wrong ballot measures. Instead of backing initiatives to ban genetically modified crops, we should be forcing a vote on whether to require all agriculture to be organic -- not only in balmy, crop-diverse California, but in every state.

I agree that genetically modified crops likely jeopardize the intricate web that has evolved between plants, soil microorganisms and animals in ways little understood and difficult to anticipate before being made painfully apparent. Substituting human judgment for the sieve of evolution as the determinant of whether the DNA of different kingdoms of life should mix ought to give us pause.

But genetically modified crops are merely symptoms of the underlying problem of industrialized agriculture and its reliance on chemical pesticides and fertilizers.

Plants altered to produce their own insecticides, or to withstand herbicide applications, are crop chemicals in a new and more convenient form. Like their liquid, granule, dust and gas predecessors, genetically modified crops extend the illusion that we can indefinitely feed, clothe, house and transport our populous species with little regard for the basic tenet of biodiversity and the natural systems of nutrient and energy recycling upon which all life depends. Outlaw GM plants without a fundamental change in our approach to agriculture, and our laboratories will soon spew out different and equally disturbing innovations.

We don't have the time, personally or environmentally, to fan out gathering signatures to counter the release of each new generation of agricultural chemical. We need, instead, to vote once for a system of food production that promotes the health of the land. We need state referendums requiring all agriculture to switch to organic within a reasonable time. By definition, this would outlaw GM crops, and nearly all other forms of synthetic chemicals.

The past 10 years have made a mockery of the original rationales offered for radically altering the DNA of plants: Much of the world is still hungry, we're still bailing out our farmers with a national farm bill that will cost us well in excess of $100 billion, and pesticide use on the major GM crops is increasing, not decreasing.

But during this same decade, we have reached a point of critical knowledge about how to grow our food organically. We could vote, today, to require all agriculture to be organic within 10 years and know that neither we, our children nor our poor will go hungry due to insufficient crop production.

For 24 years the Rodale Institute in Pennsylvania has conducted the Farming Systems Trial comparing organic farming side by side with chemical-based farming. Corn and soybeans are the staple crops of the trial, just as they are of the United States. The study has shown that organic yields consistently match conventional yields.

Organic has fared well in other tests. Bill Liebhardt, director of the University of California's Sustainable Agriculture Research and Education Program from 1987 to 1998, reviewed studies at seven universities and found organic yields matched or almost matched conventional yields.

Decidedly unbalmy North Dakota grows nearly as many certified organic acres as California -- 145,500 compared with nearly 150,000, respectively, in 2001.

The National Organic Program, which has regulated use of the word "organic" on food labels since October 2002, provides a good starting point for identifying what practices would and would not be allowed under an organic mandate. A national network of organic certification agencies already exists and, with certified organic cropland in nearly every state, we have a contingent of experienced organic farmers at the ready.

I'd like to think that a president would carry the torch to draft and pass legislation requiring U.S. agriculture to adopt organic practices: "All-American, All-Organic." But few presidents can dare be so bold given the lobbying strength of conventional agriculture and its chemical suppliers. Instead, the vote will have to begin with us, and gather strength state by state.


Deborah Rich raises olive trees near Monterey, Calif., and has written about agriculture for the San Francisco Chronicle and other publications. She wrote this essay for the Land Institute's Prairie Writers Circle, Salina, Kan.

7. Agriculture Export Dumping Booms During WTO's First Decade: U.S. Farm Bills Increase Dumping Trend

February 9, 2005

Contact: Ben Lilliston, U.S., 612-870-3416, blilliston@iatp.org
Carin Smaller, Geneva, 41 22 789 0734, csmaller@iatp.org

Minneapolis - Ten years after the enactment of the World Trade Organization (WTO)'s Agreement on Agriculture, U.S. food companies are still exporting crops at prices below their cost of production (dumping) onto world markets, found a new report released today by the Institute for Agriculture and Trade Policy (IATP).

IATP's report, WTO Agreement on Agriculture: A Decade of Dumping - United States Dumping on Agricultural Markets, looks at export dumping from U.S.- based food companies onto world agricultural markets. The analysis, based on the most recent numbers available (2003), provides dumping calculations from 1990-2003 for five commodities grown in the U.S. and sold on the world market: wheat, corn, soybeans, rice and cotton.

"It is clear that the WTO Agreement on Agriculture is doing nothing to address agricultural dumping and its severe consequences for farmers around the world," said IATP President Mark Ritchie. "The low global prices caused by dumping hurt farmers around the world, including U.S. farmers. It's time for trade negotiators to put this issue front and center."

Using data from the U.S. Department of Agriculture (USDA) and the Organization for Economic Cooperation and Development (OECD), IATP found that in 2003 agriculture exports from U.S. based global food companies were sold well below the cost of production:

  • Wheat was exported at an average price of 28 percent below cost of production;
  • Soybeans were exported at an average price of 10 percent below cost of production;
  • Corn was exported at an average price of 10 percent below cost of production;
  • Cotton was exported at an average price of 47 percent below cost of production;
  • Rice was exported at an average price of 26 percent below cost of production.

Dumping is one of the most damaging of all current distortions in world trade. Yet, since its inception the WTO has refused to address or even acknowledge its negative impacts on rural economies around the world. Developing country agriculture, vital for food security, rural livelihoods, poverty reduction and generating foreign exchange, is crippled by the predatory competition from major commodities sold at well below cost of production prices in world markets.

The report found that dumping levels increased significantly for every commodity after the passage of the 1996 Freedom to Farm bill. The 1996 bill, followed by the 2002 U.S. Farm Bill, produced a vast structural, price-depressing oversupply of major agricultural commodities. This oversupply has driven commodity prices down worldwide. Both the 1996 and 2002 Farm Bills were driven by efforts to make them compliant with WTO rules. The result has been the institutionalization of agricultural dumping by U.S. farm policy, the report concluded.

Each of the five major export commodities saw a significant jump in export dumping when comparing the seven years (1990-1996) prior to the 1996 Farm bill to the subsequent seven years (1997-2003):

  • Wheat dumping levels increased from an average of 27 percent per year pre-1996 to 37 percent per year post 1996;
  • Soybean dumping levels increased from an average of 2 percent per year pre-1996 to 11.8 percent post-1996;
  • Maize dumping levels increased for an average of 6.8 percent per year pre-1996 to 19.2 percent post-1996;
  • Cotton dumping levels increased from an average of 29.4 percent pre-1996 to an average of 48.4 percent post 1996;
  • Rice dumping levels increased from an average of 13.5 percent pre-1996 to an average of 19.2 percent after 1996.

"Agriculture subsidies are not driving dumping," says Ritchie. "It is the absence of farm programs that bring production in line with supply. Without these programs, farmers will over-produce with or without subsidies, and dumping will continue."

The full report, along with a Q and A on what the results mean, is available at: http://www.iatp.org .

The Institute for Agriculture and Trade Policy works globally to promote resilient family farms, communities and ecosystems through research and education, science and technology, and advocacy.

8. Fair trade sweetens pot

By Elizabeth Weise, USA TODAY, Feb. 10, 2005

Supporters of farmers in developing countries are urging consumers to buy fair-trade chocolate for their valentines to ensure that farmers who grow the cocoa beans are paid a fair price for their crop.

Chocolate may be the stuff of reverie to the eater, but it can mean misery for the small farmers that grow it in equatorial countries in West Africa and Central and South America, says Haven Bourque, a spokeswoman for TransFair USA, the U.S.-based non-profit organization that certifies fair trade coffee, tea, chocolate and fruit.

"If you're growing cocoa in Ghana and you're not part of a cooperative, you're probably illiterate," she says. "You don't have a truck, so you're dependent on the middleman to come to you. You don't have a scale, so you're dependent on his scale as well. And you certainly don't have a cell phone, so you don't know what the price of cocoa is today on the New York commodities exchange."

Fair-trade products aim to eliminate the middlemen and let the farmers deal directly with buyers. The first fair-trade product was coffee in 1999. Today chocolate, tea and bananas are certified through Fairtrade Labeling Organization International, a consortium of fair-trade groups in the USA, Japan, Canada and 17 European nations.

The fair-trade mark on a product ensures that:

  • A fair price is paid to farmers under direct, long-term contracts.
  • Workers are paid a living wage.
  • No children or forced labor are involved.
  • Sustainable farming is practiced.

To be certified, each producer is inspected every year, and products that use the fair-trade symbol are subject to audits to make sure they truly are using fair-trade ingredients.

Lutheran World Relief has one of the largest fair-trade chocolate programs, selling through parishes and online.

Fair-trade cocoa-growing co-ops in Ghana have "dug wells for clean drinking water and spent money on education. So not only are those farmers benefiting from the fair-trade system, but the whole community (benefits)," spokeswoman Brenda Meier says.

Less than 1% of the $13 billion U.S. chocolate market is fair-trade certified, but it's a growing market. From 2003 to 2004, sales grew 78%, and TransFair USA expects to double the volume of cocoa products it certifies in 2005, says Christopher Himes, TransFair USA director of certification.

Fair-trade chocolate generally costs about the same as high-end designer chocolate. A 3.5-ounce bar typically retails for $3.50 to $3.75. Worldwide, the fair-trade price for chocolate has been set at a minimum of $1,750 per metric ton of hulled cocoa beans. The global export market average price ranged from $1,463 to $1,800 over the past few months, says Ann Prendergast, a cocoa analyst with REFCO, a financial services group.

But what cocoa goes for on the New York Board of Trade isn't what's paid at the farm gate. In Ghana and the Ivory Coast, two of the world's major cocoa producers, farmers typically get about $160 per metric ton of cocoa, says Judy Ganes, a cocoa analyst with J. Ganes Consulting.

But instead of selling to middlemen, fair-trade farmers in those countries sell through cooperatives and typically are paid $225 to $300 per ton in addition to benefiting from the social programs provided through their co-ops.

"The difference is that the farmers are getting the fairest deal out of the export price possible," says Charlotte Opal of TransFair USA. "In the traditional supply chain, the middlemen and the exporters keep most of the profits, and the farmers are left with very little."

The World Cocoa Foundation, with support from the chocolate industry, has countered fair trade with several small programs aimed at improving the productivity, marketing and efficiency of cocoa farmers worldwide, president Bill Guyton says.

The foundation's position "is that each company makes its own marketing decisions."