Agri-food and Agri-environmental Economics Group AFEE

Abstract

This study investigates the rationale behind Fair Trade (FT) and Cor-porate Social Responsibility (CSR) and aims to compare both approaches in the context of the cocoa business. The cocoa market is characterized by a high volatility of prices, unbalanced power relations throughout the value chain, and a strong dependency on primary exports of low-income producing countries. Business ethics initiatives, such as FT and CSR, are perceived as responses to these issues. FT challenges the conventional value chain and provides an independent certification of affiliated market players to ensure that a larger share of the final price of products returns to farmers. In con-trast, CSR is implemented on an individual basis by international traders, global grinders, and chocolate manufacturers to provide Southern primary producers with social benefits. In the context of the cocoa business, FT and CSR converge with respect to their market-based approach, their provision of private regulation in value chains, and their objective to offer a contribu-tion to sustainable development. FT and CSR diverge, however, in how they address the vulnerability of cocoa farmers, in their response to the prevailing governance of the value chain, and in the level of consumers ’ involvement they require. Beyond this comparison, this study shows that the two ap-proaches may be perceived as intermediate stages on a continuum towards the mainstreaming of ethical cocoa products.