5.23.2006 ET

(CSRwire) West Bridgewater, MA- Responding to a plea for support from small-scale cocoa farmers in the Dominican Republic, the pioneering fair trade business Equal Exchange is urging that country's president to repeal a tax that it claims is illegal, discriminatory, and has been imposed at the behest of a small group of families and cocoa trading firms who have traditionally dominated the Dominican cocoa industry.

Until very recently almost all Dominican cocoa exports were controlled by a few wealthy families, who could count on buying cocoa from poor small scale farmers at low prices and without competition from other buyers. However this began to change in the 1990's when farmers started to work with one another to create their own cocoa marketing enterprise. That effort built CONACADO, a cooperative owned by 15,000 small scale Dominican farmers, and now the world's largest exporter of certified organic cocoa. For the traditionally dominant cocoa exporters CONACADO's grass-roots success has meant more competition, less business, and lower profits as CONACADO now exports 20% of the country's cocoa, often to high-end buyers who had traditionally shunned Dominican cocoa.

But instead of supporting this home-grown success that is bringing economic development and safe, sustainable agriculture to the nation's countryside, the government has agreed to a recommendation from CONACADO's competitors to impose a punitive tax on CONACADO members, and other small-scale cocoa producers.

Two years ago the traditional cocoa exporters asked the National Cocoa Commission, a tri-partite body comprised primarily of themselves and members of the Agricultural Department, to impose this steep, and ironically named "Solidarity", export tax of $124 per metric ton. This is a considerable commercial burden as the export price of cocoa is typically only $1400 per ton, or less, and the profit margin very low. Further, the proceeds of the tax are used to pay off debts incurred by the traditional exporters themselves. In just the two years since the tax went into effect (May 25th, 2004) small farmers have already paid $9.86 million in "solidarity" taxes.

In their fight to repeal the tax CONACADO has pointed out the National Cocoa Commission does not have the authority to impose taxes, let alone to do so in an arbitrary manner that benefits one sector of the cocoa industry at the expense of another. Further, the tax was not created by a law, as required by the Dominican constitution.

Since 2004 CONACADO and other producers' organizations have pursued other avenues to repeal the tax, but without success. For this reason they are now asking the President, Leonel Fernández Reyna, to intervene and are asking allies of small-scale Dominican farmers, both in and outside of the Dominican Republic, to speak out on this issue.

Equal Exchange is responding to this request for assistance, and is encouraging its partners and peers in the natural foods industry and Fair Trade movement to ask President Fernandez to repeal this illegal, and regressive tax. Equal Exchange also encourages individuals to lend their voices to this effort. Messages to the Embassy of the Dominican Republic may be sent by telephone (202-332-6280 x2523), fax (202-265-8057) or email: embdomrepusa@msn.com.

"For twenty years we have sought to bring more equity to a global trading system that normally keeps small farmers impoverished," said Equal Exchange president Rob Everts. "Low commodity prices have always been problematic but in this case, the government and large cocoa traders are not only not helping to improve the lot of small farmers, they are actively abusing their leverage to make matters worse" he added.
CONACADO is a democratically organized farmer cooperative founded in 1988. It represents more than 15 thousand small and medium-sized farmer members, organized into 136 community associations, which work together within eight regional "bloques".

Equal Exchange, a market leader in Fair Trade coffee and other foods since 1986, is a full service provider of high quality, organic coffee, tea, cocoa, chocolate and sugar to retailers and food service establishments. Major customers include Shaw's, Stop & Shop, Hannaford supermarkets, natural food stores, consumer food cooperatives, cafés, and thousands of places of worship nationwide. 100% of Equal Exchange products are fairly traded, benefiting over 30 small farmer cooperatives in 16 countries around the world. In keeping with its Fair Trade mission Equal Exchange is a worker cooperative, owned and democratically controlled by its employees.

www.conacado.com
www.equalexchange.coop

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