Ethical Capitalism in Action

Lang & Sam meet some cocoa growers in a remote part of Vanuatu

August 7, 2005
The Olboe Welcoming-Committee
As I sit on the woven bamboo verandah, writing, two young girls - perhaps six or seven years old - watch intently. They are giggling, and whispering to eachother.
The girls ignore the stout, snuffling pig that has just emerged from under the raised floor; they are oblivious to the tiny peeping chicks, scratching in the dirt nearby; they don't spare a glance for the whole coconut that has just been passed to Langdon for morning tea. All of these things are totally mundane in the context of village life. Rather, it is the sight of my ballpoint pen moving across my notepad that holds these girls transfixed. Here, writing materials are hard to come by, and the act of writing is truly novel.
It is mid-morning. Apropos of nothing, a rooster perched on the ridge of a nearby roof crows. He is echoed around the village: cockadoodle-do, cockadoodle-do, doodle-do, doo, do.
Cock-a-doodle-do to you too!
This ludicrous cacophony (cock-ophony?) has been going on since 2.00am. Ah, village life!
Welcome to Olboe1, home to over a hundred people on the north-west coast of Espiritu Santo, Vanuatu.
Espiritu Santo - the largest of Vanuatu's 83 islands - is famous for the diving and snorkelling it offers. It is far from famous for the cocoa it quietly produces. Lang and I have come to this remote corner of Santo to meet some ni-Vanuatu2 cocoa growers, and to see for ourselves what conditions the cocoa here is grown and processed under.
What we have found are conditions so primitive that synthetic agricultural pollutants (pesticides and fertilisers) have never made their way here. The cocoa beans grown in Olboe are totally organic - but light years away from the First World bureaucracy of organic certification.
Cocoa beans laid out to dry in the sun
We have also found that Olboe has a relatively hot, dry climate - distinctly different to other parts of Vanuatu - which lends itself beautifully to the natural sun-drying of beans. This means no forced drying, and, therefore, no smoke contamination in the final product. In short, Olboe is a bean-hunter's paradise!
It seems that the absence of agricultural chemicals in Olboe - and most of Vanuatu - has come about serendipitously as a result of the community's physical isolation, and lack of money (that is, they've never been able to afford the chemicals, and quite possibly don't even know such chemicals exist). It is ironic that Olboe's exposure to adversity has created a boon for us in our search for organic beans. But, then again, we are here to share our good luck around ...
We explained our position to the villagers: we want to pay a fair price for well-fermented, well-dried, organic cocoa beans; we also want to meet the growers, and see their harvesting and processing methods.  When we explained to the people of Olboe (with the help of Langer, our guide and interpreter) that organically grown cocoa can now attract a premium price on the world market, the growers' pride in their high quality ("nambawan") product became palpable.
The men nodded and smiled, and chatted amongst themselves. Then the chief's son, Langi, gave my faith in ethical capitalism an unexpected boost by telling us that our arrival in their village, and our desire to build a fair trading relationship with them, was a dream come true. Wow ... our business model ... a villager's dream come true!
Langi surprised us again by saying he was glad we weren't Christian missionaries, as he'd assumed when we first arrived. Lang and I glanced at eachother and smiled, recalling the stories we'd heard about the hapless missionaries who were killed and eaten as recently as a few decades ago. How times change! We keep our noses well out of religious affairs when we travel, but in Vanuatu we couldn't help but notice that the most imposing, modern, and permanent building in every village we visited was the Christian church.
The villagers meet with us under an enormous mango tree
As we continued talking with our hosts, a disturbing story unfolded. We heard how the cocoa growers in Olboe, and many other remote villages, are currently at the mercy of commodity traders who enjoy an effective monopoly in this area. The traders sail up and down the coast, stopping at villages irregularly, and without notice. (In fact, there is currently no practical means of notifying villagers of your arrival: Olboe is without even the most basic electronic communication devices, and the existing traders clearly have no incentive to provide or subsidise such infrastructure). Inevitably, the traders offer a rock-bottom price for cocoa, because they know that the growers have no other means of getting their produce to market. Here, the "world price" for cocoa means nothing - in fact, growers currently receive less than half that amount.
Having travelled to Olboe from Luganville ourselves, Langdon and I have a strong appreciation of how difficult it is to move people and produce around Santo, and why the villagers are totally dependent on coastal traders.
The distance from Luganville to Olboe is barely 100 kilometres as-the-crow-flies, or more like 160 kilometres via the coast. In most parts of Australia, you could reasonably expect to drive that distance in under two hours. On our journey from Luganville to Olboe, Langdon and I spent the first two hours in a 4WD (generously on loan, with a driver, from Santo Exports) travelling over deeply rutted, unsealed roads. After that, we spent eight hours in a fibreglass dinghy, motoring north through the Pacific Ocean, with only a pod of curious dolphins sharing our route. In total, the trip took ten hours. 
We're glad to feel the black sand under our feet after eight hours at sea
The cost of hiring the boat and its owner for the ocean leg of our journey was 21,000 vatu (roughly AUD$250) - not cheap for a 150km journey by Australian standards, but totally unaffordable on a ni-Vanuatu income3.
To put this in context, according to the villagers we spoke to, the Chinese traders currently pay 65 vatu (AUD$0.78) per kilogram for cocoa beans. The current (August 2005) world price for cocoa is US$1.52 per kilogram FOB4 (that's 173 vatu, or AUD$1.98).
In other words, for logistical and economic reasons it is totally out of the question for cocoa growers in Olboe to take their own produce down to Luganville to obtain a better price. Hence, during discussions with the growers, we agreed with them that a fair price for cocoa would be 130 vatu (AUD$1.57) per kilogram.
So, what would such a remote community spend extra income on? We saw instances where a few extra dollars and a reliable means of communication with the outside world could make a huge difference. For example, the village's water reticulation system (an above-ground network of polythene pipes) was broken when we visited. This meant that the villagers had to walk a considerable distance to gather water. All that was required to repair the broken pipe was a plastic joiner that, in Australia, we could buy for a couple of dollars at the local hardware shop. Currently, the villagers have no access to such basic supplies, and no means of ordering them. 
The Chief (in red t-shirt), his wife, and son-in-law bid us farewell.
Langer, our wonderful guide and interpreter, is on the far right.
The villagers themselves mention health care and education as being among their most pressing needs. Currently, a sick or injured villager has to walk south for an hour along a foot-track (there are no roads or motor vehicles here) to obtain very basic medical care at the village of Nokuku. The children of Olboe attend kindergarten in their village, but have to walk to a neighbouring village in order to attend primary school. An Olboe child has almost no chance of obtaining a high school education. The basic school supplies that I took for granted as a child - paper, books, pens and pencils - are almost non-existent in Olboe.   
Our trading partners at Santo Exports in Luganville are working on developing a basic radio communication system between Luganville and a number of villages along the west coast of Santo. They are also negotiating with ni-Vanuatu ship owners who may be contracted to service the west coast. This means that, in time, the people of Olboe can be contacted via radio so that they will know when to expect a ship, and can, in turn, order supplies. It is our intention to help the villagers develop confidence that their cocoa will be purchased regularly, in substantial quantities, and at a fair price.
Tava's goal is to build an ongoing trading relationship with villages like Olboe on Santo. When you buy our products, you can be sure that the price paid to the growers will represent a fair deal (see Fair's Fair for more details on our trading policies).
Order now to help us support the farmers of Vanuatu.

References:
1 Olboe is spelled this way in the village, but is commonly spelled "Olpoi" on maps
2 ni-Vanuatu means "of Vanuatu". This is the term used to refer to native inhabitants of Vanuatu (as opposed to "Vanuatuan", for example)
3 As of August 2005, the minimum wage  in Vanuatu is 16,000 vatu (AUD$195) per month. However, many subsistence farmers would not achieve anything like this level of income.
4 FOB stands for Free On Board and obliges the seller to deliver the goods on board a ship which has been nominated by the buyer.

The Cocoa Communiqué



A large US military base was established at Luganville, on Espiritu Santo island, during WWII.
The base accommodated up to 100 ships at a time, and a total of more than 500,000 personnel.
Today, Santo is something of a Mecca for scuba divers, who come to explore the SS President Coolidge (the world's largest accessible WWII wreck). The ship lies under 70 metres of water in the Segund Channel.







Vanuatu does not have a single native land-mammal (although bats, flying foxes, and dugongs are native to the islands).
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Vanuatu is home to the world's largest land crab - the coconut crab, which appears on the 20 vatu coin.
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Coconut crabs can live for 50 years, and grow to have a leg span of 1 metre.