§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ainger]5.35 pm
§ Linda Gilroy (Plymouth, Sutton)
May I say how pleased I am to have secured this dabate and to be able to talk about my involvement with Fairtrade chocolate and cocoa, which began by chance. I had gone for a break at lunchtime in Victoria street and went to The Body Shop to purchase a few cosmetics. However, I succumbed to the temptation of what I believe is called an impulse buy. Next to the cash machine was a cleverly sited row of chocolate bars and, as I am a self-confessed chocoholic, my hand strayed towards them. I added one to my purchases.
It did not take long to investigate the contents of the bar. It was so good that I was prompted to investigate the wrapper and I then discovered that Divine chocolate was a Fairtrade product which is supported by Christian Aid and Comic Relief as well as The Body Shop and the Department for International Development. It is the product of The Day Chocolate Company, which is based in the United Kingdom and is part-owned by a co-operative of Ghanaian cocoa growers.
Later that day, while having a cup of tea—Fairtrade, of course—with my hon. Friend the Member for Bristol, West (Valerie Davey), I asked her whether she had come across fairly traded chocolate. She knew it well, having helped to launch it in her constituency. In fact, there are "Divine cities" that co-operate with The Day Chocolate Company to market the product the length and breadth of the United Kingdom, but I am not sure whether Bristol is one. As we left a cafeteria in the House, we put a comment in its book. "We have Fairtrade tea and coffee. What about Fairtrade chocolate? Divine chocolate is yummy!" Shortly after, a note appeared to say that the brand was "being investigated" and, in February 2001, Divine chocolate arrived next to the cash tills in the House of Commons. An early-day motion on the Order Paper welcomed its advent and quickly attracted signatures from many hon. Members.
Fairtrade has a good and growing track record across a range of products sourced from countries across the world. The fair trade movement is well under way in the United Kingdom and there are currently more than 90 Fairtrade Mark products. They range from bananas to tea and chocolate. In fact, a recent survey suggests that the majority of people would prefer to buy Fairtrade Mark products.
Backed up by the Fairtrade Foundation, the Fairtrade Mark is an independent guarantee of terms and conditions. They include a guarantee of a secure price above market price for the raw material, an extra social premium, long-term trading contracts, decent health and safety conditions and a commitment to support community programmes aimed at empowering farmers to increase their abilities to be self-sufficient.
On a visit to Ghana this summer, I learned the story of Kuapa Kokoo, the farmers' co-operative that produces the cocoa used in Divine chocolate, and how it has taken the concept of fair trade a step further. Kuapa Kokoo is linked to The Day Chocolate Company in the UK and owns one third of the company's shares. This unique arrangement means that the producers are able to play an active role in 1088 decisions about how Divine is produced and sold as well as to share in the profits. Consequently, cocoa growers will receive more than the fair trade premium and very soon, when the company reaches the profit stage, the profit from the end product will start to flow back to Kuapa Kokoo and its farmers.
Cocoa is at the heart of Ghana's economy and everything has developed on the back of it—its roads, hospitals and schools. In the late 1970s, the price of cocoa plummeted by two thirds. Droughts and fires in the early 1980s caused further damage and the economy was devastated. The World Bank and the International Monetary Fund intervened and advised that liberalisation of the cocoa market would be necessary to rescue the economy. Kuapa Kokoo was a response to the Ghanaian Government's policy to liberalise the internal market in 1992 in response to the advice of the World Bank and the IMF.
Farmers, led by the late Nana Frimpong Abebrese, and with help from the British non-governmental organisation, Twin, were behind the move. Abebrese was the farmers representative on the executive board of the directors of the Ghanaian cocoa marketing board. He was concerned about what would happen to the cocoa farmers after liberalisation of the cocoa market, fearing greatly the entry of the private market. He saw the need for the farmers to have their own organisation to participate in cocoa trading and set out to establish that with the help of Twin, which provided the finance for Kuapa's establishment, as well as technical support and contact with the fair trade partners in Europe.
By trading their own cocoa, the farmers are able to manage the selling process more efficiently than the Government agents, and thus receive more of the profits. Kuapa Kokoo prides itself on transparency and democracy and sets itself high standards in its business practices. It uses accurate weighing scales that can be understood by the farmers and all the decisions affecting farmers are made by elected representatives. Kuapa Kokoo trains farmers to weigh and bag their own cocoa, which not only contributes to the end result of the farmers receiving more per sack than they would from other buying agencies, but provides them with useful skills. In addition, at the end of each year farmers receive a cash bonus per sack from profits.
My visit took me on a four-hour journey from Accra to Kumasi, a large town in the Ashanti gold-mining region of Ghana, where Kuapa Kokoo's headquarters are based. Kuapa Kokoo is a thriving co-operative that is composed of five main units: the Kuapa Kokoo farmers union; Kuapa Kokoo Ltd., which is a farmer-owned private licensed cocoa buying company; Kuapa Kokoo farmers trust, which receives and disburses moneys from the fair trade premiums and other funds meant for farmers; and the Kuapa Kokoo credit union, which was established in 2000 to promote savings and enhance development. When I visited last year, the credit union already had 8,000 members. Hon. Members who have credit unions in their constituencies will know that that is a considerable achievement in such a short period of time. The fifth main unit is The Day Chocolate Company, which was set up in 1998. It arranges the manufacture and marketing of Divine and Dubble chocolate bars in supermarkets across Europe.
1089 Kuapa Kokoo's strength comes from the participation of more than 35,000 ordinary small-scale farmers at village level. There are 750 villages in the co-operative. My encounter with one such village, Fernaso Domeabra, which in the Twi language translates as "If you love me, you will come to me", was an inspiration. Thanks to the Kuapa Kokoo fair trade connection, the village has a water project. The women and children no longer have to travel miles to collect water, which took up the best part of the day and left little time for education or for diversifying productive activity.
The village is one of several societies in the union in which women have developed an additional income-generating activity, in this case extracting palm oil, which helps to keep them going in the six months of the year outside the cocoa harvesting season. It also gives the farmers an income to supplement what they receive from fair trade and diversification, although they receive only about $50 a year. It is breathtaking to consider that the children's school fees are paid from such low incomes.
At an hour-long meeting with the co-op, the members' questions to me were very pointed. Why did the international buyers dictate the price of cocoa? What could I do to help with another water project? Some farmers from a village that does not have a water project had travelled four miles to meet me. They talked about the need for better health, and their solution, a health clinic, needed my support. When I later visited the farm of one of the women cocoa growers, I could see that snake and scorpion bites and cuts from large knives could cause death if not attended to fairly quickly. I could clearly see why a clinic was a top priority, along with a palm fruit-crushing machine, for which a plea was made by the women's leader.
I should explain that palm fruits grow in a cluster, and each tiny fruit has to be taken and crushed with a stone before it can be mashed to produce oil, so it is no wonder that the women wanted a machine to do it for them. That is a daunting shopping list, but one that they now have the capacity to tackle for themselves, thanks to the vision of the four people who worked to found their co-operative, Kuapa Kokoo. Almost half the people whom I met that day must have been under the age of 12. Within their lifetime their aspirations can be achieved in a sustainable way, and by their own efforts and those of their elders.
As a Labour and Co-operative MP, I spoke to the village elders about the Rochdale pioneers, founders of the UK retail co-operative movement over 150 years ago. I told the story of how the mill workers had started with a small initiative of setting up their own shop to avoid exploitation by the mill owners, who had started to adulterate with chalk the flour that they were selling in their shops to the workers. The mill workers' initiative was greatly expanded within the lifetime of their children from its small beginnings in Toad lane. Among their achievements is what is now the Plymouth and South-West co-operative society, of which I and several hundred thousand people are members. The society drew on the advice of a Rochdale pioneer who took the trouble to visit the 10 men in Plymouth who founded it some 150 years ago.
1090 I am not sure that the people of Kuapa Kokoo believed me, but I believe that the seeds of co-operation which they have planted can produce similar dividends. The most effective thing that anyone can do to help them in their quest to improve their quality of life is to make sure that The Day Chocolate Company thrives. The people will then get not only a fair trade premium for the raw cocoa, but a share in the profit of manufacturing the end product. From little cocoa beans, bigger harvests may ripen.
§ Mr. Mark Lazarowicz (Edinburgh, North and Leith)
I am obliged to my hon. Friend for agreeing to take an intervention, and I congratulate her on securing the debate. She has explained that the benefits of the initiatives that she describes not only apply to the chocolate producers but are potentially much wider. Will she join me in welcoming the fair trade fortnight between 4 and 17 March this year? Will she join me in urging Members of the House to support that fortnight in whatever way they can, and also in urging the Government to encourage Departments and the civil service to assist that welcome initiative?
§ Linda Gilroy
I thank my hon. Friend for that relevant intervention. I certainly urge hon. Members and everyone who has a part to play in encouraging fair trade to take part in that event. I am pleased to tell my hon. Friend that two of the cocoa growers, Mary and Comfort, will be coming to Britain during that fortnight. They will visit Plymouth to meet some of the Plymouth and South-West co-operators, and go down to the Eden project in Cornwall where there is a tropical house containing, of course, a cocoa plant. I understand, although I have not yet visited it myself, that attached to the plant is a plaque referring to this project.
As a means of achieving a more balanced trade relationship between north and south, this end-to-end stakeholding by the producers of the raw material has a lot to offer. Not only does it seem set fair to increase their profits, but through having a say in how the chocolate is produced and sold, they increase their knowledge of the fiercely competitive European and western chocolate markets. A quick look at the notes of guidance as to what is involved in growing and harvesting cocoa, which I saw for myself when I visited the farm of a woman grower, shows why a cocoa grower deserves a fairer share of each bite of chocolate that we eat. It takes patience and exposure to considerable danger to establish and grow the golden pods, and harvest them for market. Waiting five years and risking snakes, scorpions and tetanus is definitely worth more than a fair trade premium in my book.
Kuapa Kokoo can get its members a better deal on all their cocoa, but they particularly benefit when their cocoa is sold to Fairtrade companies. Fair trade guarantees the farmers a minimum price for their cocoa of £1,666 a tonne and £66 a sack. That minimum price is intended to cover at least the costs of production, providing the co-operative with some security. Fairtrade companies also guarantee long-term trading contracts to the farmers. By contrast, Kuapa Kokoo farmers earn only £600 a tonne and £37 a sack when they sell their cocoa to conventional companies in other countries, and are not guaranteed long-term trading contracts.
Fairtrade companies pay an extra premium or bonus of £100 a tonne or £6 a bag to be used for community projects such as the water wells that I described or new 1091 toilets; it can also be given directly to the cocoa farmers to improve their income. When dealing with Fairtrade companies, the farmers are assured that the process for buying and selling produce is clear and fair. Unfortunately, although all its cocoa meets the required Fairtrade standard, Kuapa Kokoo can only sell a proportion of its cocoa, as little as 2 per cent., to Fairtrade companies because there is not yet enough demand. Only now are fairly traded chocolate bars becoming available in the shops on any scale.
Large international companies dominate the chocolate market in the UK, which is worth £4 billion; the European chocolate market is worth £14 billion, so it is a big market. Taken together, familiar names such as Cadbury, Mars, Nestlé, Suchard and Jacobs account for well over 80 per cent. of the retail market in chocolate confectionery. Competition between them ensures that their products remain innovative, strongly promoted and keenly priced, making it difficult for smaller companies such as Day to compete. Nevertheless, The Day Chocolate Company is doing well in integrating its product into the mainstream market. The Dubble chocolate bar is priced evenly with other similar products at 35p; the Divine chocolate bar is priced only slightly higher than comparable chocolate bars. At £1.19, Divine's newest product, Darkly Divine, with a substantially larger proportion of cocoa in the ingredients, will also be competitively priced. Because of the competitiveness of the western and European chocolate market, it is difficult for Day to maintain low prices and still return as much profit to the cocoa growers as it would like. The company is only now set to go into profit.
Despite the success achieved through advertising campaigns, competitive pricing and so on, Day still faces obstacles to assisting Kuapa Kokoo and furthering the objectives of fair trade. Certain trade tariffs make it difficult for Day to break into the western chocolate market while maintaining fair trade relations and facilitating the involvement of Kuapa Kokoo at all levels of production. Developed countries tend to maintain much higher tariffs on imports of processed commodities than of raw materials. It is therefore much easier for Ghanaians to sell cocoa to Europe than chocolate bars; in the European market, there is no tariff on cocoa, but the duty on chocolate can be as high as 27 per cent. If that tariff were reduced or removed, Day could undertake more processing of the product in Ghana, allowing the producers to be more involved and to gain more profits. Another impediment to Day's efforts to facilitate fair trade is the import duty on sugar. At present, it is not feasible for The Day Chocolate Company to use fairly traded sugar in its chocolate and bring out a mainstream-priced product. With the reduction of that tariff, Day could count fairly traded sugar, along with fairly traded cocoa, among the ingredients in its products.
I pay tribute to my hon. Friend the Under-Secretary of State for International Development. I am pleased that my hon. Friend the Member for Wolverhampton, South-East (Mr. Turner) has attended the debate, because it was with his help as Chairman of the Catering Committee that we managed to get those products into the House of Commons Tea Room, the Terrace Cafeteria and Portcullis House. I also pay tribute to the Minister and his colleagues for the Department's support for fair trade in general and the work of The Day Chocolate Company and the Kuapa Kokoo project.
1092 I have a small shopping list to which I hope the Minister will respond. Fair trade arrangements are still very small in relation to such markets and I hope that he can report on positive progress from the recent Doha talks that will not only help the cocoa trade, especially in Ghana, to thrive, but will also help fair trade arrangements in general to prosper. In particular, I would welcome his comments on the chocolate tariff and the sugar duty. I hope that he will join me in recognising the value of this special project.
The company's slogan is "Pa Paa Pa", which is Twi for "Best of the best". I believe that the Kuapa Kokoo project is unique in terms of the way in which developing world producers can not only receive a fair and ethical treatment from buyers of the raw material, but have a stakeholding in the manufacture of the end product. I hope that the Minister will join me in recognising the value of the project not only in its own right, but perhaps also as a model for building a better relationship with traders in developing world countries, to whom we certainly need to give extra consideration in the wake of 11 September and if the aspirations in the plan for Africa are to be met.
Finally, I hope that in responding positively to my shopping list, the Minister will make Divine chocolate a regular feature of his own.
§ Valerie Davey (Bristol, West)
I warmly congratulate my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) on securing this debate and on highlighting the importance of fair trade. I echo the request of my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz) with regard to bringing to the attention of the House the forthcoming fair trade fortnight, in which I am sure that many hon. Members—and I hope the Minister—will be actively engaged.
I assure my hon. Friend that Bristol is indeed a divine city. It is a wonderful city, but it is quite specifically a Divine chocolate city. It is one of those cities to which The Day Chocolate Company came to launch its product—something about which I shall speak further in a moment. The city encourages fair trade in many ways, but I should like to mention two aspects that illustrate the importance of specific projects. The community of Bishopston in Bristol is linked to Kuppam in India. That community link or twinning arrangement has brought about the establishment of a shop on the Gloucester road where a wide range of Indian textiles and colourful clothing is now available. Also, one of the Oxfam shops in Bristol is designated for fair trade. A large variety of fair trade goods is available in that shop.
I think that the momentum of what my hon. Friend said relates to the importance of getting fair trade produce—in this case, the produce of The Day Chocolate Company—into the mainstream market, so that we can go into our shops and into the supermarket and pick up this most wonderful product. I have been introduced only today to the Darkly Divine chocolate bar. I hope that my hon. Friend the Member for Wolverhampton, South-East (Mr. Turner), the Chairman of the Catering Committee, will recognise it as an addition to the products sold in Portcullis House and the other outlets in the Palace, and as the company's dark chocolate brand. We hope that all the products will be more widely accessible, as that is the only way in which the wider public will recognise the importance and value of fair trade.
1093 Let me turn briefly to the launch in Bristol. The Day Chocolate Company held the event at the Hotel Du Vin, which is now well known in Bristol and is newly established in a very old building—the old sugar house. As one enters the building, one is reminded that, in the olden days, looking out through the archway, one would have seen the masts of the ships coming into Bristol with sugar, which prompts thoughts of the unfair trade on the basis of which we are conscious—perhaps now more than ever—that our city developed. That unfair trade was in sugar and slavery. It was poignant to be able to launch Divine chocolate—a fairly traded product—there, knowing that the cocoa growers were part of the company's management. It felt as if things had come full circle, from unfair to fair trade.
An increasing number of people in the country are aware that that is the way forward. Working with partners throughout the world to establish fair trade, whereby growers, producers, conveyors and buyers are part of something that works to our mutual benefit, is at the core of what my hon. Friend the Member for Plymouth, Sutton and those in The Day Chocolate Company stand for. I respectfully suggest that the Minister and the Department also think along those lines. I look forward to his response to the debate.
§ 6.1 pm
§ The Parliamentary Under-Secretary of State for International Development (Hilary Benn)
First, I congratulate my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) on securing a debate on such an important issue. I know that she takes a strong personal interest in fair trade—that was evident from her remarks—and I greatly enjoyed reading the report that she produced on her visit. She kindly sent me a copy of it, complete with photographs, which brought it to life.
I confess that I discovered the delights of Divine fairly traded chocolate when, early in my ministerial career, I opened my Red Box to discover a couple of bars enclosed with some material about the product and the company that produces it. At that moment, I viewed my new responsibilities in a completely different and more relaxed light. At the end of last year, I attended Dubble's first anniversary celebrations. It was a happy and enjoyable occasion.
Fair trade is a small but significant part of the international trading system. Its aim is simple: to ensure that small and medium-sized producers are able to receive a fair price for their products and thus earn a living in an increasingly international market. In doing that, it tries to create a more equitable trading partnership between north and south.
The growth in sales of fairly traded products in developed countries has been dramatic, albeit from a low base. It has averaged 30 per cent. a year in recent years. Sales in the United Kingdom totalled £23 million in 1999, with chocolate, tea, coffee and, most recently, bananas accounting for most of that. I understand that Day Chocolate is stocked by all the major multiples—Tesco, Sainsbury's, Safeway, Waitrose, Asda, Somerfield, Morrisons, Boots and the Co-op—as well as Blockbuster Video, independent garage forecourts, and Shell.
Day has recently been active in promotional ties with the National Union of Students, the Nickelodeon children's cartoon channel, and the student and children's 1094 press. All that effort matters, because as my hon. Friend said, the product has to prosper in a strongly competitive market.
There is every indication of the trend continuing. As consumer demand increases, and a growing number of customers want to buy fairly traded goods, I hope that more fairly traded products can become available. Towards the end of last year, I met the Fair Trade Foundation to learn about its work. One of its initiatives is to increase the range of goods that have the Fairtrade label.
Through FLO—the European fair trade labelling organisation—a new process for assessing goods against the Fairtrade standard has been agreed. It is hoped that that will significantly increase the range of goods that can be certified. I echo the comments of my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz), who is unfortunately not in his place, about the importance of the fair trade fortnight. I look forward to having the opportunity to support it.
Fair trade has yielded many benefits over the years in the UK and in developing countries. There are opportunities to achieve more, but also challenges to be faced. The story that we have been debating—that of fair trade chocolate, Kuapa Kokoo and The Day Chocolate Company—clearly illustrates the achievements and the challenges.
Ghana is justifiably famous for its high quality cocoa production. It dominated the world cocoa market in the 1960s, but despite a peak in world prices, production fell dramatically in the 1970s and early 1980s. This was largely due to the taxation rate, which resulted in a decrease in industry incentives. Cocoa accounted for more than 75 per cent. of Ghana's export earnings in the 1970s, but for just under a quarter by 1992.
At this time, the Government of Ghana began to liberalise the internal marketing of cocoa. As we have heard, a group of local farmers formed the Kuapa Kokoo farmers union to provide a way of improving the economic and social position of cocoa farmers. Technical support from the UK was provided by Twin Trading, and financial support by the Department for International Development.
Kuapa Kokoo is now 10 years old and, like the British co-operative movement, it has gone from strength to strength. I was greatly stuck by the analogy drawn by my hon. Friend the Member for Plymouth, Sutton between the work being done at Kuapa Kokoo and the origins of the co-operative movement in this country. Kuapa Kokoo is the only major cocoa-producing co-operative in Ghana; it now has 35,000 members and it exported more than 30,000 tonnes of cocoa last year. It is also the largest supplier of fairly traded cocoa in the world, providing almost two thirds of the international supply. It is estimated that over the eight years of its operation to 2000, Kuapa Kokoo has yielded £600,000 in extra income to its members, over and above world market prices.
The benefits of the co-operative are more than just economic, however. Last year a DFID-funded study reported on these benefits and in particular assessed the extent to which they could be attributed to fair trade. The study found that while Kuapa Kokoo fair trade sales have ranged between 2 and 9 per cent. of total sales, the support of the fair trade movement has had a disproportionately positive impact on its members. Indeed, Twin Trading 1095 played a key role in organising and developing the co-operative in its early years to take advantage of both fair trade and mainstream commercial markets.
The premiums from fair trade sales fund many of the social services provided by Kuapa Kokoo, including health, education, the credit union to which my hon. Friend referred, water and sanitation. For example, more than 100,000 people—both members and non-members of Kuapa Kokoo societies—have received free medical attention and prescriptions. My hon. Friend also mentioned other benefits in terms of new skills and involvement in decision making.
Kuapa Kokoo has not rested on those achievements, however. Ghana has yet fully to liberalise cocoa export marketing, and state control over export marketing means that prices paid to producers remain relatively low. Kuapa Kokoo was keen to increase the value added to its cocoa, as well as its understanding of global markets. To address both those objectives, it decided to produce its own branded chocolate for sale in western markets. Together with Twin Trading and The Body Shop, and with support from Comic Relief and Christian Aid, it formed The Day Chocolate Company.
The Day Chocolate Company is an ambitious and innovative venture. Unfortunately, the banks perceived it as too risky to finance it themselves. To overcome this problem, DFID provided a bank guarantee until September 2004 to enable a commercial bank to provide £400,000 of loan finance. In doing this, DFID was aiming to lower the perceived risk of similar ventures, and thereby to encourage further participation of private financial institutions in fair trade initiatives, and in development more generally.
The Day Chocolate Company is an award-winning organisational model of partnership between producers, a fair trade organisation and an ethically minded business. It has been successful in helping to promote fair trade through sales and distribution via 15,000 outlets, many of which had never stocked fairly traded items before; through highly impressive media exposure, which is important given the lack of a large budget for advertising; and through innovative development educational activities which are reaching more than 4,000 primary schools and more than 1,700 secondary schools. Kuapa Kokoo has a one-third shareholding in The Day Chocolate Company, and its two elected farmer board representatives give it a new level of involvement in, and understanding of, the global cocoa supply chain.
The case of Kuapa Kokoo and The Day Chocolate Company highlights a number of wider challenges and opportunities for growing trade in both developing and developed countries, and it is to these that I now wish to turn. First, developing country Governments must continue to improve the legal and regulatory environment for processing agricultural products, private sector development and foreign direct investment. If business is to flourish—we know what an important part economic development plays in lifting people out of poverty, which is what we are concerned about—it needs the right climate.
Secondly, the private sector in developing countries needs to enhance its international competitiveness. For example, Ghana is moving to liberalise export marketing of cocoa. By virtue of the technical and marketing capacity that Kuapa Kokoo has built up through Fairtrade 1096 and its partnership with The Day Chocolate Company, it is likely to be one of only three companies licensed to export in Ghana.
Thirdly, Ghana and other countries may export raw cocoa to Europe, but they face tariff barriers if they want to export processed chocolate. The Department and other donors are working with developing country Governments to strengthen their negotiating power in trade talks.
Fourthly, Fairtrade and other companies promoting trade with developing countries face intense competitive pressure, particularly as they tackle mainstream commercial markets rather than traditional fair trade markets. Such companies are often dwarfed by their competitors' size and advertising budgets, while consumers may not always convert a desire to support Fairtrade into purchases. The Day Chocolate Company, cafédirect and others are showing that innovative marketing and distribution can lead to success.
Fifthly, we need to recognise the link between fair trade in particular and corporate social responsibility more generally. A growing number of companies are becoming interested and involved, and the ethical trading initiative helps them to do business in a more socially responsible way. As the public become more aware of the connection between the way business is done and its impact on the livelihoods of people in developing countries who are trying to earn a living for themselves and their families, so the pressure for greater business awareness will grow, and rightly so.
My hon. Friend the Member for Bristol, West (Valerie Davey) spoke about the links that have been developed between the city that she represents and organisations in her community. As in a number of cities in this country, shops selling fairly traded products are opening.
The issue of fair trade shows how important trade in general is to developing countries. Compared to the UK market for Fairtrade products—the £23 million to which I referred—the total market for such products is £15 billion a year. We must therefore help developing countries to increase their trade and economic activity through international trade agreements. Here, of course, reform is of the highest importance.
That is why the everything but arms agreement is a major step in the right direction towards building fairer competitive markets for agricultural trade between Europe and developing countries, and why the Government are pushing for significant common agricultural policy reform in relation to sugar and other agricultural products, although we know that progress has been slow. To be honest, Members have been debating CAP reform in the Chamber over the past quarter of a century, owing largely to opposition from domestic agricultural interests in continental Europe.
That is why a new trade round—a development round—matters so much following November's Doha agreement. The Doha declaration is encouraging, as it commits World Trade Organisation members to the objective of duty and quota-free access for the least developed countries and puts agricultural trade firmly on the agenda for the world trade negotiations. That is why we were so keen to have a new trade round. Without a new round, there is no possibility of reform and we expect tariff reductions that favour developing country exporters.
§ Linda Gilroy
In common with many other Members, I have received a lot of letters from people at 1097 non-governmental organisations who suggest that the world trade round should not go ahead until the rules are changed. Will my hon. Friend say more about that? The proposal is misguided and mistaken in terms of helping people such as those we are discussing.
§ Hilary Benn
That is an important point. The proof of the World Trade Organisation's success will be in creating terms of trade that are fair and equal and allow economic development across the globe. Members will be only too conscious of the obstacles that are placed in the way of developing countries in trying to achieve that objective, and agricultural protection is the biggest obstacle of all. The single most significant step that we could take through the WTO talks to help developing countries would be to reduce the agricultural protectionism to which I referred. The simple truth is that, if there is no new trade round, there will be no possibility of negotiating that improvement.
The test will be the extent to which those talks produce the development round and the liberalisation in agriculture to which all hon. Members present are committed. I hope that that will allow us to make progress on tariffs on sugar and chocolate.
Last night, the House gave a Third Reading to the International Development Bill, which puts poverty reduction at the heart of what we are trying to achieve. In 1098 truth, we can do no other if we are to have a chance of reaching the millennium development goal of halving the proportion of people living in extreme poverty by 2015. Creating a fairer international trading system that helps to make global markets work better for the poor, so that developing countries can maximise the opportunities and minimise the threats that arise from that global market, is of the greatest importance. In doing that, supporting small and medium-sized producers to compete effectively in international markets, including the fairly traded market, will matter a great deal.
I am genuinely grateful to my hon. Friend the Member for Plymouth, Sutton, because she has done the House a service in raising this matter. She went to Ghana to find out about this problem for herself, and took the trouble to report to the House and secure this debate. In so doing, she has given us the chance to discuss an important subject.
Finally, I can honestly say that I have never participated in a debate in the House that has aroused such anticipation of gastronomic delight. It is to the eternal credit of my hon. Friend the Member for Wolverhampton, South-East (Mr. Turner) that any Members present in the Chamber who find it difficult to resist such temptation will now be able to repair to a Room close by and enjoy the delights of the product that we have just debated.
§ Question put and agreed to.
§ Adjourned accordingly at seventeen minutes past Six o'clock.