How Your Chocolate Addiction Traps Cocoa Farmers In Poverty

With Christmas around the corner, the demand for chocolate will rise exponentially in the coming month. Yet, even though the chocolate industry is worth over £75 billion a year, cocoa farmers in West Africa – where 60% of cocoa is grown – still struggle to eke out a living.

Fairtrade International recently conducted a survey revealing that only 7% of all farmers currently earn a living income. And in rural Côte d’Ivoire, cocoa farmer households earn just 37% of a living income. According to a further report, Craving a Change in Chocolate, these farmers struggle to get by on as little as 74p per day – well below the world’s extreme poverty line. Yet, in stark contrast, for around £1.86 per day, which is the average price of a large bar of chocolate, they would be able to have a more sustainable life.

Living in abject poverty, they are often unable to afford necessities such as food, medicine, and education for their children. Furthermore, they are frequently exposed to unsavoury conditions, such as working without the proper protection; long hours in the blistering heat; and accidents or injuries as a result of working with dangerous tools.

What is at the root of the problem?

Michael Ehis Odijie, a Postdoctoral Research Fellow at the Centre of African Studies at the University of Cambridge, pointed to deforestation as the root of the problem. Many researchers believe that once forestland have been massively cleared, cultivation becomes difficult. Historically, migration into new forestland – following forest depletion – was an inherent part of cocoa production.

“Cocoa production moved from Mexico to Central America in the sixteenth century.  The Caribbean became the production hub in the seventeenth century, and then Venezuela in the eighteenth century. Ecuador and Sao Tomé were the hubs in the nineteenth century before Brazil took over. And then Ghana and Nigeria in the early twentieth century followed by Côte d’Ivoire. The main part of the story is rotation within these countries,” Odijie said.

“These movements follow a line of deforestation. Although cocoa cultivation is vulnerable to several shocks and stressors, such as weather-related shocks (climate change, droughts, floods), biological shocks (black pod disease, swollen shoot virus, pests, mistletoe), price fluctuation, and economic/political shocks, deforestation is the crucial factor in explaining these shifts. This is because, again, forestland is a production factor.”

A constant cycle of deforestation and migration inadvertently leads to a spike in production costs, which farmers are unable to recover by increasing their prices, since they have little control over such things. Chocolate manufacturers do not want diversification, hence many have started collaborating with NGOs to create sustainability in their supply chains. Despite this, sustainability programs do not take into account the changes in the cost structure due to post-forest cultivation.

Fairtrade International identified the problem and have been working towards introducing a reference price to take into account the cost of production. But Odijie argued that their methodology is deeply flawed, since it only collates quantitative responses to changes in cost structure, and instead, a reference price that takes into account the increasing cost of production is needed.

“The increasing cost of post-forest cultivation is what is causing poverty. Planters now have to employ more labour, use more fertilizers, and more pesticides – all of which increases the cost – regardless of price. This explains why planters (especially in Ivory Coast) earn more now compared to the past and are also poorer now. And while some of the extra costs get deflated in several practices, they show up in other areas. For example, some planters use extended relatives to cover the extra labour, but as a result, spend more money on food feeding the relatives,” he explained.

Child labour

With over 2 million children in Côte d’Ivoire and Ghana working in cocoa fields, child labour has also become a major concern. In a statement, Amnesty International surmised that the volatility of the cocoa price proves to be a big challenge for the farmers whose livelihood depends on it, pushing them into cost-saving actions such as slavery and child labour. It stated, “The cause is lack of control as well as price manipulation by large hedge funds counting on large quick returns on short term investments. This makes farmers not only the victims of the chronic underinvestment of their own country but also the victim of greedy businessmen at the stock market.”

One of the reasons why it has been difficult to completely eradicate child labour is because big chocolate manufacturers are unable to pinpoint every farm from where they source their cocoa. Mars, the maker of M&M’s and Milky Way, can trace only 24 per cent of its cocoa back to farms; Hershey, the maker of Kisses and Reese’s, less than half; Nestlé can trace 49 per cent of its global cocoa supply to farms.

“Until we address the poverty issue and raise farmers out of poverty, then this will continue to be a problem,” Timothy McCoy, vice president of the World Cocoa Foundation, told Raconteur.

“If there was an easy solution to this, then we would have solved it a long time ago and moved on.”