The Chocolate industry is one of huge proportions, equating to roughly $100 million worth of sales every year. There are no signs of slowing down, shown by global cocoa growth of 18% over the past 5 years to 4.7 million tonnes being produced every year. The greatest exporters of cocoa beans are found in West Africa, in particular Ghana and the Ivory Coast, where the tropical rainforest provides the ideal climate for growth. Despite the constant growth in the Chocolate industry, some cocoa farmers are poorer now than they were in the 1970s and 1980s largely due to the exploitation of the farmers by large multinational corporations.
Cocoa farming typically takes place via a slash-and-burn technique, where a large area of forest is burned, leaving behind rich soil in which the cocoa beans are planted. When the land becomes infertile it requires more labour and time, and the resulting lower quality of cocoa bean means that many farmers move onto new land and it starts again. The constant demand for cocoa beans from large corporations has placed enormous pressure on farmers to expand, which not only increases supply but leads to a severe drop in the amount of suitable arable land for cocoa bean farming to take place. The supply of land for cocoa beans is finite and the lack of sustainability is worrying for the future of the cocoa industry. The lack of land left has led to farmers operating on poorer quality land which results in more labour. Due to the limited number of workers, to increase their labour force, farmers have turned to child labour as a cheaper way of operating on poor land. Without such pressure placed upon farmers, they would not have to turn to the immoral child labour to stay afloat and keep their farms operating.
In spite of producing the cocoa beans, cocoa bean farmers across the world, most of whom are situated in the developing world, are paid only an estimated 6.6% of the price of a confectionary bar. In an attempt to combat this Ghana and Ivory Coast, who together produce 60% of the worlds’ cocoa beans, joined forces. Together they formulated a ‘living income differential’ (LID) of $400 per tonne which is an additional payment with the hope of trying to raise the amount that farms earn from the cocoa beans which they produce. However, leading US confectionary producer, Hershey managed to evade paying the LID by purchasing cocoa beans through the New York futures market. Following this move was a large backlash from Ghana and the Ivory Coast, who used their limited leverage ability to ban Hershey from operating any of their sustainability projects within Ghana or the Ivory Coast. These projects are massively beneficial to Ghana and the Ivory Coast but the loss of them of affects the public image massively if they are not seen as being a sustainable country. As a result of this Hershey agreed to pay the LID and the sustainability projects were restored. Although, it can be argued that the main reason for the retreat by Hershey was not the response from Ghana and the Ivory Coast, but rather the threat of a public backlash on their brand image.
Alongside the LID, in 2020 both Ghana and the Ivory Coast have raised the price of cocoa beans by around 20% to $2,600 per tonne, which is still $500 less than what the reputable ‘Cocoa Barometer’ has estimated is a suitable price for farmers to achieve the living wage. On top of this, sustainability projects are leading to many small farmers producing more which increases supply but drives down the price, decreasing the standard of living for the farmers and increasing the profits of the large multinationals.
What can farmers do to prevent their exploitation? Giving more power to the farmers is a simple option but one that is very hard to implement, given the massive influence the large confectionary multinationals hold across the world. If West-African farmers were to set their own price then they could provide themselves with a suitable wage, but there is the constant threat of having their price cut by other cocoa bean producing nations such as Brazil and Indonesia. An alternative approach would be for farmers to diversify their output, perhaps with a crop such as palm oil or rubber, which can be planted when the land has been exhausted by cocoa bean farming. Diversifying their output would allow farmers to be less dependent on the control of the confectionary industry and hence a less risky endeavour.
The Chocolate industry has had a rocky relationship with West Africa, and much has to change in the coming years for the farming of cocoa beans to be sustainable in the long run. The collaboration of Ghana and the Ivory Coast is a welcomed step as they can use their combined size to increase their bargaining power over the multinational corporations.