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How to Ensure Cocoa Farmers are Properly Paid

The UK TV series, Channel 4’s ‘Dispatches’, broadcasted a damning investigation into Cadbury’s use of child labour in sourcing cocoa from Ghana. It’s very shocking and disturbing. Kids who aren’t even ten years old, wearing just flip flops and t-shirts in sweltering heat are harvesting cocoa with machetes longer than their arms instead of going to school. The whole programme can be found HERE. It’s only 30 minutes, and even though it’s gruesome watching it’s still worth it;  hopefully it’ll persuade you to upgrade to craft chocolate.

Sadly this isn’t new news. Back in the 1990s the BBC broke the story of child slave labour in West African Cocoa. And despite a tonne of follow up TV programmes, media uproar, court cases, the US Congress’ attempt to pass Harkin Engel, and lots of consumer affront, not a lot has changed. Cadbury continues to sell 300 million plus Creme Eggs each year.

Indeed, ever since Cadbury has been sourcing cocoa from West Africa back in the 1880s, slave labour and other abuses on cocoa farms have been prevalent. Over a 100 years ago in 1908 Cadbury suffered an incredibly embarrassing court case versus The Standard (newspaper). But despite this and a massive consumer boycott in the 1920s, it seems that nothing really has changed in the world of commodity chocolate.

So how to fix this. How do we ensure that cocoa farmers are paid enough to live on?

The short answer is to treasure chocolate for its amazing variety of flavours, textures and tastes, and pay the farmers for this. We need to stop cocoa being treated as a ‘commodity ingredient’. We need to switch to craft chocolate that not only tastes better, but is also far better for you, the farmers, and the environment.

There is an incredible irony in the way that cocoa has been commoditised and cheapened. Chocolate literally has more flavour complexity than just about anything on the planet (if you want to experience this, just try THIS box of different bars all crafted from well harvested, fermented and dried Ghanaian cocoa). However, big chocolate has commoditised chocolate, and this has created a doom loop for cocoa farmers, their forests, our planet and our health.

Why are cocoa farmers paid so little?

Economics suggests that as demand increases, prices should rise. So given that demand for chocolate/cocoa has been steadily increasing, why are cocoa prices remaining so low and why are farmers being paid so badly?

Economics also has a concept called monopsony; basically a monopoly where the buyers have the power, effectively dictating prices. This is the position of almost all cocoa grown and purchased in West Africa (which accounts for over two thirds of the world’s production, with Côte d’Ivoire and Ghana by far the largest exporters).

There are a dozen ‘big chocolate’ companies who purchase over 80% of all the commodity cocoa beans grown in West Africa. And as these companies want to make as much money for their shareholders as possible, they seek to pay as little as they can for cocoa (and all the other ingredients) that go into chocolate bars and confectionery. And as part of this cocoa has been commoditized so that all cocoa is interchangeable and all that matters is price.

West Africa has literally millions of small farmers, each with 1-2 hectares, growing 50-200 bags of cocoa a year. These farmers struggle to make enough money. Over 90% of Cocoa Farmers in the Côte d’Ivoire are paid less than half what the World Bank believes is a ‘living income’; to put this into context, men take home $0.78 (US) per day, and women 25¢; and the living income they need is over $2.50 per day. So these farmers are desperate for more income, and cocoa is one of the few cash crops they can grow, so they do everything they can to grow more cocoa, including cutting down the few remaining rainforests to plant more cocoa (this is often cited as one of the major causes of the appalling deforestation, and desertification, in West Africa).

And so even though demand for cocoa is growing, the desperation of the farmers combined with their weak bargaining position and the ability to source more commodity cocoa (including some that is smuggled from neighbouring countries) means that the prices paid for commodity cocoa barely generates enough income for many farmers to survive. And as the C4 Dispatches programme graphically shows, these farmers not only can’t afford to pay to send their children to school, but they are so desperate that they have to put their children to work in harvesting cocoa.

Note: This is NOT a criticism of the Ghanaian government; they don’t want their children to have to work in unsafe conditions and not go to school. They do have laws against this. But they also know that over 90% of their cocoa farmers don’t make the living income benchmark.

So why can’t certification solve this problem?

For the last few decades, some amazing work has been done to help consumers access ‘ethical’ and ‘environmental’ brands where a price premium is paid to the farmers. In many crops it’s worked wonders; for example, Fair Trade bananas.

In the world of craft chocolate, Zotter pioneered organic and fairly traded chocolate in Austria. And here in the UK, even though it’s more ‘mass produced’ than ‘craft’ the work that Divine has done with Fair Trade chocolate and Kuapa Kokoo in Ghana is inspiring.

But unfortunately Fair Trade, along with other certifications and labels, just isn’t enough to break the poverty loop of commodity chocolate. Unlike, for example, speciality coffee, these certification initiatives have failed to break through and change consumer’s attitudes to paying enough for chocolate such that this materially changes the livelihoods of cocoa farmers.

At the risk of vastly over simplifying, here are some of the reasons why ‘certification’ isn’t a panacea in cocoa and chocolate (note: This is NOT to say that choosing a Fair Trade or organic supermarket bar is no different from buying another mass produced bar; rather it’s arguing to do more).

  1. Certification is REALLY hard, expensive and even dangerous to do for cocoa. And when it comes to a commodity crop (aka hard to trace and distinguish), it’s hard to enforce. So it’s perhaps not that surprising that C4’s Dispatches found so many abuses. At the same time it’s a credit to Ghana that Channel 4’s Dispatches were able to make the programme that they did… there are many other places in West Africa where making this programme would have been a lot less safe, and certification even trickier to get right.
  2. A lot of certification and labelling is, to put it mildly, ‘hogwash‘ or at best ‘greenwash‘.  
    • Some labels like “raw” and “ethical” may sound good, but they are utterly meaningless (a bit like the term “Belgian Chocolate”. Read more about reading labels HERE). 
    • Other certifications are really confusing; for example, mass balance fair trade upsets many consumers when they realise that the “fair trade” bar they’ve just bought may well have no fair trade beans in them (see HERE for more).
    • And there are now so many company labels (like Cadbury’s ‘Cocoa Life’) that it’s impossible for most consumers to keep track  and know what really is what.
  3. Consumers just won’t pay enough. Working out how much of a ‘premium’ consumers will pay for ‘Fair Trade’ is notoriously difficult; it varies by product type and also consumer. But even for Fair Trade coffee (one of the highest premiums with the highest acceptance rates), its only about 20%. And whilst this premium is welcome news for any farmer, in the case of a male cocoa farmer earning less than 85¢ a day (or 25¢ a day for a female cocoa farmer), this still means they are less than halfway to securing a minimal living income for West Africa.
  4. Ethical and environmental certifications don’t guarantee quality. Fair trade and organic are about how something is grown and harvested. They aren’t about ‘taste and flavour’. By comparison, ‘specialty coffee’ is in part defined by measuring the quality of the beans on the coffee farm (which may also be organic, fair trade, etc.). But in cocoa it’s very different; even “fine” cocoa is allowed to have up to 3% defects (e.g., mould, under fermentation, etc.) and it’s still certified organic, Fair Trade, etc. (hat yip to Martin Christy here).

Bottom line: These certifications persist in treating cocoa and chocolate like a commodity ingredient, where price and volume are all important and flavour can be synthesised with additives in the factory. And in the case where you’ve few buyers but lots of desperate farmers, this inevitably leads to the awful situation shown in the Cadbury exposé.

Why craft chocolate is the way forward:

As in specialty coffee, artisan cheese, craft beer, premium olive oils, malt whiskies, craft gins, fine wines, and almost every other food and drink, consumers will pay more if a product tastes better (and has more kudos and coolness). And these price premiums are FAR higher than any Fair Trade premium.

Craft chocolate clearly has oodles more flavour complexity, length and depth than can be found in mass produced chocolate which relies on additives, fortifiers and, above all, sugar. (And we think it’s a lot cooler, and far more impressive to serve at your next dinner party).

And craft chocolate makers know that they have to pay the farmers more for the extra work involved in planting, growing, harvesting, fermenting, drying and transporting these speciality beans. The premium paid by craft chocolate, and its long term contracts, really does break through; the premium craft chocolate makers pay for their beans is anywhere from two to over ten times the commodity cocoa prices, and way more than even the highest fair trade premiums.

However, even though these craft chocolate bars cost less than a round of beers in a pub, many consumers recoil at the thought of a £4, £5 or £6 bar of chocolate (or £8-10 Easter egg). And whereas specialty coffee now accounts for over 20% of all coffee spend in the UK, craft chocolate isn’t even 0.02% of the £5b plus spent on chocolate in the UK each year.

In part this is because mass produced chocolate has persuaded consumers that they shouldn’t expect to pay more than £1 for their ‘sugar rush’ of a chocolate bar. And this perpetuates the vicious cycle of commodity cocoa. The only way that a bar of chocolate can cost £1 is, as the Dispatches programme shows, for the ingredients to cost less than 11p (see minute 8). And this is only achievable through ‘commodity cocoa’; paying less than a living income to the cocoa farmers, and by using LOTS of even cheaper sugar (which is also highly addictive).

It’s not easy to break this ingrained habit. Humans are pre-programmed to like sugar, and chocolate is an amazing vector for “sweet delight”. At the same time, humans are unique in delighting in savouring flavour; and craft chocolate has more flavours than just about anything.

So we really believe that if you can break the sugar habit and upgrade to craft chocolate you can help break the vicious cycle of poverty, child labour and deforestation that are all inherent in commodity cocoa and mass produced chocolate.

Conclusion

We need to stop treating chocolate as a commodity where price is all important, where the primary ingredient of a chocolate bar is sugar, and where a mass produced bar’s taste and flavours are created through cheap additives, enhancers, sweeteners and sugar.

And we need to start to read the label. We need to check the ingredients on the reverse of the pack. We need to look for where your bar (or Easter egg) is really made (as opposed to processed and assembled). And we need to look on the label for where your beans really come from (i.e. the farm and co-op, not just the “single origin” country, occasionally listed on the front).

And we need to avoid being distracted, and misled, by a bunch of great sounding, but effectively meaningless, phrases like “Cocoa Life”, “slavery-free”, “ethically sourced” etc. We have to move beyond greenwashing environmental stickers. These distract from the real issue.

Notes:

i) This post is NOT arguing for a boycott of West African chocolate. Ghana, The Ivory Coast, Cameroon, etc. aren’t to blame for the way that ‘big chocolate’ has commoditised cocoa. Nor is it a criticism of Fair Trade. Rather, it’s a plea to upgrade to craft chocolate, and savour the flavour of great beans, and pay a little more to reward farmers for work.

ii) Whenever child slave labour is discussed, we inevitably get asked about Tony’s Chocolonely. Tony’s is a marketing machine, and has done an amazing job of (re)alerting the world to the problems of child labour in cocoa. But we side with Anne Riggs here who has evicted them from her ‘Slave Free Chocolate‘ organisation. Check the Tony’s labels: The primary ingredient is sugar. And try figuring out where their beans really come from, and how, and where, their chocolate is processed. For our ‘two cents’ please, SEE HERE.

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