2018 Cocoa Barometer reveals plight of cocoa sector

Cocoa growing communities, particularly in West Africa, are facing poverty, child labour and deforestation that have been made worse by a rapid fall in prices for cocoa. Widely touted efforts in the cocoa industry to improve the lives of farmers, communities and the environment made in the past decade are having little impact. According to the 2018 Cocoa Barometer, a biennial review of the state of sustainability in the cocoa sector, the modest scope of the proposed solutions does not even come close to addressing the scale of the problem.

Smallholder cocoa farmers in Cote d’Ivoire – the world’s biggest cocoa producer, who are already struggling with poverty, have seen their income from cocoa decline by as much as 36% over one year. That fact reflects the world market price for cocoa, which saw a steep decline between September 2016 and February 2017. Farmers bear the risks of a volatile price; and there is no concerted effort by industry or governments to alleviate even a part of the burden of this income shock.

This price collapse was caused by overproduction of cocoa in the past years, at the direct expense of native forests. This can be equally attributed to corporate disinterest in the human and environmental effects of the supply of cheap cocoa, and to an almost completely absent government enforcement of environmentally protected areas.

Isaac Gyamfi, director of Solidaridad in West Africa, said: “The scale of the solutions brought to the cocoa sector by the industry, governments and civil society organisations is nowhere near the size of the problem. Cocoa and chocolate companies save billions purchasing cocoa, while spending millions on sustainability programmes. Governments of both producing and consuming countries do not have policies in place to correct this market failure.”
In addition to often wrenching poverty for cocoa farmers, there are a host of other problems:

• An average cocoa farmer in Côte d’Ivoire earns only a third of what he or she should to earn a living income.
• More than 90% of West Africa’s original forests are gone.
• Child labour remains at very high levels in the cocoa sector, with an estimated 2.1 million children working in cocoa fields in the Ivory Coast and Ghana alone. Child labour is due to a combination of root causes, including structural poverty, increased cocoa production, and a lack of schools and other infrastructure. Not a single company or government is anywhere near reaching their commitments of a 70% reduction of child labour by 2020.
• A “broken” market in which farmers have no real influence. While many of the current programmes in cocoa focus on technical solutions around improving farming practices, the underlying problems at the root of the issues deal with power and political economy, such as how the market defines price, the lack of bargaining power of farmers, market concentration of multinationals, and a lack of transparency and accountability of both governments and companies.

“As long as poverty, child labour and deforestation are rife in the cocoa sector, chocolate remains a guilty pleasure,” said Antonie Fountain, co-author of the Barometer. “Current approaches will not solve the problem at scale. Companies and governments need to acknowledge the urgency, and make a change. Efforts that cover less than 50% cannot be called ‘solutions’.”

Heske Verburg, director of Solidaridad in Europe, added: “A living income for farmers is the most important indicator for a sustainable cocoa sector. Governments should change market conditions. Cocoa and chocolate companies should find ways to redistribute value along the production chain. Together they can guarantee a living income for farmers.”

Recommendations for action in the report include the following:
• Make net income the key metric for all sustainability projects.
• Commit to a sector-wide goal of achieving a living income.
• Commit to a global moratorium on deforestation; focus on agroforestry and reforestation as environmental solutions.
• Move from voluntary to mandatory requirements, on human rights as well as on transparency and accountability.
• Develop sector-wide approaches at scale that address root causes to child labour.
• Increase urgency and ambition to reflect the scale of the problems, and implement changes that also address issues around power and political economy, not just at technical levels.

The report can be accessed online at www.cocoabarometer.org.

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