Have you ever considered where the cocoa comes from in your chocolate bar? Chocolate is arguably one of the most popularly loved and sought after sweet food items for people from Western nations, but its key ingredient, cocoa, is big business in developing countries, where production often takes its toll on those who produce it.
There is “…a vast gulf between the children who eat chocolate on their way to school in North America and those who have no school at all, who must, from childhood, work to survive. The children who struggle to produce the small delights of life in the world I come from have never known such pleasure, and most likely, they never will.” - From Bitter Chocolate, by Carol Off
Here in Vancouver, chocolate is plentiful and available in supermarkets, cafes, specialty chocolate shops and convenience stores. The following information focuses on cocoa, examining the challenges that are faced at the market level and by those whose livelihoods depend on harvesting the tiny roasted cocoa beans in your everyday chocolate bars and truffles....
- An estimated 14 million people in over 30 countries in the developing world depend on cocoa production for their livelihoods.
- The eight largest cocoa-producing countries are Côte d'Ivoire, Ghana, Indonesia, Nigeria, Cameroon, Brazil, Ecuador and Malaysia, and represent 90% of world production.
- There are three varieties of cocoa trees. The most common is Forastero, which account for 90% of the cocoa beans produced in the world. It is found widely in West Africa and Brazil.
- ‘Big Chocolate’ companies -multi-national chocolate food producers such as Hershey and Kraft - compete for market space amongst niche chocolate groups
Pricing and Markets
- The cocoa cycle is characterised by boom and bust effects.Cocoa prices mainly respond to cocoa supply and demand factors. International prices tend to follow a long-term pattern linked to the cocoa cycle, which has been estimated to be of over 20 years. During cocoa boom periods there is a supply surplus that will result in falling and then stagnating prices.
- Consequently, low prices due to overproduction generally have a negative impact on harvesting, encouraging farmers to switch to other crops, a factor which again permits world prices to rise.
- Cocoa is a volatile commodity with wildly fluctuating prices and is frequently traded as futures or options – contracts that trade a commodity at a later date for a fixed price today. Since futures and options make income predictable, farmers should benefit from consistent selling prices for their crops over long terms, however futures contracts on the major markets are in units of 10 metric tons or more and the typical subsistence cocoa farm may produce just 1/2 ton per year. As a result, accessing these markets is virtually impossible for small farmers.
- The number of traders standing between a small farmer and the chocolate found on grocery store shelves is exceedingly large. When farmers are able to bring their product to market, middlemen frequently take advantage of them. Unaware of the real value of their crop, due to sparse communication, farmers frequently receive lower than market prices.
- Credit is also a key issue for farmers with seasonal crops like cocoa; outside of the harvest season, producers need loans to address immediate needs and pre-financing for planting and cultivation of their crop.
- Cocoa produced in developing nations have come under scrutiny for using child slave labor to produce cocoa purchased by Western chocolate companies. Most attention on the subject of child labour has focused on West Africa, which collectively supplies nearly 80% of the world's cocoa, and Côte d'Ivoire (Ivory Coast) in particular, which supplies half of the world's cocoa.
- The International Labour Organization and other organizations have reported widespread child slavery on many cocoa farms in the Ivory Coast. In sub-Saharan Africa, 30% of children under age 15 are child laborers, mostly in agricultural activities including cocoa farming.
- The widespread use of children in cocoa production is controversial not only because of the usual concerns about child labor and exploitation, but also because up to 12,000 of the 200,000 children working in Ivory Coast, the world's biggest producer of cocoa , may be victims of human trafficking or slavery .
- Traffickers promise paid work, housing, and education to children who are then forced to labour and undergo severe abuse. It has been reported that some children are held forcibly on farms and work up to 100 hours per week, and attempted escapees are beaten.
- UNICEF's Representative in Côte d'Ivoire, stated in 2007 that children from neighbouring countries such as Burkina Faso, Togo and Mali are brought to Côte d’Ivoire to work in its robust cocoa farming industry, among other outlets for child labour. Their rights are not respected and they are exposed to wide-ranging exploitation and abuse.
Attempting a sustainable economy
- Cocoa sustainability programs are currently underway in Indonesia, Vietnam, and Papua New Guinea in Southeast Asia; in Côte d’Ivoire, Nigeria, Cameroon, Ghana, and Guinea Conakry in West Africa; and in Brazil, Ecuador, Peru, Panama,Mexico, Honduras, Guatemala and Costa Rica in Latin America.
- An initiative, called the Roundtable for a Sustainable Cocoa Economy (RSCE), was developed to face challenges posed by sustainability. Launched in 2007 by the International Cocoa Organization (ICCO) with representation of major stakeholders, the mission of the Roundtable is to establish a participatory and transparent process towards economic, environmental and social sustainability in the global cocoa economy.
- The first Roundtable in 2007 brought together more than 200 stakeholders representing 25 countries, including cocoa farmers, government officials from cocoa producing and consuming countries, traders, chocolate manufacturers, donor organizations and national and international NGOs. The 2nd Roundtable was held in 2009 to continue working towards a sustainable economy.
- In June 2010, cocoa-producing and consuming countries signed a new pact. The International Cocoa Agreement outlined objectives for a more sustainable cocoa economy and measures to improve the transparency of the international cocoa market.
- Efforts are under way to establish an industry-wide voluntary certification process for cocoa produced without the use of child labor. There are challenges facing the efforts that are not yet complete, and there are currently only a few small independent firms claiming to produce chocolate without the use of child labor or human trafficking.
Why Fair Trade?
- Fair Trade has demonstrated it can substantially improve the lives of cocoa producing communities.
- By selling to the Fair Trade market, cocoa farmers have the security that they will receive a Minimum Price which aims to cover their average costs of sustainable production.
- The Fair Trade Minimum Price is paid directly to the producer organizations. When the world market price rises above the Fair Trade Minimum Price, the market price is paid plus the Fair Trade Premium.
- A Fair Trade Premium is paid on top of the purchase price and is used by producer organizations for social and economic investments.
- Pre-harvest lines of credit are given to the cooperatives, if requested, of up to 60% of the purchase price.
- Fair Trade cocoa offers farmers an opportunity to make a real living, as the Fair Trade Standards include a Minimum Price. A Fair Trade Premium is added to the purchase price and is used by cooperatives for social and economic investments such as education, health services, processing equipment and loans to members.
Case Studies – Examples of Fair Trade Premium Use
Kuapa Kokoo Union: Cocoa Growers' Co-operative, Ghana
Kuapa Kokoo’s partnership with Fair Trade is helping develop a strong, democratic institutional framework at all levels of the organisation. With the additional income from Fair Trade premiums, Kuapa Kokoo has been able to improve the livelihoods its members with:
- Dozens of social projects including the provision of wells and bore holes for drinking water, and construction of public toilets
- Mobile health programme visiting members’ villages
- Funding various activities including the construction of two day-care centres, a block of six classrooms and purchase of two mobile cinema vans for a farmers' education programme
- Employment of Development Officers to advise farmers on good agricultural practices, set up training programmes in management and leadership skills, and organise HIV/AIDS workshops
CONACADO, Cocoa Co-operative, Dominican Republic
Extra income from Fair Trade sales has enabled CONACADO to establish or contribute to various agricultural and social programmes that benefit members and their communities:
- Construction of five new fermentation centres, eight new drying centres, and two central warehouses has helped improve the quality of their cocoa. A wormery has been set up to turn waste into organic compost.
- Technical assistance: training courses at different levels for farmers and technicians; quality control; increased yields; organic production programme.
- Education: construction of a new school and contributions to school repairs in five regions plus a community centre and library.
- Health: rural healthcare clinic for a community whose clinic did not meet basic minimum conditions.
- Social: community hall with subsidized canteen; 80 toilets built in members’ houses.
- Income generation: ‘Cocoa Tour’ eco-tourism programme for international visitors to learn about cocoa farming and the impact of Fair Trade. The Women’s Community Group is part of the tour - women from cocoa-growing families have started businesses making cocoa chocolate truffles and community crafts displayed and sold from an artisan hut.
- Bitter chocolate : investigating the dark side of the world's most seductive sweet. Off, C., 2006. Toronto: Random House Canada.
- The way we eat : why our food choices matter. Singer, P. and Mason, J., 2006. Emmaus, Pa.: Rodale.
- Fair Trade, Including: Ten Thousand Villages, Alternative Trading Organization, Divine Chocolate, Caf Direct, Traidcraft, Twin Trading, Jambo. 2011. Hephaestus Books.
- The No-Nonsense Guide to Fair Trade. Ransom, D., 2006.
- Fair Trade: A Beginner's Guide. DeCaralo, J., 2007. Oxford: Oneworld publications.
- The Politics of Fair Trade: A Survey. Warrier, M., 2011. New York: Routeledge.
- Fair trade: the challenges of transforming globalization. Raynolds , L.T., Murray, D., Wilkinson, J., 2007. New York: Routeledge.
- International Cocoa Agreement, 2010 (United Nations Cocoa Conference) Available at: http://www.icco.org/pdf/agree10english.pdf
- The True Story of Chocolate (2nd edition). Coe, S.D., and Coe, M.D., 2007. Thames & Hudson.
- Chocolate in Mesoamerica: A Cultural History of Cacao. McNeil, C. L. (ed), 2009. University Press of Florida.
- Chocolate: A Bittersweet Saga of Dark and Light. Rosenblum, M., 2006. North Point Press.
- Chocolate Nations: Living and Dying for Cocoa in West Africa. Ryan, Órla, 2011. Zed Books.
- BTC Trade for Development: Cocoa, A Level for Development. Martens, H., 2011. Belgium. Available at: http://www.befair.be/sites/default/files/all-files/brochure/Brochure%20c...
Movies and Video
1 “Cocoa” Fair Trade International. n.d. Retrieved from: http://www.fairtrade.net/cocoa.html
2 “Cocoa: Market” United Nations Conference on Trade and Development (UNCTAD) (2009). Retrieved from: http://unctad.org/infocomm/anglais/cocoa/market.htm
3 “Cocoa: Characteristics” United Nations Conference on Trade and Development (UNCTAD) (2009). Retrieved from: http://unctad.org/infocomm/anglais/cocoa/characteristics.htm
4 “Big Chocolate’s Child Slavery Addiction“ in Foreign Policy in Focus. Retrieved from: http://www.fpif.org/articles/big_chocolates_child_slavery_addiction
5 “Prices” . United Nations Conference on Trade and Development (UNCTAD) (2009). Retrieved from: http://unctad.org/infocomm/anglais/cocoa/prices.htm
6 “Prices” . United Nations Conference on Trade and Development (UNCTAD) (2009).
7 “Cocoa” Fair Trade International. n.d. Retrieved from: http://www.fairtrade.net/cocoa.html#c3712
8 “Cocoa” Fair Trade International. n.d. Retrieved from: http://www.fairtrade.net/cocoa.html#c3712
9 “Cocoa” Fair Trade International. n.d. Retrieved from: http://www.fairtrade.net/cocoa.html#c3712
10 "The cocoa market: A background study" (PDF). Oxfam. 2002. Retrieved from: http://www.maketradefair.com/en/assets/english/CocoaStudy.pdf.
11 Hawksley, Humphrey (2 April 2007). "Child cocoa workers still 'exploited'". BBC News. http://news.bbc.co.uk/2/hi/africa/6517695.stm. Retrieved 14 December 2011.
12 “Cocoa” Fair Trade International. n.d. Retrieved from: http://www.fairtrade.net/cocoa.html
13 "Rooting out child labour from cocoa farms: Paper No. 4 Child labour monitoring – A partnership of communities and government". International Labor Organization. 2007. Retrieved from: http://www.ilo.org/ipecinfo/product/viewProduct.do?productId=6444
14 Hawksley, Humphrey (4 May 2001). "Ivory Coast accuses chocolate companies". BBC News. http://news.bbc.co.uk/2/hi/africa/1311982.stm. Retrieved 14 December 2011.
15 "Combatting Child Labour in Cocoa Growing (PDF). International Labor Organization. 2005. Retrieved from: http://www.ilo.org/public//english//standards/ipec/themes/cocoa/download....
16 Raghavan, Sudarsan; Sumana Chatterjee (June 24, 2001). "Slaves feed world's taste for chocolate: Captives common in cocoa farms of Africa". Milwaukee Journal Sentinel. http://www2.jsonline.com/news/nat/jun01/slave24r062301.asp.
17 Chevigny, Blue (14 June 2007). "Child trafficking in Côte d’Ivoire: Efforts under way to reverse a tragic trend". http://www.unicef.org/protection/cotedivoire_39995.html Retrieved 14 Dec 2011.
18 Ibid. Shapiro ,and E.M. Rosenquist, 2004. 61: p.453.
19 Roundtable for a Sustainable Cocoa Economy. Retrieved from: http://www.roundtablecocoa.org/showpage.asp?Reportrsce2
20 Roundtable for a Sustainable Cocoa Economy.
21 “Cocoa” Fair Trade International. n.d. Retrieved from: http://www.fairtrade.net/cocoa.html
22 Payson Center for International Development and Technology Transfer of Tulane University (October 31, 2007). "First annual report: Oversight of public and private initiatives to eliminate the worst forms of child labor in the cocoa sector in Cote d-Ivoire and Ghana" (PDF). http://www.childlabor-payson.org/FirstAnnualReport.pdf.
23 “Cocoa” Fair Trade International. n.d. Retrieved from: http://www.fairtrade.net/cocoa.html
24 “Cocoa” Fair Trade International. n.d. Retrieved from: http://www.fairtrade.net/cocoa.html
25 “Kuapa Kokoo Union: Cocoa Growers' Co-operative, Ghana” The Fair Trade Foundation (2011). Retrieved from: http://www.fairtrade.org.uk/producers/cacao/kuapa_kokoo_union.aspx
26 “CONACADO, Cocoa Co-operative, Dominican Republic” Retrieved from: http://www.fairtrade.org.uk/producers/cacao/conacado_cocoa_cooperative_d...