Chocolate: Sweet treat but for cocoa farmers, business is bitter


By AGENCY
While demand for chocolate is high all year round, conditions for farmers remain poor. Photo: Monika Skolimowska/dpa-Zentralbild/dpa

From Valentine's Day through Easter to Christmas, the calendar is packed with chances to enjoy chocolate.

Plus, amid the pandemic, many people are finding comfort in a bar or two.

Sales of chocolate slumped slightly when the coronavirus first broke out, but last year production and sales grew.

But it is still a bitter business for cocoa farmers.

Annual sales of chocolate products reach US$130bil (RM544bil), according to estimates. However, farmers only take home 7.3% of that and their earnings are shrinking.

In October, the price of cocoa in West Africa fell by 18.5%. In order for people to live from the business, it would need to be 50% higher.

But prices are likely to keep falling while poverty will continue to increase, according to the Cacao Barometer, an industry report produced by the Federation of Non-Governmental Organizations and Trade Unions in the Cocoa Market, based in the Netherlands.

Amsterdam is the world's largest cocoa port, handling about 25% of global production.

Progress has been made over the past two decades to help farmers, fight deforestation and eradicate child labour, with quality labels, certificates, Fairtrade producers and cocoa platforms all supporting sustainable production.

Those efforts have achieved little success however.

Annual sales of chocolate products reach US$130bil (RM544bil), according to estimates, but farmers only take home 7.3% of that and their earnings are shrinking. Photo: Alex Duval/dpa
Annual sales of chocolate products reach US$130bil (RM544bil), according to estimates, but farmers only take home 7.3% of that and their earnings are shrinking. Photo: Alex Duval/dpa

"The conventional aid programmes don't help," Yuca Waarts, a Wageningen Agricultural University researcher, told dpa.

Waarts recently authored a study on cocoa farmers' incomes. More than 60% of the world's total cocoa production of almost five million tonnes a year comes from Ghana and Ivory Coast.

Yet 75% of cocoa farmers in these countries do not earn a living wage, meaning they lack the money they need for food, housing, education and health care.

The trouble is that cocoa production has more than doubled over the past 30 years, says Waarts. That overproduction led prices and incomes to plummet.

But only raising the prices will not do, her study found.

The governments of Ivory Coast and Ghana already pay farmers a supplement to shore up their income, but that is not enough.

Even if prices doubled, only about 41% of the farmers would earn enough to send their children to school, for example, instead of to work on the cocoa fields.

Many farmers are working on very small fields that yield too little, says Waarts.

Faitrade producers do pay their farmers a fair price, but that only helps those who have sufficient acreage.

Plus, the Fairtrade share of world trade is still small, at around 17% in Germany, for example.

"Increasing the market price is only part of the solution," says Waarts, adding that the market should be regulated.

Oil production is a prime example of a regulated market, the expert says, calling for a form of cocoa OPEC, to steer production and pricing.

Further measures would include ensuring cultivation areas are large enough and a social safety net is in place.

Amsterdam-based chocolate producer Tony's Chocolonely is now one of the leading chocolate companies in the Netherlands, thanks to its messaging on fair trade chocolate that is 100% slave free. With a 17% market share, it is number two in the rankings.

Tony's pays its approximately 9,000 farmers between 30% and 40% more than conventional traders.

"That has brought 72% of our farmers in Ghana out of poverty," says Belinda Borck of the company.Also, only 3.9% of its farmers use child labour, down from 50% for conventional traders.

Tony's Chocolonely also only trades with cooperatives that strengthen the productivity of individual farmers.

The chocolate maker now wants to turn the international market around and seeks partnerships in its "open supply chain".

Wholesalers such as the German Aldi supermarket chain, the Jokolade company, Dutch producer Delicata and the Albert Heijn supermarket chain already buy beans at a fair price.

All that has made business sweet for the Dutch company. Turnover reached well over €100mil (RM473mil) for the first time in 2020, up 24% on the previous year. – dpa

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