In fact there’s a simple solution to this problem. It starts at chocolate’s very beginnings – on smallholders’ cocoa farms, most often in West Africa. These small-scale farmers grow 90% of the world’s cocoa. The problem is that at the end of the harvest, the money smallholders earn is not enough to bring families out of poverty.
In one cocoa co-operative in Ivory Coast, 90% of the farmers are illiterate; and they worry that the lack of schools mean their children will scarcely be in a better position. Their cocoa trees are aging and provide fewer cocoa pods. Their children – the next generation of cocoa farmers – see the hard work and low pay and do not want a future in farming. Instead they are drifting to the cities in a pattern repeated across the world. The average age of a cocoa farmer in Ghana is 56.
If we don’t invest in making cocoa a profitable livelihood, then farmers won’t stay as cocoa farmers. You don’t need a PhD in Economics from Harvard to work out that if cocoa farming was profitable, farmers would be investing and their children would see a future on the land. Instead the farmers’ share has shrunk and traders, brands and retailers are taking a bigger cut than ever. The report released last November, Who’s got the Power? Tackling imbalances in agricultural supply chains, estimates retailers and branded manufacturers each take 35-40% of the chocolate’s value, leaving the cocoa farmers themselves with just 5%.
For years, chocolate companies have under invested in cocoa farms, squeezing prices to maximize profits, and now we do indeed have a problem. The good news is that although it took the looming chocolate shortage to get us here, most of the major chocolate companies have woken up to the fact that business as usual is not an option. They are investing money into new programmes to improve the quality and quantity of cocoa.
This is very good, but it’s not quite enough. To prevent a chocolate shortage, farmers need to earn a better income now. Unfortunately, if you say the words “fair price” in a room full of chocolate CEOs, everyone clams up, shuffles their feet, mumbles about the competition commission and the law of not discussing pricing and then quickly changes the topic. Yet investing in productivity without addressing pricing is a ticking time-bomb that could seriously backfire.
This is the critical next leap that the chocolate sector needs to make. We need to pay farmers more for their cocoa today if we want to keep them farming for tomorrow. Our very chocolate depends on it.
Harriet Lamb is the CEO of Fairtrade International