Conventional cocoa is not sustainable

20 years of voluntary sustainability efforts in the cocoa sector have not shown any success. This is the conclusion drawn by the editors of the Cocoa Barometer 2020. There is also room for improvement in organic cocoa.

Every two years, an international alliance of development policy organizations reports on developments in the cocoa sector, particularly in West Africa, where most of the conventional cocoa beans are grown. Their conclusion: The widespread poverty of cocoa farmers persists, exploitative child labor has increased and deforestation is progresscing. The major players in the cocoa business have been promising for years that they want to improve the situation.

"As long as the chocolate industry is not prepared to pay higher cocoa prices, poverty and human rights violations in the cocoa supply chain cannot be stopped," says Evelyn Bahn of the Inkota Network, which is a member of the alliance. We are talking about prices that must be significantly higher than the previous level for fair trade cocoa. Because the minimum price set by Fair Trade is far from being enough to secure a livelihood, according to the current Cocoa Barometer. Even calculations by Fair Trade International confirm this.

"Knowing how much you should pay, even though you don't pay it, cannot be considered sustainable," the authors of the Cocoa Barometer comment on Fairtrade. Although the various certification systems could easily improve farmers' income, they are not able to lift them out of poverty. In addition, competition between the standards makes it difficult to raise minimum prices, which is urgently needed.

Millions of profit with poverty

Currently, Ghana and the Ivory Coast pay around 1,800 US dollars per ton of beans. Minimum prices of a good 3100 dollars would be necessary. Inkota and other organizations are therefore calling on the federal government to pass an effective supply chain law that obliges companies to respect human rights, which include a living wage.

The authors consider the big cocoa traders and processors such as Barry Callebaut, Nestlé and Mondelez to be responsible for this. In the report they make the following calculation using the example of the Italian family concern Ferrero (Nutella): The family paid itself a dividend of 642 million euros in 2020. In order to pay the estimated 90,000 farmers who grow cocoa for Ferrero a living wage, the company would have to spend EUR 450 million more on the raw material. This would still leave 192 million euros in profit for the Ferrero family. In order to share the distribution of the income together, the farmers would need a place at the negotiating table, demands Isaac Gyamfi, managing director of the Dutch foundation Solidaridad in West Africa.

Organic is only slightly better

Only when the farmers receive prices that secure their livelihoods could the other problems such as child labor and deforestation be addressed, the report says: "In Ghana and Ivory Coast, more than 70 percent of the rainforests have been cleared in the past three decades. In Côte d'Ivoire, 30 to 40 percent of cocoa is illegally grown in nature reserves. Due to poverty, around 1.5 million children still work under exploitative conditions on cocoa plantations in West Africa, according to a recent study commissioned by the US Department of Labor.

Organic cocoa comes mostly from Central and South America, where conditions are better and poverty is lower than in West Africa, where only a few organic and fair cocoa projects exist. Nevertheless, the price paid for organic cocoa can also be lower than the income that secures the livelihood. Studies from the Dominican Republic, for example, suggest this.