Protect cocoa farmers with supply chain regulations

The call for supply chain laws is getting louder. A recent study on cocoa cultivation shows that voluntary commitments by the food industry are not sufficient. Even Fairtrade certification is not enough to provide farmers with a livelihood.

Commissioned by the development organization Inkota, Friedel Hütz-Adams, research assistant at the Südwind-Institut analysed the current situation. His result: The cocoa and chocolate industry is inadequately implementing the UN requirements on human rights due diligence in its supply chains. Despite voluntary initiatives of some companies, explitative child labour, bitter poverty and violations of labour rights continue to be part of everyday life in cocoa cultivation, shows the study.

Organic cocoa farmers affected

This does not only apply to conventional industry. Although there are indications that the situation of organic cocoa farming is better than with conventional cocoa, Hütz-Adams points out that one must not be mistaken, that many producers of organic cocoa also have to live under very difficult circumstances. He refers to another study from 2013 that examines the situation in the Dominican Republic, where cocoa is almost exclusively farmed organic. That study shows the poverty of farmers in organic cocoa farms.

Prices for organic cocoa too low

Despite significantly higher prices in comparison to conventional cocoa, it is not enough. The study explains that although the surcharges for organic cocoa might look promising, the additional costs of organic production, such as fees for certification, have to be taken into account. Additionally, the harvest is lower.

5 cents more per bar double the income

Hütz-Adams’ calculation for West Africa show that following the living incomes for the Côte d’Ivoire and Ghana last year, the families have less than half of what would have provided for their existence. And this even though a truly fair price for Western European consumers would be quite reasonable. According to Hütz-Adams, doubling the price of cocoa would cost around five cents more for a bar of milk chocolate. The example refers to conventional chocolate for a selling price of 89 Euro cents per 100 gram and a (fair trade) purchase price of 2,400 US dollars per ton of cocoa.

Supply chain law to improve situation

The scientist has joined the demand for supply chain laws. Then cocoa and chocolate, which are found to infringe human and labour rights in the supply chain, would no longer be imported into the European Union and would have to be withdrawn from the market. Company would therefore be forced to ensure a fair supply chain.

Certifications disguise bad circumstances

A fair supply chain is not guaranteed even for Fairtrade products and products with a UTZ/Rainforest Alliance seal. Even certified cocoa is often not sustainable. The repeatedly uncovered scandals demonstrate that the risk of human rights violations continues to exist even in certified farms, shows Hütz-Adams. Moreover, he points out that the incomes of most certified farmers are so low that they are not in a position to establish a sustainable cocoa production.

Upon enquiry, Fairtrade refers to its own press release, according to which the Fairtrade price for one ton of cocoa is USD 2,400 in Côte d’Ivoire. Too little, if you look at the figures of the study.

Gepa pays more than Fairtrade

Too little for Gepa as well. The company’s cocoa and chocolate-based products have not carried an external Fairtrade seal for several years now. According to Managing Director Peter Schaumberger, this is because they want to make clear that Gepa as a pioneer goes well beyond the standards of private standard providers such as Fairtrade International and Ecocert. While the company’s cocoa-based products bear a Fairtrade seal, but the minimum price for Fairtrade International for cocoa is too low: Last year, Gepa paid its West African partner cooperatives a price of around 3,000 Euros, around 3,400 converted with the exchange rate at the time. That is more than 40 percent above Fairtrade level, says Schaumberger.

Increasing political pressure

Gepa and its shareholders Misereor and Brot für die Welt (bread for the world) are involved in the initiative for a supply chain law. This association of non-governmental organisations and companies aims to increase political pressure so that a suitable supply chain law can be passed before the end of this legislative period. This would also have consequences for the organic sector – not only in the case of chocolate. And not only in the case of products from overseas. Even organic vegetables from Spain could be problematic.

Nevertheless, the topic is also being discussed at EU level. Sven Giegold, Green European politician and member of the Committee on Economic and Monetary Affairs of the European Parliament, is one of those who urgently demand a supply chain law for all sector. He knows the supporters – and who slow the process. According to him, France is more progressive than others, the Netherlands are interested, Germany is always on the brakes. The opponents in this country would mainly come from the Union’s camp.

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