Ghana and Ivory Coast attempt to raise farmers’ incomes as cocoa industry fails to clean up its act

Monday, September 30th, 2019

West African nations have announced a series of measures to raise the price of cocoa in order to lift farmers out of poverty, which has been linked to persistent child labour and illegal deforestation following years of unmet pledges by the industry.

In recent months Ivory Coast and Ghana, which together produce two thirds of the world’s cocoa, have adopted measures to alleviate poverty among cocoa growers in their countries. In June, the two nations said they would suspend sales of cocoa for less than $2,600 a tonne for the 2020/2021 season.

In July they introduced a Living Income Differential of $400 a tonne to be added to the price of cocoa. In September, to discourage overproduction and maintain higher prices, the two countries announced mechanisms to set production ceilings.

Ghana and Ivory Coast have expressed the need to balance cocoa farmers’ incomes with the profits made by large commodity traders and consumer goods manufacturers.

Industry players were initially sceptical of the moves arguing they could lead to the search for alternative sources of cocoa, before expressing their support.

These developments come on the heels of a June exposé by The Washington Post that revealed that cocoa production in Ivory Coast remains rife with illegal child labour and trafficking despite years of pledges made by the industry to clean up its act. The authors concluded that “the odds are substantial that a chocolate bar bought in the United States is the product of child labor.” A similar situation is likely in Europe, since global commodity markets are served by the same giant traders.

It is estimated that up to 2.1 million children work in exploitative and hazardous conditions in cocoa fields in Ivory Coast and Ghana. A 2018 study concluded that this situation is largely driven by the high poverty levels among cocoa farmers that the new pricing policies in Ghana and Ivory Coast are designed to reduce. The Post’s investigation provides a vivid account of children as young as 10 being regularly bused from Burkina Faso to cocoa farms in Ivory Coast by “bosses” who take a cut on the children’s labour.

In 2001 some of the largest chocolate companies – including Nestlé USA, Mars and Hershey – pledged to eradicate child labour from their West African suppliers in a bid to avoid binding regulatory action by the US congress. Since then, several deadlines to achieve that goal have been missed. The current – watered down – pledge is to reduce child labour by 70% by next year. This too looks likely to fail according to industry officials.

One of the reasons cited by The Post for this failure is that firms – including Hershey, Mars and Nestlé – still only trace a minority of their cocoa back to farms, making it impossible to engage with non-compliant growers. A reported lack of will and the absence of any consequences for the industry have precluded decisive action to transform the supply chains of the largest cocoa traders and consumer goods manufacturers.

In July, US senators Sherrod Brown and Ron Wyden called on the US Customs and Border Protections (CBP) to enforce the US Tariff Act and block the import of cocoa made with forced labour.

The failures of the chocolate industry are not limited to child labour. A report published by Mighty Earth in December revealed that more than half of Ivorian protected forest areas had showed an increased in their rates of deforestation since late 2017, when a commitment by the industry to end deforestation linked to the production of cocoa was penned. In 2018, around 14,00 hectares of forests were cleared in Ivory Coast’s southwest cocoa heartland.

Mighty Earth found that “farmers who engaged in deforestation for cocoa were still able to openly sell their cocoa without repercussions.” The conservation NGO identified several cases of illegal deforestation by cocoa farmers within protected areas, including at the Cavally Forest Reserve, Goin Debé classified forest and Mount Péko National Park in Ivory Coast. Mighty Earth blamed a lack of supplier monitoring by the largest buyers, such as Cargill.

Earlier this year Earthsight research found that rising illegal deforestation for cocoa in Nigeria was likely being driven by an increase in EU imports of the commodity from the country.

Campaigners have often condemned voluntary commitments and industry certification schemes as woefully insufficient to protect forests, workers and communities. The evidence of persistent child labour and illegal deforestation in cocoa supply chains – despite nearly 20 years of pledges made by the industry – provides support to such criticism.

As The Washington Post’s exposé makes clear, industry bosses knew from the start that their firms were never going to meet the goals set out in 2001. They also reportedly engaged in cynical manipulation of the agreement’s targets in desperate attempts to continue to avoid legislative action.

Even the industry-backed Tropical Forest Alliance has called for government action in consuming countries to regulate and ban imports of commodities linked to human rights violations and deforestation.

A European Commission Communication on “Stepping Up EU Action to Protect the World’s Forests,” published in late July has been criticised for downplaying these concerns. The plan mostly supports the continuity of voluntary action by companies and merely pledges to assess options for much needed legally-binding regulations campaigners say are required.

Image credit: Creative Commons.