The sweet bitter truth on cocoa

Africa supplies 76 percent of world’s cocoa. West Africa alone cumulatively supplies two thirds of the global cocoa, as Ivory Coast leads the pack with 1.65 million tonnes. This is followed by Ghana, Nigeria, Cameroon and Togo which altogether produce 1.55 million tonnes. Cocoa is also grown in Sierra Leone, Uganda, Tanzania, Madagascar, Equatorial Guinea, Liberia and Sao Tome & Principe. while about 76 per cent of total cocoa produced is from Africa, less than five per cent of the wealth in the value chain is retained in the continent.

The Organisation for Economic Cooperation and Development (OECD) says the crop’s by-products are consumed mainly in industrialised countries, with major buyers being the chocolate processing and confectionary industry. Exporters of raw cocoa get approximately $10 billion a year, but the total annual value of chocolates, all made from cocoa, is over $100 billion, according to Olusegun Aganga, Nigeria’s immediate past minister for industry, trade and investment. Aganga explained at the Nigerian Cocoa Value Addition Summit in 2014 that the total value of all finished goods made from cocoa is estimated to be as high as $200 billion a year. Africa is missing in this big market. Many African cocoa producers have failed to emulate Brazil and Malaysia, where the local processing industry absorbs most of the production.

Forbes conducted a search for the ten world’s biggest chocolate consumers. No African country is on the list. Countries on the list include Switzerland, Germany, Ireland, the United Kingdom and Norway. Others are Sweden Australia, the Netherlands, the United States and France. It is instructive that the production plants of major candy and chocolate makers, which depend on cocoa from Africa for production, are all outside Africa. Amano Artisan, Askinosie, Biommer, Castronovo, Equal Exchange, Guittard, Mars, Mast Brothers, among many others are in the United States. Others such as Domori, Bonnat, Barry Callebaut, Hachez, Haigh’s, Royce, Thorntons, among hundreds of others, are scattered around Europe, Australia and Asia.

Cocoa Capitalism

Cocoa is crucial to the Ivory Coast's economy and is mainly grown around the deep green and undulating lands in the south, centre and west of the country. These areas help the country produce around 40% of the world's entire cocoa supply, and the crop is responsible for 15% of the Ivory Coast's GDP, 20% of its tax revenue, and 35% of its exports. Ivorian cocoa typically ends up at ports like Amsterdam - the biggest cocoa harbour in the world.

The idea that millions of young children are being trafficked, enslaved, and forced to work 16-hour days in dire conditions makes for dramatic and emotive story, and one that campaigners can easily rally around. The concept of inequitable state pricing, misguided economic policies and distorted value chains makes for a much less rousing tale. However, while the former is thankfully a myth, it is the latter that is all too real. There is no shortage of problems within the Ivory Coast's cocoa industry. But despite the headlines, child slavery doesn't seem to be one of them.

Child labour has been a staple of Western campaigners in recent years. In late 2012, for example, this website published an article citing estimates that some 1.8 million child labourers are working in Ghana and the Ivory Coast as well as a US Department of State guesstimate that over 100,000 children are working under "the worst forms of child labour" on Ivorian farms. Meanwhile the Dutch journalist-turned-activist-turned-ethical-chocolatier Teun van de Keuken has claimed there are 460,000 people "working in conditions that have been declared illegal" in West Africa. Figures citing hundreds of thousands of child slaves make for sensations headlines, but they don't chime with the reality.

A 2013 background paper on forced labour and trafficking in Africa, the International Labour Organisation explained that "there are many clear examples where the assumption of forced labour has proved wrong. This is especially the case with cocoa production." The paper cites a range of studies that have disproven the idea of large numbers of child slaves and of widespread exploitation in West African cocoa fields, concluding that "an absence of good quality, accurate, empirical data has allowed for the perpetuation of sensationalist and often misplaced claims."

The Ivory Coast's cocoa industry is wrought with problems, most of which can be traced back to its hasty, ill-considered and poorly executed liberalisation in the late 1990s. Before then, the industry had been regulated by the Caisse de stabilisation et de soutien des prix des productions agricoles, more commonly known as Caistab.

Caistab was a state agency that offered farmers a guaranteed market at set prices. The organisation facilitated the buying and selling of the crop and removed many of the risks and uncertainties associated with cocoa farming. However, Caistab also worked to siphon illicit extra funds into the pockets of the ruling party and its leader Félix Houphouët-Boigny. It was partly this corruption that led the World Bank and International Monetary Fund to call for its abolition. Ivory Coast eventually acceded to its wishes.

Liberalising the industry, however, proved to be a hugely problematic. The cocoa industry disintegrated into a large number of cooperatives and private operators; government oversight and management of the sector lost its coherence as it fractured into various smaller bodies; and a few large multinational buyers were able to use their financial leverage to muscle in on the hitherto protected market and gain a stranglehold on exports.  Prices plummeted to the point that growing and selling cocoa sometimes cost them money.

With cocoa prices differing between neighbouring producers, particularly Ivory Coast and Ghana, many exporters try to get higher profits by smuggling crops across the border. The amount smuggled can be as high as hundreds of thousands of tonnes each year, leading to significant losses in tax revenues for the Ivorian or Ghanaian governments.

Furthermore, the new system hardly rooted out opportunities for corruption. In fact, one could argue that it deepened and intensified it, with vast amounts of embezzled cocoa revenues being used to fund the country's civil war in the mid-2000s. Farmers claim they are still extorted, over-taxed and short-changed by the current system. "With Caistab we had to support a director, his family, his home, his car, his mistress and so on," says one farmer from Sikensi. "With the new system in place, we've got to support four of five of these."

From a report by Bram Posthumus, an independent press and radio journalist with more than 20 years of experience living and working in West and Southern Africa.

cocoa cop-out

Socialist Banner have previously reported here on the child exploitaion in the cocoa producing regions and another news item reveal little has changed .

Despite the international outcry in 2000 over child exploitation on West African cocoa farms, and efforts by governments since then to regulate the industry, very little has changed for an estimated 284,000 child labourers, according to campaign groups. Ghana and Côte d'Ivoire produce about three-quarters of the world's cocoa and according to the US State Department, they employ 200,000 children. Up to 12,000 of these children have been illegally trafficked across African borders to work on Ivorian cocoa farms, according to the NGO Stop the Traffik. Many of these children are forced to work in dangerous conditions, on slave-labour wages or for nothing in order to put chocolate into the mouths of consumers .

In 2001 nine West African governments came to a voluntary agreement with the US government known as the Harkin-Engel protocol (named after the two US senators who passed it), which aimed to decrease the number of children working on farms, improve working conditions, and certify that half of the cocoa produced in West Africa would be free of exploitative child labour by 2005. But according a spokesperson for industry association International Cocoa Initiative , delays - due to conflict in the case of Côte d'Ivoire, and other burdens on resources elsewhere - meant the deadline was postponed to 2008.

"Now the industry needs to put its money where its mouth is, to get West African children off farms and back into school where they belong," said Aidan McQuade, director of Anti-Slavery International, another NGO.

But Eileen Maybin, spokesperson for the Fairtrade Foundation :

"Cocoa certification is a 'band-aid' policy - it is attempting to address the problem of child labour without addressing the underlying cause, which is low cocoa prices...Unless chocolate manufacturers are willing to pay more for their cocoa, these poor conditions on farms will persist."

The Harkin-Engel initiative is funded by governments and cocoa manufacturers, but critics say it has not provided enough money to address the root causes of the problem: that poverty drives farmers to exploit children.

It is the capitalist market that decides how humanitarian the degree of exploitation will be .

Cocoa wars

First came "blood diamonds" from Sierra Leone.

Then came "blood timber" from Liberia.

Now another West African conflict is being funded by yet another commodity beloved in the West: " blood chocolate." from Ivory Coast

Government and rebel leaders of the world's leading cocoa exporter, Ivory Coast, both siphoned off millions of dollars from the cocoa industry to finance the 2002-03 civil war that divided the once-stable and prosperous country in two, according to a recent report from Global Witness, a London-based group that focuses on resource-fueled corruption. The government received more than $58 million from institutions and cocoa revenues, while the rebel New Forces pocketed about $30 million since 2004 in taxes and revenues, claims the report titled "Hot Chocolate: How Cocoa fuelled the conflict in Côte d'Ivoire." Global Witness not only contends the cocoa trade drove the war economy but that the industry still serves the interests of both the government and the rebels who have reaped political and economic benefits with impunity.

Ivory Coast is the world's leading producer of the commodity, responsible for about 40 percent of global exports, which earned more than $1 billion in 2006.