23rd September 2011

Fairtrade cocoa and a sustainable chocolate industry

Fairtrade and Cocoa commodity briefingThe Fairtrade Foundation recently pubished a useful "commodity briefing" on Fairtrade and Cocoa, combining a clear and succinct overview of the global cocoa industry with a case for why Fairtrade is needed.

The broad picture it paints is one of growing global demand for chocolate, driven by rising incomes in emerging economies, increasingly outstripping available cocoa supplies. In West Africa, the productivity of cocoa farming is low, with a lack of access to finance and technology, outdated farming methods, and no incentives to improve depleted soil or replace ageing trees.

Cocoa farmers in West Africa are likely to receive 3.5 to 6.4 per cent of the value of a chocolate bar, compared with around 16 per cent in the 1980s. Over the same period, the manufacturers' share has increased from 56 to 70 per cent and the retailers' from 12 to 17 per cent. Often their children can see no future in cocoa: the average age of a cocoa farmer in West Africa is 51 years.

In response, chocolate companies and industry bodies have set up more than sixty projects to address supply chain sustainability. These are mainly focused on training cocoa farmers to increase production and improve quality.

The briefing argues rightly that sustainability "means more than just increasing production,it also means ensuring that farmers are able to capture a greater share of the value of the industry overall". Smallholder farmers need to be able to make a living and their children need to see a viable future in the industry.

This week is actually the 10-year anniversary of the signing of the Harkin-Engel Protocol – a voluntary agreement by most of the big chocolate companies to put an end to forced child labour on cocoa farms in Ghana and Cote d’Ivoire.

The authoritative Tulane University studies overseeing these efforts over the last decade conclude that though there has been action from the chocolate industry and “significant evidence of impact”, industry funding has simply not been sufficient to achieve the goal of eliminating the worst forms of child labour.

In Trading Visions' Chocolate Scorecard 2011, we survey the chocolate industry's investments in a sustainable supply chain and come to a similar conclusion:

There are encouraging signs that chocolate companies, big and small, are taking significant steps towards sustainable business practices and a more equitable chocolate supply chain. Yet it is clear from this scorecard that they could be doing much more. In particular, the industry giants are only sharing crumbs from the table. It’s time to scale up.

- Trading Visions, Chocolate Scorecard 2011

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