Cocoa, capitalism & climate change: As chocolate prices surge, so does inequality.
Cocoa prices have skyrocketed reaching $11,000 per metric ton for the first time. This surge comes against the backdrop of unprecedented production shortfalls amid a changing climate. As the International Cocoa Organization warns that the global shortfall could quadruple this year compared to last, is this surge a sign of things to come?
Irregular climate patterns, extreme weather and crop diseases have decimated production yields in Ghana and Ivory Coast, which together account for almost 60% of global cocoa production. Instead of addressing these root causes, chocolate giants have passed the burden onto consumers, raising supermarket prices and protecting their profit margins. This crisis in production has slowly been gaining momentum for years and devastating the livelihoods of cocoa farmers in Ivory Coast and Ghana, leaving almost 60% of cocoa farmers in these countries living in extreme poverty, and up to 90% without a living income.
Since the start of the pandemic, the incomes of Ghanian cocoa farmers have dropped on average by 16%, whilst the profits of the four largest public chocolate corporations have increased by the same rate. 97% of the total net profitsfrom these four companies were paid out to shareholders in 2023, enriching the wealthy whilst those at the bottom of the supply chain lived in poverty.
Oxfam recently announced that the collective fortunes of the Ferrero and Mars families — owners of the two largest private chocolate corporations — surged to $160.9 billion, outsizing the combined GDPs of both Ghana and Ivory Coast.
The explicit disparity and inequality of those at either end of the cocoa supply chain echoes the colonial history of the cocoa trade. Despite the billions reaped in profits by chocolate corporations, the majority of cocoa suppliers are not receiving a living income. This means they are struggling to afford basic necessities such as food, housing, clothing, and medical care.
Not only are these farmers stripped of basic rights but are trapped in a vicious cycle of poverty. Farmers are unable to invest in their farms or the labour needed to produce cocoa, hampering yields and further crippling their income. This situation has also led to an increase in alarming practices of forced labour and child trafficking, along with growing deforestation.
In search of land to increase production, Ivorian farmers are crossing the border into Liberia. According to conservation organization, Global Forest Watch, 150,000 hectares of natural forest in Liberia was lost in 2022 alone. Unfortunately, this process is only likely to accelerate as soil quality, old tree stocks and disease further destabilize bean yields in Ivory Coast.
Soil quality has been degraded in these countries due to practices such as monocultures which are favoured by the profit margins of global corporations. These practices rob soil of any nutrition within 20–30 years and kill off insects that are needed to improve yields. They are not sustainable practices, for the livelihoods of farmers or for our planet and are a key driver of deforestation, speeding up climate change and contributing to a cycle of more extreme weather, lower yields and further unsustainable practices.
Growing monocultures and expending labour on unproductive and unsustainable farming choices is not new; its roots are in the colonial era. Both colonisation and the current market have demanded a focus on cash crops like cocoa instead of food crops. Historically, this has contributed to numerous famines and poor health across colonized nations. It continues today, with a strong disparity between production and consumption, with Ivory Coast and Ghana being the largest exporters of raw cocoa whilst having to net import staple foods such as rice and wheat.
Moving towards a sustainable future
Whilst corporations have recently turned to instituting more sustainable methods, they aren’t investing the money required to fulfil them. These sustainability requirements, paired with ever-decreasing prices has forced farmers to turn to cheaper labour to fulfil demands and offset the costs of more expensive practices, often in the form of forced or child labour. Many other farmers have found they can no longer continue to work in this way and have instead sold their land to illegal miners or turned to ‘galamsey’ — small-scale illegal gold mining which endangers both them and the environment.
Over and over again, we see the health and livelihoods of cocoa farmers, and the environment, paying the cost for cheap cocoa whilst the industry giants shave off billions in profits. We are edging towards a dangerous cycle of environmental degradation and limited yields which we will not be able to return from. The current price explosion could have been avoided if farmers were paid a fair living wage, empowered to make their farms more resilient to environmental changes.
There are alternatives, and there are opportunities to regenerate exploited land, but not without significant investment from chocolate giants, or changes in the ethical choices of consumers. Fairafric in Ghana is improving yields, quality and the diversity of farmers’ incomes through agroforestry. This practice also allows them to capture up to four times the carbon emissions being emitted from their supply chain.
Their work is part of a movement to decolonize the cocoa value chain by processing the chocolate in Africa. Finished chocolate is around five times more valuable than unprocessed beans providing an economic boost for communities. Whilst innovations like Fairafric are taking important steps, these small-scale producers cannot compete with industry heavy-weights without consumer support and conscious decisions to prioritize the health of planet and people over cheap products.
The cocoa crisis demands urgent attention and collective action from all stakeholders. By addressing the root causes of poverty and environmental degradation in the cocoa supply chain, we can pave the way for a more equitable and sustainable industry. This necessitates fair wages for farmers, investments in sustainable farming practices, and a shift towards conscious consumption.
