Cocoa growing communities, especially those in West Africa, face poverty, child labor and deforestation, which have all been made worse by a rapid fall in prices for cocoa, according to a new report.


“Widely touted efforts in the cocoa industry over the past decade to improve the lives of farmers, communities, and the environment are having little impact,” explains the report, “2018 Cocoa Barometer,” a biennial review of the state of sustainability in the cocoa sector, published by a large, international group of civil society organizations: ABVV-FGTB/Horval (Belgium), FNV (Netherlands), Green America (USA), Hivos (Netherlands), Inkota Netzwerk (Germany), International Labor Rights Forum (USA), Mondiaal FNV (Netherlands), Oxfam (USA, Netherlands, Belgium), Public Eye (Switzerland), Solidaridad (Netherlands), Stop The Traffik (Australia/Netherlands), Südwind Institut (Germany), and The VOICE Network (Global). “In fact, the modest scope of the proposed solutions does not even come close to addressing the scale of the problem.”


Cote d’Ivoire is the world’s largest cocoa producer, and yet the country’s smallholder cocoa farmers—who were already struggling with significant poverty—saw their income from cocoa decline by as much as 36 percent over one year, the report notes. That happened when the world market price for cocoa suffered a steep decline between September 2016 and February 2017—and more than a third of the market value was wiped out, the report notes. Farmers bear the risks of a volatile price, and there is no concerted effort by industry or governments to alleviate even a part of the burden of this income shock, the report continues. 


“This price collapse was caused by overproduction of cocoa in the past years, at the direct expense of native forests. Indeed, more than 90 percent of West Africa’s original forests are gone,” the report explains. “This can be equally attributed to corporate disinterest in the human and environmental effects of the supply of cheap cocoa, and to an almost completely absent government enforcement of environmentally protected areas.”


In addition to often extreme poverty for cocoa farmers, the report also identifies a host of other problems. For example, child labor still remains at very high levels in the cocoa sector, with an estimated 2.1 million children working in cocoa fields in the Ivory Coast and Ghana alone, according to the report. Not a single company or government is anywhere near reaching their commitments of a 70 percent reduction of child labor by 2020, the report notes.


The report also identifies a “broken” market in which farmers have no real influence. While many of the current programs in cocoa focus on technical solutions around improving farming practices, the underlying problems at the root of the issues deal with power and political economy, such as how the market defines price, farmers’ lack of bargaining power, market concentration of multinationals, and a lack of transparency and accountability of both governments and companies, the report continues. 


“As long as poverty, child labor and deforestation are rife in the cocoa sector, chocolate remains a guilty pleasure,” says Antonie Fountain, co-author of the Barometer. “Current approaches will not solve the problem at scale. Companies and governments need to acknowledge the urgency and make changes. Efforts that cover less than 50 percent cannot be called ‘solutions.’”


The report offers several recommendations for action, including: make net income the key metric for all sustainability projects; commit to a sector-wide goal of achieving a living income; commit to a global moratorium on deforestation and focus on agroforestry and reforestation as environmental solutions; move from voluntary to mandatory requirements on human rights as well as on transparency and accountability; and develop sector-wide approaches at scale which address root causes of child labor. One final recommendation is to implement changes which also address issues around power and political economy, not just at technical levels. 


Whether or not your company is part of the cocoa supply chain, what are your thoughts on the sector’s challenges? How do you think companies and governments can drive change?