Cocoa Industry needs Sustainable Development Badly

The recently concluded “World Cocoa Conference” in Berlin saw stakeholders issuing a declaration to coordinate efforts to stamp out exploitation and environmental degradation in cocoa.

Partly driven by concerns about future cocoa supplies, chocolate companies and trading firms poured large investments into distributing high-yielding seeds and training farmers on better practices in a bid to help them improve their output.

Yet, as a sharp surge in production last season drove prices to their lowest in more than nine years, this approach to alleviating poverty came under fire from critics who say it is contributing to the glut.

The decline in world cocoa prices has only worsened the plight of farmers, slashing their earnings by about 30 percent on average.

Sustainable certification – designed to ensure more ethical practices and better earnings – has also fallen short as the premiums farmers receive under the biggest of these schemes have been falling.

To make cocoa sustainable, the industry must shift away from a “selfish” focus on ensuring supplies and towards promoting crop diversity.

Cocoa industry needs professionalised farms, with diversity of income as well as ensuring that they do not over-produce cocoa and then find themselves in the mess that they are at the moment. Chocolate makers and processors must also ensure they are paying a fair price to farmers, who currently command only 6 percent of the $100 billion value chain.

The drop in global prices led to $3.5 billion in savings for chocolate companies in 2017, yet none of it made its way to cocoa growers. Meanwhile, producing countries such as Ivory Coast and Ghana must coordinate their policies and take steps to cap production at sustainable levels.