25 November, 2014

How to save chocolate

cocoa diagram 2
by Harriet Lamb, CEO of Fairtrade International

The looming chocolate shortage is making headlines around the globe. Terrible, nightmarish forecasts predict a dark future – a future in which the chocolate we now enjoy will be expensive as caviar, and the rest of us will have to be content with “chocolate” containing so little cocoa that it actually bends.

How can we prevent this doomsday scenario in which no self-respecting chocoholic would want to exist?

 

In fact there’s a simple solution to this problem. And it starts right at chocolate’s very beginning – on a smallholders’ cocoa farm, most often in West Africa. These small-scale farmers grow 90% of the world’s cocoa. The problem is that, at the end of the harvest, the money smallholders earn is not enough to bring families out of poverty.

 

In one cocoa cooperative in Cote d’Ivoire, 90% of the farmers are illiterate; and they worry that the lack of schools mean their children will scarcely know more. Their cocoa trees are aging and provide fewer cocoa pods. The next generation of cocoa farmers, their children, see the hard work and low pay and want no future in farming. Instead they are drifting to the cities in a pattern repeated across the world. The average age of a cocoa farmer in Ghana is 56.

 

As Cadbury put it simply when they launched Cadbury Dairy Milk with the FAIRTRADE Mark: No beans, no bars – if we don't invest in making cocoa a profitable livelihood, then farmers won’t stay cocoa farmers. You don't need a PhD in Economics from Harvard to work it out: if cocoa farming was profitable, farmers would be investing and their children would see a future on the land. Instead farmers’ share has shrunk and traders, brands and retailers are taking a bigger cut than ever. The report ‘Who’s got the power? Tackling imbalances in agricultural supply chains’ [http://www.fairtrade-advocacy.org/power] released yesterday estimates retailers and branded manufacturers each take 35-40% of the chocolate’s value, leaving the cocoa farmers themselves with just 5%.

 

For years and years chocolate companies have under-invested in cocoa farms, squeezing prices to maximize profits, and now we do indeed have a problem. The good news is that – although it took the looming chocolate shortage to get us here – most of the major chocolate companies have woken up to the fact that business as usual is not an option. They are investing money into new programmes to improve the quality and quantity of cocoa.

 

This is very good. But it’s not quite enough. To prevent a chocolate shortage, farmers need to earn a better income, and they need it now. Unfortunately if you say the words “fair price” in a room full of chocolate CEOs, everyone clams up, shuffles their feet, mumbles about the competition commission and the law of not discussing pricing and then quickly changes the topic. But investing in productivity without addressing pricing is a ticking time-bomb that could seriously backfire.

 

This is the critical next leap that the chocolate sector needs to make. We need to pay farmers more for their cocoa today if we want to keep them farming for tomorrow. Our very chocolate depends on it!

 

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