How Fairtrade Impacts the West African Cocoa Industry | Ask the Expert

Cocoa farmers are terribly underpaid in West Africa. The majority of farmers in Ghana and Côte d’Ivoire, where more than 60% of the world's cocoa comes from, earn less than 0.67 euros a day - an income far below the international poverty line. We interviewed Anne-Marie Yao, Regional Cocoa Manager at Fairtrade Africa and Nicolas Lambert, director of Fairtrade Belgium, to learn more about the conditions cocoa farmers face and the impact of Fairtrade on the cocoa industry.

Nicolas Lambert, director of Fairtrade Belgium, and Anne-Marie Yao, Regional Cocoa Manager at Fairtrade Africa. Credit: Julia M. Free

1. Can you describe the average working day of a West African cocoa farmer?

Anne-Marie Yao: 'The day starts early for cocoa farmers and their families. At around 6 a.m., everyone gets up and has breakfast. Both mother and father then walk from the village to the cocoa field, which can take an hour. At 8 a.m., they start working in the fields until about 4 p.m. Children who go to school come and help their families later in the day.'

'In 2017, I started a cocoa farm myself, on about 3 hectares of land. I can assure you that the work is gruelling. You're working in the fields under the scorching sun. The temperature starts rising from the early morning, reaching around 37°C. Cocoa plants also need a lot of care and attention. When you start a cocoa farm, it takes 2 years for the plants to start growing cocoa pods that you can harvest. You then have to process the pods further before selling them as cocoa beans. So, it takes 2 years before you start making any money. Until that time, you have to make ends meet with another source of income. My first harvest will be in the autumn of 2019 - until then, I only have expenses. But fortunately, I earn money by working for Fairtrade.'

2. What are the main differences between a regular African cocoa farmer and one who produces cocoa for Fairtrade chocolate?

Nicolas Lambert: 'The difference lies mainly in the support that farmers who work in Fairtrade certified organisations get from the cooperative they joined. They receive training and can split costs and expenses, such as trucks, agricultural equipment and storage space. Being in a group gives them more negotiating power. These farmers can offer guarantees to buyers in terms of both quantity and quality, which allows them to negotiate better contracts.'

Anne-Marie: 'The farmers in a cooperative can learn from one another and share best practices, for instance, when it comes to fertiliser use. The work is still very hard, but at least farmers who work in Fairtrade-certified organisations are not alone. In addition, they get a guaranteed minimum price for their cocoa beans and an extra premium. The price of a tonne of cocoa beans is very volatile, so it's an advantage for these farmers to be able to count on a fixed minimum price for their cocoa beans when the market price is too low. With the premium, they can invest in additional resources for their plantations.'

Nicolas: 'Studies show that only 6% of the price of a bar of chocolate goes to the cocoa farmer in West Africa. While in the 1980s, that was still 16%. A lot of value is created in the chocolate chain, but it's clearly not being distributed equally.'

Read more about how the Fairtrade system works.

3. If I buy Fairtrade chocolate from Ghana or Côte d’Ivoire, can I assume that these cocoa farmers are earning a living income?

Anne-Marie: “Absolutely not. The price they get only just covers the production cost. Even in the Fairtrade system, African cocoa farmers still aren't making a decent living income – far from it. There's a huge gap between what they earn and what they have to invest. A living income not only means that you can put food on the table and provide for your family's most basic needs, but also that you can invest in your farm to ultimately ensure proper housing, clothing, medical care, schooling and transport, while leaving a small financial buffer to cover illness or accidents. At present, many farmers and their families sleep on the floor, have a very monotonous diet, and eat only one meal a day. They're really living below the poverty line. Yes, they can build a well or a school, but they still live in poverty. And those are the 'lucky' fair-trade farmers.'

Nicholas: 'Another problem is that these farmers typically only sell half of their cocoa production under Fairtrade conditions. Simply put, there are way more farmers who produce Fairtrade cocoa than the current worldwide demand for Fairtrade cocoa can sustain. So they only get the Fairtrade benefits for a small part of their production and have to sell the rest at a lower price. That's why we focus so much on raising awareness, to increase demand for Fairtrade chocolate.'

'We have also re-evaluated our minimum price. We realised that the compensation was not enough to earn a living income. Until September 2019, it amounted to 2000 USD plus a premium of 200 USD. Our current compensation is a minimum price of 2,400 USD plus a premium of  240 USD for a tonne of cocoa beans. If we were to raise that to 3,000 USD tomorrow, we would instantly price ourselves out of the market. Traders would no longer want to buy cocoa at the fair-trade price. We'd lose our impact. So figuring out what that minimum price should be is a complex balancing act, involving both producers and other stakeholders, like traders.'

'In addition to the new minimum price, we've also calculated a reference price. This is the amount that should provide a living income under sufficient production. That reference price is around 3,000 USD.'

'If we want to keep eating chocolate in the future, we need to pay farmers a higher price for their cocoa beans'

'If we want to keep eating chocolate in the future, the whole sector will have to accept a higher price per tonne. It's an illusion that farmers could ever earn a living income if they don't get a fair price for their product. But for many chocolate companies, unfortunately, this is still a taboo.'

Read about the advantages and limitations of the Fairtrade system.

4. Why is Fairtrade Africa focusing specifically on empowering women?

Anne-Marie: 'Much of the work in the fields is carried out by women. They should be given more opportunities to become landowners. In addition, women tend to focus much more on the well-being of their families. The mother looks after the family; she's the first to get up in the morning and the last to go to bed. If women can also become entrepreneurs in the cocoa industry, they can help determine how investments are made. Because they tend to take other things into consideration. In the programme, we've started to have women fill leadership positions, and we already see change happening. They use the money left over from their production to send their children to school. Women are doing what's necessary to develop the industry and to close the gender gap.'

5. If you look at an average bar of chocolate, say, from a supermarket's own brand, it doesn't say on the packaging whether the cocoa comes from Africa or Latin America. Why is that?

Nicholas: 'It's the chocolate producers who decide whether they want the label to mention where the cocoa comes from. Those who want to emphasise the specific quality of their product will tend to put the country of origin on the label, as is often the case for coffee. When it's a more mainstream product, there's less inclination to do so. Or maybe the brand is more important than the origin of the product. Some brands choose to focus on other things than origin. Tony Chocolonely, for example, a Dutch brand, is specifically committed to reducing child and slave labour in Africa. So obviously, they're going to highlight where their cocoa is produced and under what circumstances.'

'Our own focus is more on fair production than on the distinction of cocoa originating from Africa or South America. However, in one of our recent campaigns, the emphasis was on Africa because farmers there have it particularly rough. We see that the origin is more often mentioned if the cocoa is from Latin America. But bulk cocoa - the kind you’d find in popular chocolate brands - is more typically from Africa. The more specialised varieties, including 'high flavour' or organic cocoa, tend to come from Latin America. Farmers often have more resources there. I hope we can change things in Africa so that farmers there can produce more than just basic cocoa for candy bars but higher-quality cocoa as well. That would enable them to get a better price. After all, as you differentiate your product, it becomes more valuable. But that's something that will take time. Ultimately, we want all farmers from every corner of the world to earn a living income.' 

6. How do you get more people to buy fair-trade products?

Anne-Marie: 'We try to make consumers more aware of the importance of fair trade by revealing the conditions that farmers are forced to live in. As a consumer, you have to realise that you have the power. Your decision to purchase one product over the other can be a choice for more justice and fair trade. By buying their products, you're letting these farmers know that they're not alone. You're sending a message that there are people in the world who value and recognise their great efforts.'

'To enhance that sense of recognition, we need to form direct relationships between producers and consumers. A village in Europe could partner up with a village in Africa, for instance. There could be exchange programmes to understand what life as a cocoa farmer is like. And it goes both ways: producers will handle their product with even more care if they know who they're doing it for. They'll focus even more on quality. So we need to pay more attention to that human relationship and put a human face on the product we're paying for. That way, you know who the extra money goes to and what it's used for.' 

The author originally wrote this piece in October 2018 for the Belgian outlet Eos Tracé. Read the piece in Dutch here.

We have updated this piece to the current situation.