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The producers fail to keep their promises to improve the wages of the farmers who grow cocoa in Ghana and Ivory Coast, two of the main producing countries
There is a paradox writ large in the chocolate industry, which includes cocoa farmers, traders, producers, and other intermediaries. Amongst the group, chocolate companies see their profits soar. But farmers, who are the primary and most important component in the chain, are at the receiving end. The producers fail to keep their promises to improve the wages of the farmers who grow cocoa in Ghana and Ivory Coast, two of the main producing countries.
In a report published, the international NGO Oxfam said earnings for US companies Hershey, Mars, and Mondelez in addition to Italy’s Ferrero and Swiss peers Lindt & Spruengli and Nestle had increased since the onset of the pandemic in 2020.
The world’s four largest public chocolate corporations, such as Hershey, Lindt, Mondelēz, and Nestlévan averaged a 16% increase since 2020. Because of the higher profits, the chocolate companies paid out on average more than their total net profits, 113%, to shareholders between 2020 and 2022.
The Oxfam survey of more than 400 cocoa farmers in Ghana — the second-largest global producer of the commodity — found their net incomes had fallen by an average of 16% during the same period. The drop in income was particularly skewed in the case of women workers at cocoa farms, with a decline of 22%. According to the OXFAM survey, close to 90% of Ghanaian cocoa farmers do not earn a living income. Many of the 800,000 farmers in the country survive on just US$2 a day. Another finding of the report was that while Ghana produces about 15% of the world’s beans, it receives only about 1.5% of the sector’s estimated US$130 billion annual global earnings. Ivory Coast and Ghana, located in West Africa, produce about two-thirds of the world’s cocoa.
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Ivory Coast and Ghana introduced the Living Income Differential (LID) at a US$400 per ton premium aimed at helping farmers achieve a minimum living standard to address poverty among cocoa farmers. But experts say the scheme was undercut by buyers who depress the price of another premium based on bean quality.
