More child labor prevention needed as cocoa prices fall, warn UTZ and ICI

By Douglas Yu

- Last updated on GMT

ICI and UTZ say declining cocoa prices may increase the risk of child labor.  Photo: UTZ
ICI and UTZ say declining cocoa prices may increase the risk of child labor. Photo: UTZ

Related tags Cocoa farmers Cocoa prices Childhood Utz International cocoa initiative World cocoa foundation

 A sharp decline in cocoa prices could put children at increased risk of child labor unless more is done, say the heads of UTZ and ICI.

Recent surveys, conducted by Tulane University and financed by the US Department of Labor, suggest more than two million children work in the cocoa sector across Côte d’Ivoire and Ghana, which together account for more than 60% of the world’s cocoa supply.

Falling cocoa price increases child labor risk

Executive director at ICI, Nick Weatherill, said the global cocoa prices have dropped by 37% since July 2016 based on Trading Economics’ data.

The falling cocoa prices have a potential impact on child labor risk because cocoa farmers have to take their children out of school to work on their farms, Weatherill said.

“The average cocoa farmers get 70% of their household income from cocoa, if they see 30% reduction [in production], it more or less translates into 25% reduction in disposable income on a household level,”​ he said.

cocoa price
The global cocoa prices have dropped by 37% since July 2016. Source: Trading Economics

'Change is urgently needed'

Executive director at UTZ, Han de Groot told ConfectioneryNews: “In Côte d’Ivoire and Ghana, the minimum prices are fixed by government. They adjust them every few months, but they are still based on the fluctuating global cocoa prices."

“Due to a variety of factors, the current global price is low. The minimum price in Cote d’Ivoire has decreased considerably in the past few months, and tens of thousands of farmers who rely on cocoa as their main income are going through a very hard time,”​ Groot added.

The UTZ boss said "change is urgently needed".

“I cannot predict whether cocoa prices will go up or down but one thing is certain: Low cocoa prices is one of the main challenges today.

“Higher prices will help, but to fully address this challenge we also need to see many other changes, including coherent agricultural policies, sector wide collaboration and more support to cocoa farmers to diversify their production,"​ he said.

However, Groot said only a fraction of farmers are reached by projects addressing child labor, even though major players in the cocoa industry, such as Nestlé​, Mars and Cargill, have been preventing child labor through their own programs. 

“Much more is needed,”​ he said.

Will the merger of UTZ and Rainforest Alliance help?

Groot is expected to become the CEO once UTZ and Rainforest Alliance​ merge later this year.

The organization's claim a merger between Rainforest Alliance and UTZ will simplify certification process for cocoa farmers by creating a single standard for agricultural certification. They will also save costs because they will need to carry out only one annual audit instead of two, said Groot.

The falling cocoa prices have a potential impact on child labor risk because cocoa farmers have to take their children out of school to work on their farms, executive director at International Cocoa Initiative, Nick Weatherill, said. 
Nick Weatherill 1
Nick Weatherill Photo: ICI

Positive outlook

Weatherill said the cocoa industry has an “evermore sophisticated”​ understanding of what it takes to both prevent respond to child labor when it occurs on a farm.

“What we call ‘good practices’ are really being scaled up now, so I’m not seeing missed opportunities but energy in the right direction,”​ he said.

“If CocoaAction (launched by World Cocoa Foundation in 2014) is going to cover the 300,000 farmers in the next three years, the cocoa industry needs to cover 2.1 million children.That’s when the job is being done,”​ Weatherill said.

“We’re very positive about the achievements to date… and the efforts to scale up [methods to maintain sustainability] need to continue,” ​he said.

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Cocoa farmers have to take their children out of school to work on farms?

Posted by Max,

The article seems to conclude that the falling world market price of cocoa translates to a decrease in cocoa production and hence lower income for the cocoa farmer. I argue this to be untrue because the output for the 2016/2017 crop year is actually up by about 12% in Ghana. Moreover, in Ghana, COCOBOD set up a Cocoa Stabilization Fund that allows for farmers to be cushioned in the event of falling cocoa prices. Therefore farmers in Ghana are always guaranteed a stable price (Cocobod bears the loss).

Hence the argument that Cocoa farmers have to pull their children out of school to work on the farms does not hold, especially in the case of Ghana.

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Posted by L. Hopkins,

Why are the cocoa prices dropping?

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Cocoa income statistic

Posted by Henk Gilhuis,

Hi Douglas, your article quotes Nick Weatherill saying that 17% of household income comes from cocoa, on average. That seems too low. To my knowledge the average contribuition of cocoa to HH income in Ghana and Cote d'Ivoire is in the range of 70% to 80%. If cocoa income would only be 17%, a price drop wouldn't be so dramatic, and there would be no need to diversify.

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