Chocoa 2019: The economics and politics of cocoa

The Chocoa Conference in Amsterdam opened on Thursday with calls from industry leaders, backed by the Dutch government, to improve the financial welfare of cocoa farmers and halt deforestation.

In his keynote speech, and his first at Chocoa as the new executive director of the International Cocoa Organization (ICCO), Michel Arrion said there was a valid argument “to triple the price of cocoa for farmers​” and that any certification program must include “a solid component for living income”.​

'More action less talk'

He called for more action and less talk. “We have been talking about child labor, deforestation and too low farmgate prices for at least 15 years. It is time for action, and time to scale up. We need to do much more​.”

There are too many cocoa farmers still living in extreme poverty and conditions for diversification on farms need to be improved, so farmers are not wholly dependent on cocoa for a living, he said.

As the new head of the ICCO, he recognized that his own organization can do more and said he is implementing a five-year strategy plan to improve its data and statistics to look at cocoa’s impact on the market. “The ICCO is a technical agency and we can do much more. ​We need more data points, especially on trade and stocks as these are related to price setting in the sector​,” he said.

More countries should work collaboratively on cocoa policies, he also told the conference.

Tanya Gonggrijp, who is on the management team for sustainable economic development at the Dutch Ministry of Foreign Affairs, said, “We need to pay start paying the real price of products we consume for transformative change against the Sustainable Development Goals (SDGs​)”.

Due diligence legislation

Etelle Higonnet, senior advisor at Mighty Earth, alleged some major cocoa companies have been caught “red-handed” ​buying cocoa illegally from protected areas and national parks in West Africa. Deforestation in cocoa needs EU due diligence legislation, she said.

Gonggrijp said due diligence legislation is a possibility, but she argued it may not have a short-term impact; sustainable production and trade for SDGs remains a long-term goal, she said, and it was important to focus on law enforcement to help the sector on an economic and political level.

She said the Dutch approach – an integral approach to the cocoa forest initiative as laid down by the Amsterdam Declaration – should be a general approach and needs scaling up.

Cédric van Cutsem, Mondelēz associate director of its Cocoa Life program, talked about the ‘three ‘Ps’ – People, Produce, Protect.

“Through Cocoa Life, we address deforestation in cocoa by engaging the whole community - not just farmers. We work on solutions to provide financial benefits and the right incentives to protect forests and create more sustainable livelihoods​,” he told the conference.

He said deforestation cannot be at the expense of farmers’ income and it must have a positive impact on farming communities.

More aligned approaches are needed, he said, and transparency on farm mapping should be mandatory. “Traceability starts at the farm​”.

New standards

Jack Steijn, chair of the ISO and director & co-founder of Chocoa, said a new standard on sustainable cocoa is due to be published before summer this year, but it is almost three years overdue.

He described himself as “an incurable optimist​” and, despite the delay, promised the new standard will consider the livelihoods of the cocoa producer, an update on deforestation and report on new technical advances, such as satellite mapping, drone surveillance, cell phone technology for farmers and new standards for farm business administration.

“The exisiting sustainability certification system will not make up for neglect of past years and we all need to contribute to reforestation​,” he said.

The future looks “shadowy​”, he told the conference, referring to the planting of larger tress such as rubber or coconut, to provide cover and protection for the cocoa crops.

The shadow of child labor still hangs over the cocoa sector and was another topic of discussion on the opening day.

Child labor

Speaking to the conference remotely, Amanda Berlan, associate professor of business & sustainability at Leicester’s De Montfort Univeristy Business School, said: “It’s problematic that chocolate companies delegate responsibility on child labour to NGOs and other agencies. Poverty alone is not a strong explanation for child labor​.”

Matthias Lange, director of policy and programs at the International Cocoa Initiative (ICI), said his organization estimates there are 2.1m child laborers working in the cocoa sector in Côte d'Ivoire and Ghana, and 16,000 of those were forced into labor.

The ICI’s engagement along the cocoa supply-chain is achieved through the setting-up and management of Child Labour Monitoring and Remediation Systems (CLMRS). Lange says he expects 300,000 cocoa farming households to be covered by CLMRS by 2020.

“Voluntary compliance is inadequate​,” he told the conference, adding that legislature is necessary to tackle child labor.

Stephen Ashia from ABOCFA Fairtrade coop in Ghana said a fair price is key to keeping the next generation of farmers in cocoa. He said in his country young people are still leaving the countryside and moving to the city because the price of cocoa is too low to continue working on farms.

Abubakar Afful, a business development advisor for cocoa for Fairtrade Africa, said the farmer is the starting point of the supply chain, without them there is no supply of cocoa.

Then he asked the audience at Chocoa: "Who in this room would switch places with a cocoa farmer?"​

Berlan said the De Montfort University Business School’s report in 2018 into child labor showed that, in the past 20 years, things have not changed and there are still similar findings of ongoing tensions between farmers and stakeholders that haven’t been addressed.