How cheap chocolate is destroying the cocoa industry

The image of chocolate bringing joy, and sharing love is not even close to the truth for many of the people growing this much cherished commodity. Those that cultivate the cocoa bean, the beginning of the chain towards our beloved chocolate, are some of the most impoverished and abused workers in the world.

The average farmer in the Ivory Coast, the country which, according to most estimates, produces 58 per cent of the world’s cocoa, earns on average US$ 0.50 a day—US$ 1.50 below the poverty line. The industry is also rife with poor farming practices, and other labour issues—including many children being forced to work for no money, performing dangerous tasks, and being deprived of an education.


With regard to ethical working conditions and good farming practice, cocoa is a way behind many of the other major commodities that are farmed in the developing world.

As a result of this, the younger generation is deciding to move away from the industry, and the world is running out of cocoa farmers.

These challenges have driven many companies and organisations to step up their commitment to work toward sustainable practices in the major cocoa producing nations, and to get on board with some of the international programs that have already been working towards better practices.

Rainforest Alliance and UTZ Certified are the largest organisations working towards sustainable practices within the Cocoa industry, accounting respectively for 40 per cent and 48 per cent of all certified cocoa products in the world. Rainforest Alliance place sound environmental practices at the top of their priority list, while UTZ Certified is concerned with working on professionalising farming and management.

Anica Huber, from UTZ Certified, said: “The amount of companies choosing to take on certification have been growing steadily over the last few years.” The organisation, which began in 2002, has grown to see certified products sold in 135 nations, including products from larger corporations such as Nestlé, Douwe Egberts and Mars. Certification in the cocoa industry in particular grew by 32 per cent in 2014

In order to be certified, companies must invest in teaching better farming methods, which  UTZ believes will improve working conditions, enable farmers to take better care of the environment, and send their children to school. By growing better crops, it is assumed farmers will be able to generate more income, and therefore create better opportunities for themselves.

The first organisation set up to work towards sustainable practices in the developing world’s agricultural industry, and a pioneer of the Fairtrade movement was the Dutch organisation Max Havelaar.

Since their inception in 1988, Fairtrade have been influential force in pushing for sustainable practices, but they have not had the same impact in cocoa as they have had on other industries. Until now, the greatest concentration of Fairtrade workers has been found in Africa and Asia working in tea, bananas, and flower farming.

The approach of a Fairtrade company is to set a minimum price on its commodities and to invest the premium back into the communities. They are also concerned with the whole supply chain, not just working with the farmers and their local communities. Companies producing products under the Fairtrade stamp must also be engaging in sustainable practices.

“Cocoa has been difficult to work in, but there have been a lot of developments recently,” according to Bente Meindertsma from Max Havelaar. “The big one of these is how in The Netherlands all cocoa companies have committed toward working with only sustainable cocoa.”

A lot of the blame for the poor situation within the industry has been directed at the oligopoly of several major companies that control, buy and produce more than 70 per cent of the world’s cocoa-based products. These companies have been accused of investing little into the farms, and not being concerned with paying fair market prices.

Despite these claims, the large cocoa processing company ADM’s* director of sustainability, Michiel Hendriksz, said sustainability was a concern of the major corporations, and “they all work towards creating better environments in the industry in some way”.

Mr Hendrickx said his company had been helping farmers in the nations they receive their cocoa from since the full liberalisation of the cocoa industry in West Africa. Before this the cocoa industry was run by the governments within the few cocoa-producing nations, hence support was considered a government responsibility.

“ADM’s approach is integrated,” said Mr Hendriksz. ADM was committed to help farmers in agricultural matters, but also to inform the community in other social affairs, while also being committed to working with a larger groups of organisations and companies for better practices.

He said they began by “addressing agricultural issues, then moved to work at improving social and environmental issues”.

Cocoa on tree

With regard to the contentious issue of the amount of income farmers receive for their crop, he said “the countries set the farm-gate prices, and no one dares to charge the issue with these with governments”. On top of this, he said certification did not guarantee better pay or conditions for the farmers. “There are ways around the system, it is easy to cheat.”

Because of this, ’bean to bar’ traceability has become a new push within sustainability organisations.

Amsterdam-based chocolate company Tony’s Chocolonely have become the first company in the world to have 100 per cent traceability on their products. Tony’s Chocolonely was started with the goal of modelling how profitability and quality were possible within a best practices environment.

Tony’s Chocolonely representative, Maudi Admiraal warned that despite all the initiatives, there is still not enough being done, and pointed again to the looming workers crisis.

Ms Admiraal said decades of poor farming practice, with little investment from the buyers means that cocoa can be a very unproductive and unattractive crop to grow. “It’s complicated to farm, has to grow in the shadow under the forest canopy, and it involves messy and difficult labour,” Ms Admiraal said.

It is a lot of hard work, not a lot of money, and youth dont see themselves in the industry. It is already older people who do most of the work, when you are there all you see is 55-year-old men and women doing everything.

She said that the industry is already beginning to struggle in keeping up with demand, crisis is inevitable, and “there will be no more cheap chocolate!”

“Pressure needs to placed on the large companies that control the supply chain” she said, and believes it is a combination of social pressure and government intervention that will affect change on the situation.

The question that remains is, despite the recent developments, is it too little too late? Or is this, as Ms Admiraal asks, “the crisis that forces the change that the cocoa industry really needs?”



*ADM has now fully passed on its cocoa processing operations to Olam International.

–J. Kollar

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