Cocoa farmers earn only 6% of chocolate industry’s total revenue – Report

A report by the Federated Commodities (FEDCO), a licenced cocoa buying firm headquartered in Ghana, has revealed that cocoa farmers only earn about 6 per cent of the chocolate industry’s total revenues.

This is despite undergoing arrays of strenuous hikes in order to make the commodity available all year round.

According to the report published Wednesday, leading chocolate companies have, since 2001, made pledges to end “widespread abusive labour practices” but continue to fall short.

In the report, FEDCO recommended that it is only by improving the cocoa supply chain with experienced local oversight that ethical, sustainable and profitable cocoa and chocolate industries can exist.

The cocoa firm noted that its CEO, Maria Adamu-Zibo, is ready to form international partnerships to take the Ghanian cocoa sector forwards.

“Cocoa is essential to the livelihoods of up to 50 million people around the world, including around five million smallholder farmers,” the report reads.

It says West Africa, mainly Ghana and Ivory Coast, produces about 70 per cent of the world’s cocoa on 1.5 million farms, with the majority of the crop coming from small farms (3-5 hectares of land).

Nigeria, former cocoa champion

Meanwhile, cocoa was a major agricultural export commodity in Nigeria, and a top foreign exchange earner in the 1950s and 60s.

Prior to the discovery of crude oil in commercial quantities in the 1970s, Nigeria was the world’s second-largest producer of cocoa.

Unfortunately, Nigeria’s average cocoa production declined from 420,000 tons in the 60s to 170,000 tons in 1999. Production rose to 389,272 tons between 2000 and 2010, but declined to 192,000 tons in 2015 and 2016.

Nigeria dropped to fourth place in the global ranking this period.

However, Nigeria is currently the sixth largest producer of the commodity.

PREMIUM TIMES had reported how the neglect of the sector pushed Nigeria down the global pecking order.

“Cocoa farmers work very hard, often under strenuous conditions, yet don’t earn enough to cover their basic needs,” the FEDCO report added.

Cocoa farmers’ challenges

The report highlights that although the worldwide chocolate market is valued at $103 billion, on average, farmers earn only about 6 per cent of the chocolate industry’s total revenues.

The report said many cocoa farming communities in West Africa lack access to education, potable water, and basic social amenities. “Furthermore, labour practices on cocoa farms are problematic. In a bid to reduce production costs, farmers are inclined towards child labour.

“An estimated 1.56 million children work on cocoa farms in Ghana and Ivory Coast. About 43% of children aged 5-17 in these two countries are engaged in hazardous work, including exposure to agrochemicals without protective equipment, the use of dangerous tools and working at night.

“Despite years of pledges from chocolate manufacturers to end abusive employment practices in their supply chains, there has been a 14 per cent increase in the number of children working in cocoa farms over the past 10 years, accompanied by a 62 per cent rise in production,” the report explained.

SOURCE: PREMIUM TIMES

Cocoa farmers earn only 6% of chocolate industry’s total revenue – Report

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