Órla Ryan is an Irish journalist who lived in Ghana for approximately 4 years. She worked for Reuters, a media company known for providing information to the media and financial markets. Her mission was to regularly provide stories about cocoa. She interviewed a collective of people from diverse backgrounds and collaborated with them to contribute to her stories. As she explains it in her book, “On one level, this was highly mundane information, available to anyone willing to make the effort to get it. On another level, it was highly sensitive.” The information she gathered was used to make speculations on the cocoa market. There’s a saying that goes, “Cocoa is Ghana and Ghana is Cocoa”. Every bit of information she would publish could have an impact on the country’s revenues.
Published 10 years ago, in 2011, Chocolate Nations explores the multidimensional power of cocoa in West Africa and its relationship to the world.
Before we start spilling the tea, I think it is important to remember that cocoa is not native to West Africa. The crop was imported from South America during colonial times. Cocoa’s role in West African society is purely economic and political. Côte d’Ivoire and Ghana account for over two thirds of the global cocoa production.
“In West Africa, cocoa and chocolate do not feature in local recipes or ceremonies.”
Cocoa is a capricious crop, it needs the right amount of humidity, sunlight and warm temperatures. It requires lots of care. It is one of the only crops that is not fit for a plantation model.
Cocoa felt right at home in the neighboring countries of Côte d’Ivoire and Ghana. The environment suits cocoa’s needs and they are farmed by small scale farmers (over 2 million of them).
These farmers rely on the earnings from cocoa to sustain their life and their families. But they are not the only ones dependent on cocoa for money.
“Cocoa money supports millions of people, not just those who work the farms, but also many who have never harvested a pod.”
Unfortunately, cocoa farming is not an attractive future for an educated youth, especially the ones who saw their parents work hard all their life for little reward.
Cocoa farmers are trapped in a circle of poverty, which eventually led to the use of child labor. The latest report from NORC at the University of Chicago reveals that 1.56 million children were harvesting cocoa in West Africa in 2018/2019. Chapter three of the book reveals that this highly publicized issue is deeply rooted in the way that farmers produce cocoa.
Indeed cocoa producing countries were in high demand for cheap and unskilled labor force. So far, the world demand for cocoa has been met by the ready availability of land and labor.
However, as mentioned earlier, cocoa is a capricious crop. Cocoa farmers had a limited understanding on how to improve their tree’s productivity.
Since the publication of the book, multiple initiatives have been led to educate farmers on farming cocoa. There’s also been programs to teach farmers how to take care of their beans post harvest to increase quality and therefore value.
“Consumers can enjoy all the chocolate they want at a price they can afford precisely because of the ability and willingness of African farmers to grow all the cocoa the world’s chocolate factories need.”
In 1895, 77,000 metric tonnes of cocoa were exported. Most of it came from South America and the Caribbean’s.
By 1925, an estimated 500,000 tonnes were exported. Most of it was produced in West Africa.
In 1960/61 the exports had risen to 1.1 million tonnes.
In 2007/2008, exports reached 3.7 million tonnes.
Producing countries lack negotiation power for multiple reasons:
- They are competing with each other for market share. Their populations are reliant on earnings from cocoa so they seek to expand their production. Cocoa is a perishable good so even if producing countries came to an agreement to control supply, the good could not be held back for long.
- They are trading with highly concentrated processing and retail businesses; meaning the buyer has bigger scale, resources, and bargaining power.
“In the past ten years, as buyers have become stronger, producer power, already fragmented, has splintered further.” and that’s a trend that kept on evolving these past ten years.”
In addition to having a low negotiation power, producing countries are vulnerable to the volatility of cocoa prices.
Another aspect explored is that most of the value added activities are being exported to where the market for chocolate is (Europe, North America, Asia).
Cost of producing chocolate locally is not attractive enough: electricity cost, import taxes on ingredients, refrigeration of products… and the absence of a local market.
Most of the global exports have been coming from Côte d’Ivoire and Ghana for the last 100 years. Cocoa is virtually their only commercial crop.
Both countries were built off of cocoa money. It only makes sense that it is entangled in the country’s politics.
Although they are neighboring countries, they each took different approaches to managing their cocoa production.
Ghana favored industrialisation. Côte d’Ivoire opted to make the land available for farming to whoever was willing to farm it, migrants included.
Initially these systems worked, allowing both countries to develop. But when issues started to arise, such as a decreasing price of cocoa on the international market, both systems quickly collapsed. Debts, angry farmers, corruption scandals…
Did you know that there was a cocoa war happening less than 20 years ago? It ended in 2003! It sprouted from identity crisis, battle for land and resources.
All of the current issues present in the cocoa industry stems from poor management. Chapter 1 and 2 of the book go over both country’s history, how they handled their success, and their downfall.
Nowadays, the question of whether the governments have the cocoa farmers’ best interests at heart is still on the table. Cocoa farmers are voters and there are a lot of them so the governments know they better take care of them. The recent implementation of the Living Income Differential, a premium paid by cocoa buyers per ton of cocoa on top of the Free on Board price is a step in the right direction. But there is much more to do.
“Smallholders need to have a voice locally, one which can be heard by their own politicians. Second, the organisation needs to have a voice which can be heard on the world market. Unless that happens, the voices of the 2 million or so farmers in West Africa will remain little more than a whisper.”
In Côte d’Ivoire, deforestation was encouraged by the government in favor of cocoa farming.
“The forest clearance necessary to produce cocoa may have destroyed the nutrients in the soil that feed the cocoa trees.”
Programs to reduce impact of deforestation and forest degradation such as REDD+ have helped create a relationship with cocoa farmers and sensitize them to the importance of tree tenure.
Diversification of crops is also being encouraged.
The raising awareness around climate change is pushing for more initiatives to promote the environment’s well being. Unfortunately the damage is deep, current efforts will take some time to have a meaningful effect and time is the only thing we’re really lacking.
What about Fairtrade?
The book has a whole chapter about it called: “FAIRTRADE MYTHS AND REALITY”. The title sets the tone. Long story short, it does not mean much in the cocoa world.
Because it lacks resources and reach, Fairtrade’s impact is too small to be significant. Also it seems like there is a gap between its perceived value and the actual meaning of its initiatives. Ultimately, it is not the only answer to producers’ problems.
“The issues that need to be tackled now, those of diversification, land reform, rural banking and scientific research, lie beyond the remit of Fairtrade.”
Cocoa “has the potential to deliver real prosperity to people in rural areas”.
Since the publication of this book 10 years ago, the situation in West Africa has evolved and the main issues remain.
Reading this book was an eye opening experience. History is a great teacher and I believe Chocolate Nations is a must read to further one’s understanding of the chocolate industry.
We hope this article inspired you to read Órla Ryan’s book!
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