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Chocolate Makers Fail On Fair Pay For Cocoa

by Wangah Wanyama
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 LONDON, May 11, 2023 (AFP) – The world’s biggest chocolate makers are failing on promises to improve pay for farmers in major cocoa producer Ghana despite strong profits, the charity Oxfam said in a report on Thursday.

It said earnings for US companies Hershey, Mars and Mondelez in addition to Italy’s Ferrero and Swiss peers Lindt and Nestle had increased since the onset of the pandemic in 2020, a period when inflation has soared.

At the same time, an Oxfam survey of more than 400 cocoa farmers in Ghana — the second-largest global producer of the commodity — found their net incomes had fallen by an average of 16 percent since the same period.

For women, the average drop was 22 percent, it added.

“There’s big money in chocolate — but definitely not for farmers,” said Oxfam International’s interim executive director, Amitabh Behar.

“Cocoa farmers work extremely hard, under grueling conditions, yet can’t always feed their families.”

The charity claimed that up to 90 percent of Ghanaian cocoa farmers do not earn a living income, “meaning they cannot afford enough food or other basics such as clothing, housing and medical care.

“Many of the 800,000 farmers in the country survive on just $2 a day,” it added.

– ‘Everything to help’ –

Responding, Nestle said that while it “cannot influence the farm-gate prices due to the cocoa-trade structure in Ghana” the company does “everything we can to help cocoa-farming families close the living income gap”.

It told AFP that it strives also to help improve incomes for farmers in Ivory Coast, the world’s biggest producer of cocoa.

Ivory Coast and Ghana, both situated in West Africa, together produce about two-thirds of the world’s cocoa.

Ferrero said farmers in the countries receive a cash premium on top of the commercial price for cocoa.

“We have been among the first companies to fully support the Living Income Differential,” it said in a statement.

Ivory Coast and Ghana introduced the LID in 2019 to fight poverty among cocoa farmers in the global $130-billion chocolate market.

But their trade boards say the scheme is being undercut by buyers who depress the price of another premium based on bean quality.

Mars, which said it was the first major manufacturer to publicly support the LID, added that its direct financial support to cocoa farmers goes beyond the poverty-fighting initiative.

“We also work on diverse initiatives… with women and their families in cocoa growing communities to improve their livelihoods.”

Oxfam’s Behar said chocolate giants needed “to put their money where their mouth is”.

“They must rid themselves of their colonial legacy of extracting raw materials and keeping farmers in poverty while making astronomical profits for their rich shareholders,” he added.

Some of the companies identified in the report had yet to respond to AFP.

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