Ivorian cocoa farmers ‘barely survive’ while chocolate company profits soar

7 months ago 29

Aboude, Ivory Coast – It’s 11am in Aboude, a village in southern Ivory Coast, and Magne Akoua has already been working on his cacao farm for several hours. The 65-year-old moves slowly and methodically from one tree to the next, scrupulously shunning the scorching sun.

“We have to check on our fruit daily. Every three months, it becomes ripe and we can harvest it. But harvest hasn’t been good at all lately,” he says.

Akoua has been a farmer for more than 40 years since he decided to leave a low-level administrative job in Abidjan, the country’s economic capital, to run a small piece of family land on the outskirts of his native Aboude.

Cacao – the plant whose pods are harvested into cocoa, eventually becoming chocolate – is an intricate agricultural product that is particularly vulnerable to its natural environment.

“I love cacao. It’s what I know best. But it’s very difficult to work with,” Akoua explains. “It gets contaminated by pests. It needs a perfect balance between rainfall and heat to thrive, otherwise, its roots get flooded and rot or they simply dry up. This means that we get fewer pods and fewer pods means fewer cacao beans.”

This is what has happened in recent years in the country, and increasingly so during the latest harvest season that began in October 2023.

The top cacao producers in the world – Ivory Coast followed by its neighbour, Ghana – have been severely affected by the El Nino weather pattern.

The climate phenomenon, characterised by warmer than average sea surface temperatures in the equatorial Pacific Ocean, has been bringing drier conditions to the West Africa region.

Additionally, climate change-induced hotter temperatures and altered rainfall patterns have further affected cocoa harvests.

“A few seasons ago, one hectare [2.5 acres] would yield about 600 kilos of cacao. Nowadays, it barely produces 300 kilos,” Akoua says.

‘We barely survive’

The struggle to make ends meet is not new.

“Cacao farming requires a lot of physical work and time. We can’t afford more manpower, so we [with the boys in the family] do everything ourselves,” Akoua says. “We barely survive doing all of this.”

But the everyday challenges are made more acute in a hugely unequal market where production shortfalls mean farmers struggle to make ends meet while surging chocolate prices help international companies’ profits to soar.

Also in Aboude village, farmer Christian Kouassi describes such hardships.

As a member of the agriculture union in the locality, he is concerned about cacao farmers getting a fair deal for the work they put in to harvesting.

Kouassi has been advocating for farmers to become a more proactive part of the sector’s value chain.

“We have absolutely no say in the price of the fruit that we produce. This has to change somehow. As a union, we’re concerned with making cacao more sustainable and producing it in a way that benefits the community,” he says.

“The government recently raised the price for a kilogramme of cacao, it’s a good step. But more needs to be done to help us and our livelihoods,” he adds.

On April 2, Ivory Coast unveiled the new price for the mid-crop season spanning from April to September 2024. The price per kilogramme of cocoa beans is now set at 1500 CFA francs ($2.48), marking a 50 percent increase.

This record-high price followed the surge in prices on the New York Stock Exchange in February. Cacao prices hit a record high of $5,874 per tonne on the New York commodities market.

Price stabilisation

In 2021, Ivory Coast and Ghana introduced a premium of $400 per tonne known as the “decent income differential”. The purpose was to guarantee farmers a minimum income irrespective of fluctuations in the price of exported cocoa beans.

However, Ivorian cacao producers are still hopeful for further increases in the upcoming season.

In the West African country, government authorities, along with several regulatory bodies and institutions, play a pivotal role in determining the price of cocoa.

The Coffee-Cocoa Council (Conseil du Cafe Cacao) is the key entity tasked with regulating cocoa prices and supervising the cocoa industry in the nation.

Typically, at the outset of each cocoa season, the government makes public announcements regarding cocoa prices, considering a range of factors including global market rates, production expenses, and feedback from cacao farmers and other stakeholders. The adoption of a stabilisation system effectively means that producers earn a set income per kilogramme sold, despite all of these external factors.

“There is a guaranteed threshold for cacao producers. Traders that deal with multinationals see their profit margins vary, which is not the case for farmers. It’s a system that makes sense when you consider the instability of commodity prices – including cacao – on the international market,” Souleymane Fofana explains.

Fofana started exporting cacao in 2017 when he created his company, Cote d’Ivoire Commodities. As an exporter and mill operator, he has a bird’s eye view of the sector and understands its complexities.

“There are a lot of moving parts. For example, the environment’s evolution … Over time cocoa orchards age and become less productive, which makes it hard for farmers to sustain their production. Not to mention, cacao is not a part of the average Ivorian person’s diet. Chocolate is a luxury delicacy that most people don’t purchase. Our market remains the Western market at the end of the day,” he tells Al Jazeera.

International companies vs local economies

According to a Grand View Research market analysis report, the global chocolate market value was estimated at $119.39bn in 2023 and is anticipated to grow at a compound annual growth rate (CAGR) of 4.1 percent from 2024 to 2030.

In 2023, United States-based Mars Wrigley Confectionery was the leading chocolate and cocoa manufacturer worldwide, with net sales of $22bn. Ferrero Group and Mondelez rounded out the top three companies, both exceeding $10bn in net sales.

Meanwhile, according to a new Oxfam analysis, the collective fortunes of the Ferrero and Mars families surged to $160.9bn in 2023. This is more than the combined gross domestic products (GDPs) of top cocoa producers Ivory Coast and Ghana. Ivory Coast specifically accounts for 45 percent of the global production of the “brown gold”.

“It’s a huge anomaly. And there needs to be a thorough reflection on the national level to fix these gaps and to increase profit for our country and all of the sector’s stakeholders,” Fofana says.

“We have a handful of local chocolatiers that make chocolate from our Ivorian cacao beans. It’s great and all, but we have to be realistic. We don’t have the capacities and industrial capabilities to compete with giant multinationals that have grown their brand through decades of efficient advertising and a lot of capital,” he tells Al Jazeera.

“What we can do, however, is expand our list of clients, open up to other markets that also want to process and transform cacao beans, like countries in the MENA region for instance,” he adds.

‘Who does cacao belong to?’

Fofana specifically questions the pertinence of the Federation of Commerce of Cacao, an entity that was created in 2002 to – as it describes its mission – “develop a unique and robust commercial framework for the cocoa market, enabling harmonisation of contracts and providing education services and programs”.

The cacao exporter believes that the FCC gatekeeps business opportunities from countries like Ivory Coast through its registration system.

“Companies have to register with the FCC which is headquartered in London. It makes you wonder ‘Who does the cacao actually belong to?’

“Most of our client companies are American and European. But the world is changing, and partnership horizons should expand with it. We should sell our cacao to any country that is keen on chocolate,” he concludes.

Back in Aboude, Akoua and his family rise faithfully every morning to farm the precious cacao, but they do not consume any chocolate.

The farmer cannot fathom going to a shop to spend his hard-earned income on a chocolate bar – which sells for about 1,500 CFA francs ($2.48) each, the same amount he would earn for a full kilogramme of cocoa beans.

“In the end, we can try and diversify our use of our land and produce other crops. We already try. But our leaders have to make sure that we – at the source – benefit from all the money these big multinationals make,” he says.

“Our cacao is clearly important to them and their consumers. We should be able to reap the benefits of that.”

Read Entire Article