Chocolate Is Profitable, Just Not for Farmers

Chocolate is big business. The U.S. spends more than $16 billion on chocolate each year (around $50/per person on average).

But not enough of that money is reaching farmers. A recent survey by Fairtrade International found that the average household income of cocoa farmers in West Africa is $2707/year, which is only about a third of what would be considered a livable income.

Chocolate companies insisting that farmers farm “better” while companies reap profits is an example of corporate corruption at its most egregious.

As awareness grows of social and environmental problems associated with growing cocoa, including child labor, deforestation, and poverty income for farmers, consumers have put pressure on mega chocolate companies like Mars, Nestle, Hershey and Mondelez to build fair and sustainable supply chains. These companies have started to make commitments to purchase cocoa certified by a variety of eco-social certifications.

Not All Certifications Are Fair to Farmers

Evidence is mounting that not all eco-social certifications are effective at solving the cocoa crisis. UTZ, which has recently merged with Rainforest Alliance, is the most popular certification with these large companies. But the premiums given to farmers have fallen by a third in the past five years, according to recent reporting.

Even more troubling, the model used by UTZ and Rainforest Alliance as well as by Mondelez’s own Cocoa Life program focuses on improved agricultural practices so that farmers and grow and sell more.

This is a problem for several reasons. First, one of the reasons prices are so low is that there is already an oversupply of cocoa. Encouraging farmers to grow more contributes to the oversupply and depressed prices. Increasing yields without increasing price is not a sustainable solution.

Second, this model shifts the burden to farmers. Cocoa farmers in West Africa are largely smallholders. According to the Fairtrade International survey, only 7% of the farmers in the sample were able to achieve a livable income, that is a fair income that keeps the farmer out of poverty.

Last year Hershey had $7.44 billion in sales and $720 million in profits. Mars had revenue of $35 billion. Mondelez had over $25 billion in revenue and returned $3.4 billion in profit to shareholders. These companies are profitable and powerful. Insisting that farmers farm “better” while companies reap profits is an example of corporate corruption at its most egregious.

Hershy’s reported plan to use smartphones to send growers video and text messages with tips on agricultural practice while boasting of lower cost of goods (i.e. paying farmers less for cocoa) is an affront to farmers who desperately need a fair price for what they are already producing.

So What Can Consumers Do?

  1. Look for fair trade chocolate with the labels from strong fair trade certifiers like Fairtrade America and Fair for Life. Fair trade is the one certification that guarantees a minimum price for cocoa and a set additional premium that is democratically administered by farmers who choose how it is used to invest in their farms and communities.
  2. Buy from brands that are committed to paying fair and sustainable prices to all farmers they buy from.
  3. Farmers can benefit from training and sharing best practices. But this is most effective when they can learn from each other, not through a text message from Hershey. Grow Ahead is a crowd funding platform that raises money for farmer-to-farmer trainings and other resources for small-scale farmers.
  4. Ask your local stores to make fair trade chocolate available.
  5. Ask your favorite brands to use fair trade chocolate if they do not already. You can call, write, or contact via social media any brand that uses chocolate and let them know you want them to prioritize fair prices for farmers over corporate profits and cheap chocolate. The more brands hear from consumers, the more likely they are to comply with our demands!

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