2020 Cocoa Barometer report reveals poverty, child labor and deforestation

After two decades of failed interventions across the cocoa sector, the farming communities are still struggling with the effects of poverty, child labor, and deforestation. This is revealed in the recently released 2020 Cocoa Barometer report. Cocoa production in Ghana and the Ivory Coast, which accounts for 60% of global production, involves around 1.5 million children with only just under 10% of farmers in Ghana and 12% in Ivory Coast earning a living wage. Meanwhile, large-scale deforestation still continues.

“After two decades of voluntary initiatives that do not tackle the root causes, it is time for systemic change in the sector,” says Cocoa Barometer co-author Antonie C. Fountain. “All the ingredients are there to make it work but it is now time to move forward and put in place ambitious, holistic and mandatory change so that we can finally tackle the poverty, child labor and deforestation in cocoa.”

Price fixing

Fountain is cautiously optimistic about the pricing agreements that Ivory Coast and Ghana made with each other at the end of last year. Foreign buyers now have to pay a premium of US$400 on every ton of cocoa. Despite declining demand for cocoa due to COVID-19, since chocolate is a luxury product, the price of cocoa rose by 21% and 28% for farmers in Ghana and Ivory Coast respectively due to the pricing agreement reached by the two countries.

“The highest price in four years, that’s really nice,” says Fountain, “although it is a problem that Ghana and the Ivory Coast are not transparent and the premium of US$400 per ton of cocoa should actually be twice as high.”

Anna Laven, Senior Advisor, KIT, thinks that “these agreements are unique and some of that money is invested in farmers and other employment opportunities. But if that higher price leads to more farmers growing cocoa without increasing demand, then that measure will not solve the structural problems.”

Given the lack of regulation by the governments of Ivory Coast and Ghana concerning child labor, some Western countries have assumed most of the responsibility to tackle this. Several European countries now require human rights due diligence to be applied to certain companies, for example, the Netherlands’ Child Labour Due Diligence Act 2019, and France’s Duty of Vigilance Law 2017. The European Union is set to introduce legislation that would make human rights due diligence mandatory across the European Union in 2021.

Laven does not want to commit to a final judgment on this legislation.

“It is really important that this legislation is set up in consultation with Ghana and Ivory Coast and local farmers and communities. It is good that we are doing this, but it is a bit neo-colonial when we in Europe determine what the Ivorian and Ghanaian governments and farmers should do.”

The Cocoa Barometer 2020 provides an overview of the current sustainability developments in the cocoa sector and highlights critical issues that are not receiving sufficient attention at present. It is an endeavor to stimulate and enable stakeholders to communicate and discuss these critical issues. The authors have chosen to focus on West Africa because of its dominance in cocoa production and the significant challenges it faces.