The environmental impact of cocoa production
In West Africa, cocoa expansion has led to widespread deforestation and ecosystem degradation, decreasing soil fertility and increasing soil erosion. Smallholder farmers experience lower yields and incomes because of the poor tree and soil management, pests, diseases, and lack of access to improved technology, agricultural inputs, and financing.
The inequity of the cocoa market
Cocoa is in high demand. In 2018, the global chocolate industry was worth close to USD 100 billion, and it is projected to grow.
In Côte d’Ivoire, cocoa provides 14% of the gross domestic product, contributes to 1/3 of the income from exports, and covers 10% of the national budget. In Ghana, cocoa export accounts for about 25% of foreign exchange earnings.
If you’ve wondered where cocoa comes from, follow the journey of cocoa as it transforms from bean to bar:
1. Growing and harvesting
The journey of cocoa starts on a farm, where millions of small farmers in warm, humid climates grow cocoa on land averaging 2-3 hectares. Cocoa is cultivated for its beans which are used mainly to produce popular chocolate confectioneries and beverages. Farmers in Ivory Coast, Ghana, and Indonesia produce 75% of the world’s cocoa.
The beans are weighed and sold through intermediaries between farmers and exports, reducing farmers’ margins, or directly to exporters. There is rarely equitable benefit sharing among all actors in the cocoa value chain, with farmers being the most vulnerable link. Many cocoa farmers live in poverty despite the high market price for cocoa.
Once the cocoa is ready to be processed into cocoa butter, paste or powder, it is often shipped away from where it was grown. There are few incentives to encourage cocoa processing in producing countries, thus, the bulk of the harvest of the crop is exported as a raw product. Only around 7-10% of the value generated along the cocoa value chain is captured by producing countries and farmers.
It is estimated that a country like Côte d’Ivoire receives only 5-7% of this value although it contributes 40% of the world supply, the rest is earned by the processors and distributors.