Chocolate, now synonymous with cravings, celebrations and gifts to friends and family, is consumed in ever increasing amounts. The global market for chocolate is now valued at $US128 billion a year. That’s a little under half the global value for one of our most important food staples, rice.
While fluctuating around $US2,000 a tonne for the past two decades, the price of chocolate’s main ingredient, cocoa beans, recently hit a record high of $US10,402. This sharp spike came in the face of reduced supply triggered by El Niño-related dry weather and crop disease in the main cocoa producing region, West Africa. Harvests in Côte d’Ivoire, the world’s largest producer, are down by 27% this season and in Ghana, the second largest producer, output is at a 14-year low. However, chocolate lovers have much more than the weather to be concerned about.
Professor David Guest, an esteemed cocoa expert, and Professor Merrilyn Walton, a renowned public health expert, University of Sydney talk about why current record prices of cocoa beans may not avert a global chocolate shortage if urgent action is not taken. They emphasize that while the chocolate industry is valued at $US128 billion annually, many cocoa farmers struggle to survive on less than $US2 a day. They stress the need for the industry to address farmer poverty, climate change, and crop disease to avoid an impending crisis.
The chocolate industry has dark origins and remains fundamentally unsustainable. It emerged from pre-Columbian South America to become a highly profitable plantation crop built on cheap colonial labour in the 18th and 19th centuries. In the 20th century the plantation industry collapsed with independence for many cocoa producing nations. Cocoa is now grown mainly by smallholder farming families, most of whom earn less than $US2 a day.
Historical trends have shown that price booms such as the current one, whereby cocoa bean prices quadrupled in just a few months, are inevitably followed by busts. Price volatility discourages investment in productive smallholder farming, frustrates support initiatives designed to provide living incomes, and hinders development of profitable modern, large-scale cocoa farming businesses.
Uncertainty drives opportunistic farming practices, poor management of crop disease and soil fertility, and low yields. Some farmers try to compensate by planting more cocoa, often cutting down protected forests. Other farmers abandon cocoa for more dependable and profitable crops such as oil palm. On-shore processing and value-adding by producer countries exacerbates the shortage of raw cocoa beans for export to, and processing by, the countries that make most of our chocolate.
There is an emerging global consensus that improving agricultural productivity and alleviating rural poverty, including in the cocoa supply chain, must be linked to developments in other sectors such as health and education. The lack of basic services for cocoa farming communities’ limits productivity and incomes. Under-nutrition has reduced farmers’ physical capacity due to illness, fatigue, and other health related problems. Children fare poorly at school and household resources are drained by increased healthcare costs and the time away from the farm required to access, often distant, medical care. When the labour required to manage cocoa trees is not available, children may be obliged to work, compounding the cycle of poor education, poverty and malnutrition. What labour is available tends to be used for more profitable endeavours like oil palm, or activities that can cause further environmental destruction, including mining and forest clearing.
What can chocolate lovers do to avoid further catastrophe? It comes down to being prepared to pay a bit more for your chocolate. As with many foods, the raw materials cost only a few cents in the retail dollar and supply chain costs consume the rest. it has been estimated that a stable price of $US 4,000 a tonne is the minimum required to provide cocoa farmers with a living income. This should not alarm consumers, but would significantly reduce poverty and fund basic education and health programs in remote rural farming communities. If cocoa farmers have sustainable living standards, they will be more inclined to invest in sustainable long-term production. That gives chocolate lovers all the more reason to relish their favourite treats.
Another bust, which is likely if the economics of cocoa bean farming don’t change, would further erode confidence, trap farming families in ongoing poverty and threaten long term chocolate supplies. That’s not a palatable scenario for anyone.
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