Ghana supplies approximately one-fifth all cocoa beans. It earns around $2 billion annually, less than one-fifth of the value of chocolate sold.
He said that chocolate is a $100 billion industry, and the 65% who produce it make less than $6billion from the sweat and tears of their farmers. This refers to the combined sales of Ghana (and Ivory Coast) together. He asks what prevented these two countries from making more money by turning beans into cocoa liquor, cocoa butter, or producing finished chocolate bars.
In practice, Ghana and Ivory Coast have struggled to extract more profits from an industry that retains most of its added value close to the Western consumer markets.
The chocolate industry is accused of doing more than just keeping its adult farmers poor. Mars, Nestle, and Hershey signed an agreement in 2001 to eliminate child labor from their supply chain in Ghana and Ivory Coast, where the problem is at its worst.
The U.S. Labor Department discovered that children who work on cocoa farms, some of them carrying heavy sacks, wielding machetes, and spraying pesticides, have increased to 2.1million. Since then, the industry has agreed to a lower-ambitious target of reducing child labor by 70% by 2020. It is likely to fail, according to most observers.
As if this weren’t enough, cocoa farming has been linked to widespread deforestation in Ivory Coast. The country’s cocoa production nearly doubled in the past decade, as farmers cleared new forest land.
After years of discussion, African governments are taking action to increase their leverage in the chocolate sector. Ivory Coast and Ghana unilaterally announced a $400 per ton premium over the benchmark futures prices starting in October 2020. Mahamudu Bawumia (Ghana’s vice president), said that OPEC controls only 30% to 40% of global oil supply. They also control prices. “If they have OPEC we can have COPEC.”
Producer countries might be trying to extract more value from chocolate, which could seem to be driving them into a collision with the industry. According to business logic, manufacturers such as Nestle or Ferrero and trading houses like Cargill and Olam aren’t willing to pay more for ingredients.
However, the rhetoric from Africa is in many ways similar to that of the chocolate industry.
