cocoa
barometer

2020

Index
1. Introduction — 6
2. General Developments — 10
3. National and Global Developments — 20
4. Industry Developments — 29
5. Living Income — 38
6. Human Rights — 54
7. Environment — 70
8. Enabling Environment — 86
Key Recommendations — 98
Justifications — 102
Colophon — 102
Bibliography — 106

cocoabarometer
2020

Antonie C. Fountain
Friedel Huetz-Adams

2

Processors

Barry Callebaut,
Olam, Cargill, etc.

Processing
Netherlands,
Germany,
U.S.A., etc.

Transport

Smallholder

Transport

Processing
Côte d’Ivoire,Indonesia,
Malasia, Ghana, etc.

Traders

Millions offarmers

Supply chain

Manufacturing
Mondelez,Mars, Nestle,
Hershey,
Ferrero,Lindt & Sprüngli,
etc.

RetailersAldi, Lidl,
Ahold,
Marks &
Spencer, Tesco,
Carrefour,Walmart, etc.

Cemoi, Sucden, Touton,
ETG - Beyond Beans ,Cargill, Barry Callebaut,
Olam, ECOM, etc

A few companies
and a few countries

Billionsof consumers

Scope and intentions of the Cocoa Barometer 2020

The Cocoa Barometer 2020 provides an overview of the current
sustainability developments in the cocoa sector and highlights criticalissues that are not receiving sufficient attention at present. It is an
endeavour to stimulate and enable stakeholders to communicate anddiscuss 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.
While previous Cocoa Barometers mainly focussed on social andeconomic issues such as living income, a stronger emphasis onenvironmental issues has been added to this edition. It will furthermore
explore the necessary enabling environment to achieve sustainability,
including the highlighting of the urgent need for policy regulations
based on Human Rights and Environmental Due Diligence. Cross-cutting
throughout this document are the observations that we are sorely lacking
both quality data and global collaboration to solve the challenges thesector faces.
The content of the 2020 Cocoa Barometer is the result of a lengthy
consultation within the Cocoa Barometer Consortium, written and oral
consultations with our partners from civil society and farmer basedorganisations in the global South, and with much data being collectedfrom cocoa and chocolate companies through an in-depth questionnaire.

3

The Impact of Covid-19

4

It is impossible to describe the current state of cocoa without
acknowledging the tremendous impact that the Coronavirus pandemic
has had on the sector. Although it is impossible to tell what the future
will bring, this Barometer attempts to look beyond the current situation,
towards a sector where things will have returned to ‘normal’. Our
problem analysis and recommendations are largely unaffected by
Covid-19. However, the pandemic has had some major impacts in the
short term, and a few longer term effects will also be felt.
Covid-19 has exposed existing weaknesses around health andwellbeing. Cocoa farming communities were vulnerable to health risks
already, with high rates of pre-existing health conditions as a resultof extreme poverty, lack of adequate nutrition, as well as insufficient
access to the most basic healthcare. Having said that, current data
does not suggest that the pandemic has had a significant direct healthimpact - or at least, not a reported one - the reasons for which falloutside the scope or expertise of this Barometer.
Nevertheless, there have been several effects for cocoa farming
communities globally, including an increase in the costs of daily living,for farming inputs, and for health care services (FCCI 2020). The closingof schools - although it was an understandable measure - put children
at risk of exposure to child labour, even if temporarily. There has also
been a marked decrease of the world market price, partly driven by areduced demand for chocolate due to the pandemic. In that light, thetiming of the introduction of the Living Income Differential in Ghana
and Côte d’Ivoire has been very fortuitous. Though data is scarce, it issuggested that many farming communities saw a loss of current andfuture sales, payment delays, and experienced many other financial
consequences.
For the longer term, the global recession caused by all the lockdowns
and restrictions is expected to keep chocolate demand lower thanoriginally expected, in a market that already was dealing with astructural oversupply of cocoa. This will cause downward pressure
on global prices, with all the ensuing effects for farming households
already in dire poverty.

The cocoa and chocolate industry has responded to the crisis on
several levels. Some companies made use of their supply chaincommunications to inform farming communities on important publichealth announcements, using farmer communication systems, radio
broadcasting, texting, even calling farmer cooperatives. Additionally,
the sector put forward emergency relief, both in kind - distributing
soap, buckets, water, and food) and in cash to cross-commodity relief
funds such as the Red Cross, Care and the World Economic Forum’s
relief fund. Whether the funds and goods have been spent as promised
is not clear at the time of writing. Transparent reporting on the
spending and impact of the emergency relief is much needed in the
coming months, also so that lessons can be learned for future waves ofthis and other potential pandemics.
At the outset of the pandemic, the cocoa sector restricted travel. Expat
employees were pulled back to the global North, sometimes leaving
value chains under-served in producing nations. All major cocoa
conferences and meetings were cancelled or postponed. Online
conferencing tools have become ubiquitous in the sector, almost toa point of overkill. However, online meetings - whether in plenary or
bilaterally - are no substitute for the relational character of much of theinteraction that was taking place prior to the pandemic. Over the past
years, that relational dynamic has enabled a dialogue between actorsthat has made cocoa a unique sector, willing to engage issues andstarting to move towards essential solutions. If cocoa is to continue inthis constructive atmosphere, solutions are going to need to be foundon how to strengthen the relational aspects in a digital era.

56

1. IntroductionAfter two decades of failed interventions across the cocoa sector, cocoa
farming communities are still battling the effects of poverty, child labourand deforestation. The 2020 Cocoa Barometer report is a rallying call toaction for all stakeholders to push forward and deliver on their promises
to end deforestation and human rights abuses in cocoa supply chains.
Twenty years into rhetoric, the challenges on the ground remain as large
as ever. Poverty is still the daily reality for virtually all West African cocoa
farmer families, child labour remains rife, and old growth forests continue
to be cleared to make way for cocoa production.
Now is an important window of opportunity to move towards justice, as
momentum for change is gathering across different stakeholders. Thanks
to campaigning NGOs, the last two years have seen an increasing numberof chocolate companies asking for regulation; significant global actors
like the European Union are committed to putting legislation in place; andthe world’s two largest producers of cocoa, Côte d’Ivoire and Ghana, haveformed a partnership to drive up the price for cocoa farmers.
But to seize this moment, it is vital that the sector learns from its mistakes,
else it risks repeating them. This report finds that the last two decades ofinterventions have failed for three main reasons.
Firstly, efforts have only been voluntary, not mandatory, meaning thatacross the sector, actors are failing to do what they need to. Within themultitude of government-driven covenants, national multi-stakeholder
platforms and sector-wide collaborations, there are no penalties for
non-compliance, neither is there enforcement to meet targets. Ironically,
however, those at the bottom – cocoa farmers often living below thepoverty line – do lose their sustainable cocoa certification if they do
not comply. Whilst we’ve seen a significant increase in regulatory
processes and commitments to due diligence, they are limited without
accountability, transparency and equitable enforcement.
Secondly, whilst bad farming practice has been addressed, the underlying
problems that exacerbate extreme poverty – including low cocoa prices,lack of infrastructure, and no transparency and accountability as you movehigher in the supply chain – remain unchallenged and unsolved. There7needs to be recognition that in its current form, the business model forhigh yields of cocoa means poverty for farmers and excessive profit for
chocolate manufacturers. It’s time this changed.

8

Thirdly, efforts to solve complex issues of injustice and unsustainability inthe cocoa sector have not been inclusive or holistic enough. Instead ofinviting farmers and civil society to take a respected seat at the decisionmaking table, problems have been assessed using a top-down industrybased approach. This serves the interests of industry and government,
rather than the producer farmers and their communities.
Acknowledging how previous interventions have failed points us toalternative pathways that can put an end to deforestation, poverty andhuman rights abuses in cocoa supply chains. The report makes three key
recommendations:
Regulation that changes the system, rather than penalising the farmers

Recognising that bad farming is not the problem but rather a symptomof a deeply unfair system, the report advocates for systems change
and regulation that creates an enabling environment. Current forms ofcertification and farm-based standards increase pressure on farmers:
instead, we need laws that hold the powerful accountable, rather than laws
which demand that farmers change. Compliance criteria are imbalanced
and need restructuring so that companies are held accountable to due
diligence systems.
Effective partnerships between producer and consumer countries
If the answer is creating an enabling environment, we need partnershipagreements between producer and consumer countries that facilitate andfinance this. Processes that set partnerships in motion should be inclusiveand deliberative, ensuring that civil society and farmer groups have arespected voice at decision-making tables. Data collected in the sector
must be shared with farmers and their organisations to ensure informed
decision making is possible.
Deliver on a fair price for farmers
The single biggest positive impact for farmers and incentive for farming
sustainably is delivering a fair price for the cocoa they produce. Cocoa
and chocolate companies must find ways to redistribute value along the
supply chain so that farmers are guaranteed a living income.

Challenges in the Cocoa Sector

9

Human
RightsEnvironmental
Protection
Poverty &Malnutrition
Child Labour& Human Trafficking

LivingIncomeLabour Rights& Safe Working Conditions
Lack of Education& Healthcare

Low Farm
Gate Prices
Low Yields
High Risks

Deforestation& Degradation
Loss of biodiversity
High use ofagrochemicals
Climate Change

10

2. General Developments

Many efforts, little impact

The cocoa sector has been through a dynamic few years. Producer
countries have started to flex their muscles in order to drive up theprice of cocoa. Companies increased the roll out of their sustainability
programmes, either jointly or individually. And there is a distinct shift
towards regulation across the consuming world, demanded by civil society
and supported in some countries at least partly by both governments andcompanies. Companies from the cocoa sector were front-runners when
they published statements in 2019 and 2020, challenging governments toregulate them.
A travelling circus of global cocoa conferences and dialogues createsrecurring opportunities for decision makers and thought leaders inthe sector to exchange ideas and align on issues. Not only has theconversation started to include more of the relevant actors, it has also
become more constructive, looking for solutions and acknowledging
challenges, where problems were previously denied or downplayed.
Nonetheless, many companies still act without aligning their efforts
with competitors. Furthermore, the sector still focuses on productivity
increases, without presenting data that higher yield would lead to higher
net income, while increasing farm gate prices is still absent from thesector’s toolkit.
Despite two decades of sector-wide efforts, interventions, an increasing
dialogue and inclusion, the challenges remain as large as they have everbeen. Poverty is still a daily reality for most smallholder cocoa farmers.
Child labour is still rife throughout West Africa. Old-growth forests arestill being cut down for cocoa production. Gender inequality remains therule rather than the exception in many cocoa growing regions. Farmer
empowerment often does not go further than being able to decide what
the small premium is spent on.
Among this all, truly holistic approaches are missing. Most programmes
and initiatives deal with single problems, and approaches that
acknowledge and tackle the interconnectedness of the various challenges
are largely absent. Poverty interventions are often insufficiently integrated

11

into deforestation measures, child labour approaches look at either the
supply chain or the communities, programmes to increase productivity
do not reflect the increasing price pressure coming from producing morecocoa, the list goes on. The root causes as well as many of the solutions tothese issues are deeply intertwined.
12

Concentration in West Africa; cocoa follows poverty

In the last thirty years, global production of cocoa has doubled, almost
all of this coming from four West African countries (Côte d’Ivoire, Ghana,
Cameroon, and Nigeria). During these three decades, production inWest Africa rose from 1.37 million tonnes to 3.47 million tonnes. While
production in this region almost tripled, the production in the rest of theworld remained largely stable. As a result, the market share of the big fourWest African cocoa producers increased from 55% to 74% in these years.
The dependency for bulk cocoa on West Africa is even higher than thesefigures suggest. Some Latin American countries produce mainly fine or
flavour cocoa – roughly 10% of global cocoa production – which is tradeddifferently than bulk cocoa. It also has a significantly different price. And– unlike in West Africa – local consumption in Latin America is significant;Brazil even imports cocoa beans to satisfy the appetite of its population.
According to statistics of the International Cocoa Organisation (ICCO),
domestic consumption of Central and South American countries adds
up to nearly 450,000 tonnes, only part of this fine or flavour cocoa. Some
producing countries in Asia, specifically Indonesia, also have a significant
domestic consumption (ICCO 2020a).
As such, the dependency of the global cocoa industry on West Africa
for bulk cocoa is well above 80%. It is in these ‘bulk cocoa’ producing
countries that we see the major challenges come into clear focus;
extensive deforestation, child labour and other human and labour
rights transgressions, fuelled by the poverty of the majority of farmers,
and driven by weak rural infrastructure, a lack of transparency andaccountability, and sometimes corrupt and inefficient government
interventions.
Bulk cocoa is concentrating increasingly in West African Countries with alow Human Development Index score. Other countries with the potential
to produce significant amounts of cocoa either leave the market (asMalaysia has already done and Indonesia is doing presently), neverenter the market despite programmes to increase cocoa production (asGrowth of Cocoa Production in the top 8 Producing Countries

2130 Côte d’Ivoire

2130 Côte d’Ivoire
13

802 Ghana

Ghana
802Nigeria
250
290 Cameroon

17/18
17/18
estimate 18/19
estimate 18/19
forecast 19/20
forecast 19/20

16/17

328 Ecuador
125 Peru
190 Brazil

16/17

15/16

15/16

14/15

14/15

13/14

13/14

12/13

12/13

11/12

11/12

10/11

10/11

05/06

05/06

00/01

00/01

95/96

95/96

90/91

90/91

220 Indonesia
Nigeria
250Ecuador
328
Cameroon
290Peru
125
Brazil190
220 Indonesia

HDI - index

Country

Growth 1990 — 2020

HDI - index

Côte d’Ivoire
Country
Ghana

Growth 1990509— 2020

Nigeria
Côte d’Ivoire
Cameroon< 0,60,6-0,70,7-0,8
> 0,8

175

Ghana
Indonesia
Nigeria
Ecuador50
90217

Ecuador

217

Cameroon
Peru
Indonesia- 178
Brazil< 0,60,6-0,70,7-0,8
> 0,8

90

Peru
Brazil

1,326

1,326
509

175
114
50
114

- 178Countries ordered by Human Development Index.

happened in Vietnam), or concentrate on high yielding varieties and fineor flavour cocoa (as Ecuador and Peru are doing).

14

The business model of bulk cocoa is poverty; because bulk cocoa farming
pays so badly, it is only attractive to the poorest. Sourcing bulk cocoa ascheaply as possible leads to price pressure on smallholders - who haveno influence on prices and are mostly not organised. In the meantime,at the top of the pyramid, multinational chocolate manufacturers, cocoa
processors, traders, and retailers earn billions of dollars a year to feed
consumer’s need for a product of pleasure.

Regulatory approaches on the riseChild labour, forced labour and discrimination are illegal in all cocoa
producing countries in West Africa. The same is true for destroying
protected forests. Despite this, cocoa grown under illegal circumstances
still finds its market. A major reason for this is because it is not prohibitedto profit from human rights abuses and illegal deforestation in cocoa
consuming countries.
So far, all of the current developments are unfolding along linesof voluntary approaches, from government-driven covenants andnational multi-stakeholder platforms, certification and company-ownedsustainability programmes trying to look like certification, through tosector-wide collaborations on deforestation and child labour; there areno penalties in the case of non-compliance, and targets and deadlines
can be missed with impunity. Certified farmers, on the other hand, lose
their certification - and the market access and premiums coupled tothe certification - if they do not comply, once again underscoring theunbalanced distribution of risk and responsibility in the supply chain.
In short; many of the problems have not been solved because they didn’t
have to be.
The past two years, however, have seen an increasing willingness toconsider regulations, from both the government side as well as from thecocoa and chocolate companies themselves.
National regulations
In 2017, the French government was the first country to adopt a Due
Diligence regulation – the so-called Devoir de Vigilance law. The Dutch
followed in April 2019 with the Wet Zorgplicht Kinderarbeid, a duty of carelaw on child labour, expected to be in force by 2022. In the meantime, abroader Due Diligence law has been introduced into Dutch parliament,
although it has not passed yet. The call for national regulations in othernations is growing as well.
Although the Swiss Konzernverantwortungsinitiative (‘Responsible BusinessInitiative’) which sought to introduce a broad mandatory human rights
and environmental due diligence achieved a popular vote majority
in a November 2020 referendum, it failed to pass the constitutional
requirements to be implemented. This means that a counterproposal
will go into effect, which includes mandatory human rights due diligenceon child labour and conflict diamonds, as well as a reporting obligation,
however it misses liability for multinationals. A similar call in Germany for a“Supply Chain law” by the Initiative Lieferkettengesetz has been launchedin 2019 and is gaining momentum. Existing national regulations ontransparency – such as the UK Modern Slavery Act, the California Supply
Chain Transparency Act, and the Australian Modern Slavery Act – havemade requirements for transnational corporations to report on forced
labour and human trafficking in their supply chain. Though not going as far
as due diligence regulations, transparency is an important step in starting
to solve a range of issues in the supply chain.
Transnational regulations
The European Union is looking at options to add regulatory approaches
to its current largely voluntary approach to sustainability in global supply
chains. A process assessing a regulation on deforestation is in advanced
stages, and a broader due diligence regulation is being consideredaround human rights and environmental concerns. The Commissionis also launching an initiative on sustainable corporate governance.
Simultaneously, Commission officials are starting to look at ways tostrengthen bilateral agreements with cocoa producing countries, adding a
mix of possible interventions to a demand side regulation.

At an even more global level, debates around the UN Binding Treaty on
Business and Human Rights are continuing. However, progress is slow, as
many Western nations – including member states of the European Unionand forces within the European Commission – continue to block significant
measures, with the EU not even participating in the negotiations.
Corporate support
One of the major developments regarding regulatory approaches forthe cocoa sector is the shifted attitude of the industry itself. Several of
the largest cocoa and chocolate companies have called for an EU due
diligence regulation, and also the European umbrella associations for15

cocoa (ECA) and chocolate (Caobisco) have issued statements supportinga due diligence regulation.

16

Industry support for regulation is due to several reasons. Firstly, theprinciples of due diligence, outlined by the OECD (see page 90-91)
provide a level of clarity and certainty. Secondly, a mandatory regulation
would level the playing field, requiring all competitors to operateaccording to the same principles; corporations could no longer compete
through facilitating, committing or ignoring human rights abuses orenvironmental degradation. Thirdly, it would allow for more impact
through higher ambitions and more joined efforts.
Unresolved issues around regulatory approaches
Though it is too early to be able to qualify the impact of due diligence
regulations, they are an important step forward. Existing transparency
laws have already led to changes, both in corporate reporting and on the
ground. Enforced due diligence regulations – if drafted and implemented
properly – can lead to even more positive changes in the cocoa
sector. There can be a strong complementarity between national andtransnational regulations, and the interplay between these two should not
be an excuse to not get started on either.

Considering the above, it will be essential that when these regulations
do get developed, they are based on the UN Guiding Principles on
Business and Human Rights and the OECD Guidance for Responsible
Business Conduct, and that they are enforced according to best practices.
Regulations should be developed on a cross-commodity basis, andshould pertain to all human rights and environmental protection. At thesame time, it will be essential to ensure that cocoa-specific guidance isprovided.
Additionally, incentives need to be found to ensure producing
governments accept demand-side regulatory interventions. These
incentives will likely be found through a combination of developmental
support and bilateral agreements aimed at strengthening national
agricultural policies, transparency, law enforcements, land and forest
management, and child labour interventions, among others.
Lastly, any due diligence regulation should not be an extra burden forfarmer cooperatives and farmers, but should put the burden where thepower lies at government and corporate level.

Farmer organisation and local Civil Society
Organizations

Over the past two years, local civil society organizations in producing
nations have increasingly taken part in the political dialogue in the cocoa
sector. In order to strengthen their voices in the political dialogue, in
Ghana the Ghana Civil Society Cocoa Platform was founded in 2019. This
platform - an alliance of 18 farmers’ organizations, non-governmentalorganizations, trade unions and the media - is mutually coordinated by
SEND-Ghana and EcoCare Ghana. In Côte d’Ivoire, too, a civil society
working group with 22 member organizations from NGOs and farmers’organizations coordinated by the Ivorian NGO INADES-Formation
has been formed. Both networks bring together expertise on social,ecological and economic challenges in the cocoa sector. The networks
are particularly powerful not only because of the strategic alliance
between NGOs and farmers’ organizations, but also because of their
good networking with other global actors such as non-governmentalorganizations and in the consumer countries.

Availability of data

Previous Cocoa Barometers have often stressed the need for publicly
available, recent, and reliable data on topics such as farmer income,production costs, and child labour. In that light, there is a positive trend ofresearch being published on topics such as farmer income and impact ofcertification. However, it is striking that much of the available information
has been collected and shared by NGOs and development organisations,while many major companies collect comprehensive sets of data without
publishing them. Some of these data sets have started to circulate in the
sector, however this data is leaked and not published, and therefore often
cannot be used in the public discourse.
Despite decades of debate about productivity, field size and production
costs, the industry still does not publish reliable data, and somecompanies do not even collect precise figures. The cocoa sector will not
be able to know whether efforts are sufficient to tackle the challenges it
faces until the size of the problems is clear.

17

Summary

18

Despite two decades of sector-wide interventions and increasing
dialogue, the challenges facing the cocoa sector remain as large as they
have ever been; extensive deforestation, child labour and other humanand labour rights transgressions are the order of the day, fuelled by
the poverty of the majority of cocoa farmers, and driven by weak rural
infrastructure, a lack of transparency and accountability, and sometimes
corrupt and inefficient government interventions. Cocoa grown underillegal circumstances still finds a market because it is not prohibitedto profit from human rights abuses and illegal deforestation in cocoa
consuming countries. The past two years, however, have seen increasing
support for mandatory human rights and environmental due diligence
regulations, from both the government and corporate sides. Furthermore,
local civil society organizations in producing nations have increasingly
started to take part in the political dialogue in the cocoa sector. Despite
this progress, the industry still does not share data essential for assessing
sustainability approaches.

19

20

3. National and			
Global Developments

The past years have seen a wide range of efforts and developmentsin the cocoa sectors, at joint and individual levels, from governments,
corporations and civil society including farmer’s organisations.
A partnership of cocoa producing nations to increase prices at the world
market has been formed, multistakeholder collaborations are underway
or being started on deforestation and child labour, and a series of global
cocoa conferences and meetings allows for unprecedented dialogue andshared learnings.
However, what is missing in these efforts is an alignment andacknowledgement of the interrelated nature of the challenges we arefacing. At the same time, none of the efforts come close to the scale of the
problems they are facing so far, and most don’t stray far from “business as
usual”. A whole lot more needs to be done, in a far more holistic way.
Production / Consumption
Cocoa production in 1,000 tonnes 2019/20 (forecast)
Domestic consumption of cocoa in 1,000 tonnes 2018/19
Source: ICCO 2020, Table 2, 40

1,922
348

Rest of
Americas

1,164

816
USA

376

Rest of
Asia

Europe

779

169
666

188

3,598

Brasil328

Ecuador

849
331

Rest of
Americas190

Brasil2,130

Côte d’ Ivoire

Rest of
Africa

802

Ghana

51

India

183

Japan

86

83 China
Australia

200 277

Indonesia

77

Rest of Asia

21

Developments in producing nations

22

Ghanaian-Ivorian partnership
Côte d’Ivoire and Ghana remain by far the most important cocoa
producing countries. After a steep increase of production in Côte d’Ivoire
a couple of years ago, harvests have stabilised at roughly 2.1 million
tonnes, while Ghana adds another 800,000 tonnes. Together, they
produce more than 60% of the global cocoa harvest.*

One of the most significant developments in cocoa production in thepast years has been the Ghanaian-Ivorian partnership on cocoa. From
Presidential level downwards, the two largest cocoa producing nations
have started to align their internal and external cocoa policies.
In the third quarter of 2019 the Ivorian Conseil du Cafe-Cacao (CCC) and
the Ghana Cocoa Board (Cocobod) started charging the so-called Living
Income Differential (LID), an extra fee of $400 per ton of cocoa on top offorward sales for the 2020/21 main crop. Subsequently, in October 2020,
Ghana increased the guaranteed cocoa farm gate price for the 2020/2021
season by 28% to $1,837 per tonne, and Côte d’Ivoire by 21% to $1,840.
This historic initiative is an important and necessary step in order toimprove the income situation for farmers: higher prices for farmers arean essential – and often overlooked or even denied – aspect of every
sustainability strategy. Apart from the obvious role that companies have,governments must set the stage for a sustainable cocoa sector by creating
price stability at a level that allows farmers to achieve a living income.**Moreover, price interventions should be part of a coherent strategy torespect the human rights of farmers and to protect forests. Intervening
on price without looking at supply measures and enabling policies todevelop a healthy cocoa sector may not have the desired positive impact
in the long term. This requires careful policy management, which CCC andCocobod must undertake, beginning with setting up the long-awaited“joint monitoring mechanisms” on deforestation, as promised in 2017 at
the launch of the Cocoa and Forests Initiative.

* All production figures are based on ICCO statistics. All latest figures
come from ICCO 2020b** The current guaranteed prices are much lower than even the most modest calculations available on the farm gate price needed to make a living
income, see the chapter on Living Income.

So far, the Ivorian and Ghanaian governments and marketing boards havetaken a very proprietary stance to the development of policies aroundtheir partnership. Discussions have not been very open to other actors,
including other producing nations, farmer-based organisations, local
and global civil society, cocoa and chocolate companies, or internationalorganisations such as the ICCO.
The strategy to not negotiate the Living Income Differential in a long multistakeholder-discussion, was a powerful step forward to increase the farmgate-price. However, for this ambitious plan to succeed, collaboration andinclusive dialogue are going to be necessary. Keeping other stakeholders
out of the conversation would be a dangerous and counterproductive
development.
Cameroon and Nigeria
Production in Cameroon rose significantly in the past five years, from
220,000 to 290,000 tonnes in 2019/20. Increased production can leadto concerns, as the country has a lot of untouched primary forest in theCongo Basin, some of which is at risk of being transferred into cocoa
plantations. Some conversion of land is already happening, partly in theform of agroforestry systems.

In the meantime, Nigerian cocoa production has remained stable
for a decade at roughly 240,000 tonnes per year. Despite regularannouncements by the Nigerian government on major investments in thecocoa sector, farmers complain about the lack of support to increase theirincome.
Latin America
While cocoa production in Brazil, the Dominican Republic and Mexico has
remained stable, significant expansion of cocoa production is happening
elsewhere in Latin America. Ecuador’s harvest grew - in just a decade from less than 200,000 tonnes to 325,000 tonnes in 2019/20. Support
measures coordinated by the government help farmers to invest in higher
productivity and high-quality cocoa. A similar development has takenplace in Peru, where cocoa production doubled to 130,000 tonnes. Beside
government efforts, significant investments of development cooperation- specifically from the cocoa for coca programme run by USAID as part ofthe ‘war on drugs’ - help farmers to expand cocoa production. Expansionof cocoa production in Ecuador, Peru and Colombia is cause for concern,
as it might lead to deforestation and forest degradation of some of the lastremaining major rainforests in Latin America. Despite these production
increases, Latin American cocoa production is very modest compared toWest Africa.

23

24

South East Asia
Ten years ago, Indonesia published plans to become the biggest cocoa
producer in the world. However, despite government programmes toinvest in the sector, production halved in 10 years to 200,000 tonnes in
2019/20. Many Indonesian cocoa farmers have left the sector due to low
earnings. Some have found other income sources in the agricultural sector
e.g. by planting palm oil, others have left agriculture and the countrysideentirely for the booming cities. Meanwhile, cocoa production in Papua
New Guinea and India remains stable at relatively low levels.

Global Platforms
International Cocoa Organisation (ICCO)The International Cocoa Organization is the global organisation thatbrings representatives of cocoa producing and cocoa consuming
countries together. Government representatives form the Council ofthe ICCO, with civil society and industry representatives forming a
Consultative Board that can provide input to the Council.

Over the past years, the ICCO has gone through major changes. A moveof its headquarters to Abidjan from London, a new Executive Director,
and a significantly changed staff are providing this organisation theopportunity to refresh its vision and mandate. It has recently adopted astrategy with living income at its center.
Despite repeated attempts, the ICCO-led Global Cocoa Agenda- a roadmap for a sustainable cocoa sector including roles andresponsibilities per stakeholder group - has failed to materialise due to alack of political will by its members.
The ICCO is well placed to provide an important platform for the cocoa
sector - including farmer based organisations, civil society and industry
players - to engage in policy dialogue with producing and consuming
governments. The challenge is now to ensure that it remains a place where
meaningful sector-wide engagement can take place.
World Cocoa Foundation (WCF)
The World Cocoa Foundation, the global umbrella organisation for
chocolate and cocoa companies, has had a lot of responsibility riding
on its shoulders. As the convenors of CocoaAction (a voluntary strategyaligning the world’s leading cocoa and chocolate companies aroundproductivity increase and community development) and co-convenors

of the Cocoa and Forests Initiative (CFI, see below), the WCF is theplace where much of the industry’s collaborative efforts comes together.
However, with the inability of CocoaAction to significantly drive impact
at scale, and with modest impact to show for so far at CFI, the pressure ison the WCF to engage in sector-wide efforts that will lead to holistic andambitious changes.
Other actors, especially civil society and farmers, have had very little input
into the operation and future design of CocoaAction especially, but also of
CFI. This has resulted in a considerable bias of solutions towards industryfavoured approaches. Moving forward, a more inclusive and multistakeholder approach is essential.
It would be advisable for the WCF to move from being the advocate of theindustry’s interest to serve as a catalyst towards its members, urging themto higher ambitions and quicker action, rather than attempting to temper
other actors’ expectations towards the cocoa and chocolate industry. The
long-held industry position that agronomic solutions aimed at increasing
productivity and diversifying income will improve farmers’ livelihoods isgradually being complemented with support for systemic change, albeit
at a slow pace. Such support should be aimed at increasing transparency
and accountability, supporting regulatory measures to protect humanrights and the environment, and increasing farm gate prices so that they
are sufficient to earn a living income.
Cocoa and Forests Initiative (CFI)
In 2017, the global cocoa sector announced a new platform against
deforestation, the Cocoa and Forests Initiative - co-coordinated by the
WCF and IDH Sustainable Trade Initiative. This platform of industry, major
donors, and producing governments (currently only Ghana, Côte d’Ivôire,Cameroon and Colombia) aims to provide a common framework to tackle
deforestation.

It is good to see individual companies rolling out plans. With CFI now
several years in, deforestation is starting to slow down, although theremaining forests in West Africa continue to be threatened. National
traceability platforms that were promised are behind on schedule. It
is striking that the biggest step in transparency on deforestation - acrowdsourced traceability map, linking deforestation with cocoa
production - has been published by Mighty Earth, an NGO.
The implementation at national level is also running into snags, withinefficiencies and conflicts between ministries in producing nations

25

26

causing major delays in roll out. Additionally, though deforestation incocoa is global, CFI confines itself to national signatories. Cocoa has beenfound to be a driver of substantial deforestation in Indonesia, Cameroon,
Ecuador, Peru, and beyond. Whereas there is not a lot of rainforest left tobe cut in Côte d’Ivoire or Ghana, the Congo and Amazon basins are verymuch at risk, as are the rainforests of South-East Asia. A global moratorium
to deforestation, coupled with a global ambition of CFI should be theirfirst next steps.

National cocoa platforms in consuming nations

In Europe, national cocoa platforms have started to develop in a varietyof shapes; the Forum Nachhaltiger Kakao, or German Initiative on
Sustainable Cocoa (GISCO) in Germany, the Swiss Kakao Plattform (often
called Swissco), the Belgian Beyond Chocolate, and the Dutch Initiativeon Sustainable Cocoa (DISCO, which has superseded the earlier Dutch
Declaration of Intent on Sustainable Cocoa), with initial conversations
starting to take place in France and Japan as well.
Notably absent in this list are the United Kingdom - a major cocoa consuming and processing country - and the United States, where there islittle to no collective movement on sustainability in cocoa. Unlike their
European counterparts, the American and English cocoa sectors have notsucceeded in finding multi-stakeholder dialogue platforms bringing companies, civil society, and government agencies together at national level.
While for a long time the sustainability aims of these platforms were only
addressed by sourcing certified cocoa, in some countries the platforms
are now starting to develop more holistic ambitions around living income,deforestation and child labour. These ambitions are not yet translating into
concrete actions, however.
Several weaknesses remain, including the voluntary nature of all theseplatforms; sanctions are not envisaged, creating a real risk of free riders
using the platform. Additionally, the various platforms might lead to arace to the lowest common denominator, with every nation being playedout against each other by some industry actors trying to ensure targets
are not more demanding than the other nations. Though first steps arebeing taken to align the goals and activities between the platforms, there
is a clear need for closer alignment and leveraging of joint influence at a
European level, leading to ambitious goals with clear timeframes. Thoughliving income is part of the objective in most of these platforms, a sectorwide commitment to living income is sorely missing.

Living Income Community of Practice (LICOP)
and Alliance for Living Income in Cocoa (ALICO)

The Living Income Community of Practice is a multi-stakeholder andcross-commodity initiative, organising information exchange on how
to define, measure, and implement a living income. Jointly hosted by
the Sustainable Food Lab, GIZ and the ISEAL Alliance, it brings together
NGOs, companies, researchers, and standard setting organisations.
By now there is broad acceptance of the Anker Methodology as a baseline
to calculate a living income, the discussion is now largely about how toachieve living income. One of the main problems is the lack of reliabledata on many relevant variables, including farm size, productivity, yields,
diversification levels and living conditions of cocoa farming families. So far,the Community has not succeeded in becoming a platform to exchange
data which could lead to a better-informed discussion about potential
ways to increase farmers’ income. Even companies who are actively
engaged in the discussions do not share most of their data.
The Alliance for Living Income in Cocoa (ALICO) is a multistakeholder
forum bringing together the national initiatives and various otherplatforms. Initial ambitions to come to a sector-wide commitment toachieving a living income have disappointingly been toned down toalign strategies and identify gaps in approaches towards living income.
The Alliance should start speaking out more ambition, bringing together
frontrunners to lead the way. A sector-wide commitment to living income
should be the objective of such a collaboration.

Summary

Collaborations to drive sustainability in the cocoa sector are being
developed at a variety of levels. Côte d’Ivoire and Ghana - together
producing more than 60% of the global cocoa harvest - have implemented
a $400 per metric tonne fee - the Living Income Differential (LID) - thereby
raising farm gate prices by 28% (Ghana) and 21% (Côte d’Ivoire). This is an
important step, though concerns remain at the lack of inclusion of otherstakeholders in the development of these plans, including other cocoa
producing governments, farmer organisations and civil society.
Pre-competitive industry collaborations are becoming morecommonplace. Initiatives on productivity increase and community
development and deforestation are in various stages of implementation,although they have shown little impact so far. National multi-stakeholder
platforms have been developed in several major cocoa consuming

27

countries, outlining national ambitions for sustainable development of thecocoa sector. A weakness of all these collaborations are their voluntary
natures, and the lack of consequences if ambitions are not met. Thoughliving income is becoming more part of the debate in cocoa, a sector-widecommitment to living income is sorely missing.
28

4. Industry Developments** In previous Barometers, company developments and standards andcertification were dealt with in separate chapters. As they are so intertwined, and together form the cocoa and chocolate industry, they havebeen merged into one chapter. Furthermore, unlike earlier editions of
the Cocoa Barometer, the questionnaire sent to traders and grinders
this time did not focus on the percentage of certified or verified cocoa,
as we do not believe this should be the key performance indicator for
progress on sustainability. Instead, companies were asked how much of
the cocoa they use is traceable to the cooperatives/farmer organisations
and even to farm level.

29

Traders and processors: high market concentration

30

The trading and grinding companies in the cocoa sector have retained
their massive scale, and in some cases even increased their cocoa
tonnages. Though cocoa traders often work with smaller profit margins
per tonne, they compensate this by trading in very high volumes. A small
group of companies dominates the market; each sourcing from hundredsof thousands of farmers. The exact extent of the market concentrationin this part of the value chain is difficult to calculate, as there is a lot ofintertrading. However, it is obvious that the top six companies trade andprocess the vast majority of all cocoa handled on the world market. This
gives them an immense market power - over cocoa farmers - but also ahigh responsibility.
Most of the companies could report significant progress in the traceabilityof their cocoa sourcing. Cemoi is a front-runner and claims to be able totrace - to cooperative level - 100% of the cocoa bought, ETG – formerly
Cocoannect – traces 59% even to farm level. Of the large companies,
Olam and ECOM seem to have made the biggest progress concerning
traceability.
However, these figures include three major difficulties.
First of all, approximately half of the cocoa is still bought via indirect
supply chains and the involved companies do not know its origin.
Therefore, they do not know if the cocoa comes from illegal plantations inprotected areas or is connected to human rights abuses.
Secondly, the definition of traceability differs from company to company.
While some companies rely on verification by standard-settingorganisations, others are setting up their own projects based on their own
traceability checks, often combined with polygon-mapping of the cocoa
farms. This mapping gives a much deeper insight than the self-reporting ofcooperatives and farmer groups or the information collected by standardsetting organisations.
The third problem, explicitly mentioned by some of the companies in thequestionnaire, is that traders and grinders depend on the willingness of
chocolate producers to pay for extra efforts, including the setting up of a
traceable value chain.

Barry Callebaut2

Traders and Processors: Used Cocoa 2019 / Traceable to cooperative
1

33%

1,000

Olam

Callebaut2

1,028

Barry Callebaut2
33%
Olam

1,000

30%

828

Cargill30%

47%
Sucden2

Sucden2

Touton500

ToutonETG ond Beans
Cemoi

126
ETG Beyond Beans
59%
100

39%
62%

39%
Cemoi
126

440

210

Blommer440

ETG 210Beyond Beans
Blommer
39%

735

500
62%

34%

62%
Blommer

500
47%

34%
Touton

828

735
34%

Ecom

735

47%

30%
Sucden2

1,000

61%

Ecom

Ecom

1,028
828

61%
Cargill

61%

33%

Cargill
Olam

210

440

126

59%
100
100%

59%

Cemoi

100%

100
100%

used cocoa 2019 (1)traceable to coopusing ICCO
conversion
rates: cocoa butter 1.33,
used cocoa 2019 (1) used(1)cocoa
2019
(1)

traceable to coop

1,028

cocoa paste/liquor 1.25, cocoa powder and cocoa cake 1.18

traceable
to coop(2) using the reporting year 01/09/2018-31/08/2019

The authors also requested data on traceability to farm level, but the variance in answers coupled with a(1) using ICCO conversion rates:
cocoa
butter
1.33, rates: cocoa butter 1.33,(1) using
ICCO
conversion
lack of reliability in data means that we cannot provide that information.
cocoa paste/liquor 1.25, cocoa
powderand cocoa
1.18
cocoa
paste/liquor
1.25,cakecocoa
powder and cocoa cake 1.18
(2) using the reporting year(2)01/09/2018-31/08/2019
using the reporting year 01/09/2018-31/08/201931

Chocolate brands: diverse paths to sustainability

32

Different recipes and production lines lead to different approaches for thelarge chocolate companies. Chocolate brands are increasingly looking
towards traceability, being able to trace their cocoa to farm level between
44% and 100%. Some are trying to close the transparency gaps in their
supply chains through company projects.
While traders and grinders claim that they depend on the willingness ofthe chocolate producers to set up traceable value chains, some chocolate
producers complain that they are not able to get transparency in thebutter supply and partly also for cocoa powder because the grinders
refuse to become transparent. Though this argument would be plausible
for smaller chocolate companies, the large multinationals named in thischapter should have enough market power to impose transparency on
their upstream supply chain, although this would come at a price.
As with traders and grinders, company data is not comparable with eachother, as different interpretations exist on what traceability means. For
example, one of the companies reported low figures on traceability.
Unlike some other competitors they had reported only the percentagesof cocoa from their own projects, where all farmers are known by name,farms are localised by GPS and polygon mapped. Being told that othercompanies reported all certified cocoa as traceable, this company did thesame and the figure increased considerably. Without comparable data, it
is impossible to evaluate the potential impact of company programmes.
Therefore, much more transparency is needed.

Retailers

Including retailers in the global discussions about cocoa is a challenge,
as many are large players on a national or regional level, but not globally.
However, retailers play a crucial role for the efforts to increase thesustainability of the cocoa sector, for three reasons.
Firstly, they put a lot of pressure on chocolate producers, trying to get thelowest prices possible. This conflicts with the necessity to pay more forcocoa at farm level, and with the necessity to invest more in sustainability.
Secondly, more and more cocoa is sold as an own brand of the big
retailers. As such, they have become chocolate companies themselves.
In Germany, the biggest market in Europe, nearly a third of the chocolate
sales comes from retailers’ own brands. Thirdly, retailers - together withthe chocolate producers - get the highest part of the turnover of the whole
supply chain (Feige-Muller 2020).

51%

Mondelēz
ternational
Mars

63%

200

Hersheys2
400

100%

Chocolate Brands: Used Cocoa 20191/ Traceable to cooperative
51%

Hersheys2

Lindt undSprüngli
Ferrero200
Nestlé
100%
148
MondelēzInternational
56%

148

Lindt undSprüngli

414
56%

44%
Ferrero

135
400
81%

63%

135
Mars
81%

400
51%
200

Hersheys2

100%
Lindt undSprüngli
Ferrero

148
56%
135

used cocoa 2019 (1)81%traceable to coopused cocoa 2019 (1)(1) using ICCO conversion rates: cocoa butter 1.33,

traceable to coop(2) cocoa demand estimated, tracebility data for 2020

cocoa paste/liquor 1.25, cocoa powder and cocoa cake 1.18

The authors also requested data on traceability to farm level, but the variance in answers coupled with a(1) using
ICCO conversion
rates:that
cocoa
lack
of reliability
in data means
we buttercannot1.33,
provide that information.
cocoa paste/liquor 1.25, cocoa powder and cocoa cake 1.18
(2) cocoa demand estimated, tracebility data for 2020

As such, it is encouraging that in some countries retailers are increasingly
becoming part of the discussion and live up to their responsibility,
especially on national levels through the national cocoa platforms
usedcocoa 2019(1) have started sustainability
mentioned above. Several
individual
retailers
traceable
to actors
coop from further upstream inprojects, often in collaborationwiththe supply chain. Lidl’s “Way To Go” project with the Kuapa Kokoo
cooperative in Ghana and Ahold’s collaboration with Tony’s Chocolonely
for the Ahold Delicate
chocolateare1.33,
examples of how(1) using home-brand
ICCO conversion rates:
cocoa butter
cocoa
paste/liquor
1.25,
cocoa
powderandcocoa
cake 1.18sourcing.
retailers can start moving towards more sustainable cocoa(2) cocoa demand estimated, tracebility data for 2020
Another notable example is the German retailer initiative for living
income. The fledgling Retailer Cocoa Coalition, bringing together several

33

European retailers with a specific focus on combating deforestation, is
an example of a broader collaboration, although more transparency andambition is necessary about their aims and activities.

34

It is important to stress that the responsibility of retailers goes beyond
their private label products, and also should include their role as key
outlets for - and profit-makers of - all the major chocolate brands.
Supermarkets have the power to enforce sustainability for all of the brands
that are on their shelves.

Standards

The race for certified volumes has not led to the bar being raised. Despite
the fact that at least a third, perhaps even more than half*, of all the global
cocoa production is grown under a certification label or an own company
sustainability label, major problems persist; chocolate companies andretailers tend to look for the cheapest label, neglecting the potential
negative effects of this price pressure.
If anything, the relevance of certification standards has been declining. Fora long time it seemed the only tool available to achieve sustainability wascertification. With an increase in sector efforts, in data and research, andin experience with implementation, the sector now has a wider range ofinterventions at its disposal.
The Rainforest Alliance and UTZ merged in 2018, with the new joint
Rainforest Alliance standard – launched in 2020 – covering the productionof both previous systems. These two VSS’s were already the two largest
cocoa certifiers, after the merger they have even more market power.
Though claiming sustainability off the back of a certification system ismisleading, the terms “certified cocoa” and “sustainable cocoa” arestill often – wrongly – used interchangeably. Certified cocoa cannot be
claimed to be sustainable merely on the basis of certification, whether
this certification is Fairtrade, Rainforest, ISO/ARSO, organic, or any otherstandard.

* It is almost impossible to determine the full extent of certified cocoa production, as many cocoa farms are double or even triple certified. Additionally, not all cocoa produced under a certification system eventually is soldas certified due to low quality or low demand. The fact that farmers often
cannot sell all their cocoa as certified - and therefore do not receive the premium they would otherwise do - shows the vulnerability of cocoa farmers,
and is another way in which farmers’ efforts are not properly remunerated.

Certified Cocoa Sales

1,566
1,409

897

953

699
390

1,167
582

35

1,374

943

UTZ

183

203

RFA/SAN

261

232

Fairtrade

2018

2019

966

639

185

238

213

178

71

102

137

214

2014

2015

2016

2017

x1000 metric tonnes

A significant part of this cocoa is double and sometimes even triple certified.

One weakness of VSS’s is the reliability of audits. Sporadic sample audits
have not proven to be an effective means of finding and eradicatingproblems as diverse as child labour or deforestation. In early 2019, theRainforest Alliance/UTZ suspended all expansion through new groupsin Côte d’Ivoire and Ghana due to questions around the reliability of theaudits and quality of compliance.
Thinking that farming standards are the answer implies that bad farming is
the problem. Whereas Rainforest Alliance and Fairtrade both have a trader
code of conduct, the focus has historically been on the farming standard.
It would be advisable for more care and ambition in the development ofthese standards that put in place requirements for actors further down the
supply chain. If a farmer is required to change most of his/her businesspractices to be able to sell their product, why shouldn’t the same be asked
from large multinational corporations?

36

There are several ways in which certification plays an important role to
make value chains more transparent; it is, at the moment, one of the few
ways by which higher prices and premiums can potentially be delivered to
the farm gate, it offers support to farmer organisations through financing
and enabling cooperatives, and this backbone provides a framework
by which many other necessary interventions – such as Child Labour
Monitoring and Remediation Systems (CLMRSs) and village savings andloans associations (VSLAs) – can be rolled out. However, it remains an
open question whether certification is the most efficient tool on theseissues for it to be part of the solution.
Increasingly, both Fairtrade and Rainforest Alliance are engaging thecocoa sector in advocacy efforts that go beyond the direct interestof promoting their own standards. This is a necessary and welcome
acknowledgement that VSS’s are only part of the solution and that farmstandards operate in a broader social context. In that light, it is goodthat both standards are strongly advocating the need for regulation andbroader landscape approaches. At the same time, standards engaging in
advocacy also creates complexities around the business interests of the
VSS’s, as a large part of their earnings still is based on tonnages sold.
Competition with sustainability programmes of chocolate companies
Both standard organizations are in direct competition with thesustainability programmes of some cocoa and chocolate companies.
Some of the companies have introduced their own seals, such as
Mondelez the Cocoa Life seal or Nestlé the Nestle Cocoa Plan. Both
Fairtrade and the Rainforest Alliance fear that large licensees will opt for
their own certification programmes and abandon the original standards.
The Race to the Bottom is therefore also being driven by the companies
themselves. The companies’ own programmes are much less transparent
than Fairtrade and Rainforest Alliance. Impact studies are only partiallypublished and many companies have not even published their standard.
ISO/CEN and ARS/SRS standards
In addition to the two current major standards several new standards havebeen or are being developed by regional or global multi-stakeholder
platforms.

The ISO/CEN 34101 standard on sustainable and traceable cocoa waspublished in early 2019 after a development of almost ten years. Though
the standard was drafted through an inclusive process bringing all relevant
stakeholders together on an equal footing, the process suffered from rigid

bureaucracy inherent to ISO management system standards. This standard
suffers from several weaknesses including constraints that do not allow foressential elements such as requirement for fair payment, and very weak
forest protection measures. It also sets an almost impossibly high bar
regarding internal management systems at farm and cooperative level.
Several African nations, led by Côte d’Ivoire, are in the final stagesof developing a regional standard, largely based on the ISO 34101
standard. This ARSO/SRS 1001 standard seems to have some of the same
weaknesses as the ISO standard, although some of the more burdensome
internal management issues have been removed. It is, like the ISO
standard, extremely weak on environmental protection, and also has
weakened terminology and requirements around child labour and labour
rights.
For both the ISO and ARSO standards it is very unclear who will
operationalise the standards as scheme owners. For the ARSO standard,
there is a real chance that the producing governments will want to
run the schemes themselves. This additional power over sustainability
schemes in the cocoa sector would have to come with a strong increase ofaccountability by the governments.

Summary

A small group of cocoa and chocolate companies dominate the market;
each sourcing from hundreds of thousands of farmers, giving thesecompanies immense market power. Most report significant progress intraceability of cocoa sourcing, though definitions of traceability differ.
Retailers - large players on a national but not global level, driving prices
down while making higher margins than most of the supply chain - areincreasingly becoming part of the discussion, especially on national levels
through the national cocoa platforms.
The race for certified volumes has not led to the bar being raised, while
the relevance of certification standards has been declining. With a wider
range of interventions at the sector’s disposal certification is no longer the
only tool, and cocoa cannot claim to be sustainable merely on the basisof certification, although its infrastructure provides a framework by which
many other necessary interventions can be rolled out.

37

38

5. Living Income

Living Income

Living Income is the net annual income required for a household in aparticular place to afford a decent standard of living for all membersof that household. Elements of a decent standard of living include:
food, water, housing, education, health care, transport, clothing, andother essential needs including provision for unexpected events(Living Income 2020)*.

Root cause of most challenges in cocoa
Poverty lies at the root of almost all the challenges facing the cocoa sector.
As such, the prime goal for the cocoa sector should be the elimination ofpoverty. Without a living income for cocoa farmers, cocoa will never besustainable, in the first place because being able to earn a living income
is a basic human right (Fountain and Huetz-Adams 2018, p. 44). Solving
poverty is also necessary because the wide range of challenges facing thesector – from deforestation and child labour through to gender inequality
and infant malnutrition – will be impossible to tackle if farming households
still live in poverty. When farmers must choose between feeding theirfamily, and not cutting down old growth trees, it is not a choice. Whenthey must choose between feeding their family or sending them to school,
it is not a choice. Currently almost no cocoa farmers in the main cocoa
production countries in West Africa earn a living income. In Côte d’Ivoire,even of the certified farmers only 12 % earned a living income in 2018
(Fairtrade 2018).
A starting point, not the finish line
It should be abundantly clear that a living income is the starting point of aconversation on farmer livelihood, not a finish line. Most people reading
this paper would agree that every farmer should be able to earn at least aliving income, and preferably a lot more.
* The Community of Practice on Living Income, bringing together
several hundred practitioners from public and private sector, provides
definitions, and outlines best-practices in methodology for setting Living
Income benchmarks.

39

Income Distribution of Cocoa Farmers

13,00040

12,000Estimated total household income (USD/year/household)of a typical male-headed household in Ghana.

11,00010,000
9,000
8,000
7,000
6,000

only 9.4% are on or above
the Living Income line

9.4%

5,000

90.6%

4,000
3,000

Living Income Benchmark

Average
Median

2,000
1,000
0
0

2

4

6

8

10

Proportion of households (%)

1214
N = 595

Technical solutions to a political problem
Almost all the current efforts to increase farmer income are based ontechnical solutions, aimed at increasing farm production or diversifying
farmers’ income. However, the challenges facing the cocoa sector– and almost all other commodities as well – are often not technical,
but deal with power and political economy, such as price formation,
the asymmetrical bargaining power of farmers and value distribution,
unbridled market concentration of multinationals, and a lack oftransparency and accountability in the sector. The distribution of risk,
reward and responsibility form the basis of the political challenges thatmust be tackled by the cocoa sector – and all tropical commodities.

What could a chocolate company do with €642 million

One of the arguments that companies must follow the world market
price, is that the chocolate sector is a competitive one, and thatcompanies cannot afford to unilaterally pay higher prices. However,in the past decade, Nestlé has bought back around $46 billion USD(Nestlé Global 2020) in stockholder shares. In early 2020, the Ferrerofamily paid itself an annual dividend of €642 million (Neate 2020).
A rough calculation shows that a chocolate company like Ferrero,sourcing 135,000 metric tonnes of cocoa per year could give every
single cocoa farming household it sources from (circa 90,000 farmers
producing 1.5 tonnes per household) a living income for the year($5,500 per household for Côte d’Ivoire), leading to a cost of at most$450 million. This would still leave the company around €192 million it
could pay out to its owning family - the richest family in Italy.
If chocolate companies are able to spend that kind of money on theirstockholders and owners, there is simply no excuse for companies not
to pay prices that ensure a living income.

Unequal distribution of rewards
Until the Ivorian and Ghanaian governments combined forces to introduce
the Living Income Differential, farmers were almost entirely dependent
on the world market for the setting of the farm gate price. Thoughmarkets can work well to set proper price levels when all actors havecountervailing power, this is not the case in the cocoa sector. One of the
key determinants for a farmers income is therefore imposed on him. Thisasymmetrical power balance doesn’t just lead to low farm gate prices,it also leads to a very skewed distribution of value in the supply chain;farmers live in extreme poverty in a multi-billion dollar industry.
Unequal distribution of risk
While farmers see very little of the reward, they are confronted daily withthe risks of being a smallholder cocoa farmer. Climate change, adverse
weather conditions, pests and diseases, volatile markets and even family
illness provide daily hazards for their income. Where farmers havevirtually no means to protect themselves against these risks, companies
and governments can hedge and insure themselves against almost all
uncertainties.

41

Productivity increase
Despite growing criticism, the main approach that both cocoa companies
and producing governments have adopted to increase income so far, hasbeen to try to increase farm productivity. Common approaches to thisare training in good agricultural practices, the distribution of cocoa andshade tree seedlings, and making available agrochemical inputs such as
fertilisers and pesticides. These are important elements of any solution,
however the industry’s single-minded focus on this part of the solution has
not led to significant progress in tackling farmer poverty.

Average Yield per Hectare

544
427

EcuadorNigeria

458

Indonesia

542

Cameroon

500

Ghana

546

CDI

42

Unequal distribution of responsibility
Though farmers take almost all of the risk, and corporations further down
the supply chain take almost all the rewards, it seems as if nobody istaking responsibility. Solutions are voluntary, transparency - and therefore
accountability - are missing, and to a large extent most actors point atothers for solutions. Corporations point to the market when challenged
for the low prices they pay. Governments look to companies to pay foreducation and infrastructure. Most are silent when asked who will go first.
And so, the sector collectively looks to the farmer and identifies what canbe improved at farm level, so that potentially painful changes at corporate
and government levels can be avoided.

Productivity increase; data from Cocoa Barometer questionnaire

Until recently, most studies on average productivity in West Africa werebased on the farmer estimates of farm size and yields. These studies
generally reported that average productivity in West Africa, but also inother cocoa producing regions, is at 400 kg per hectare or even below.
However, over the past years, many companies have started measuring
farm sizes, which provides a better base to calculate accurate figureson productivity.
In the questionnaire for the Cocoa Barometer, companies wereasked about the average yields of their cocoa farmers. In total, twelve
companies provided figures on average productivity per hectare in
Côte d’Ivoire, eleven companies did the same for Ghana. According
to these figures, the average productivity in Côte d’Ivoire is around
550 kg, in Ghana 500 kg. These are unweighted figures, as we do nothave access to information on the number of farmers in the dataset or
the region where the data were collected. But it is still a clear indicatorthat average yields might be significantly higher than reported in older
studies, at least in Côte d’Ivoire and Ghana.
These higher yields might be due to the success of productivity
projects of the different companies. However, another reason might
be that older figures are based on the estimates of farm size. As there
seems to be a tendency to overestimate the farm size, specifically in
Ghana, figures have to be revisited (see page 49). Another problem
is that many farmers may sell part of the cocoa officially through thecooperative or farmer group, while another part of the harvest is sold
via relatives or neighbours and never appears in the books. Other
farmers might sell cocoa harvested by neighbours or relatives as theirown cocoa to get access to premiums as only the seller is a memberof a cooperative or farmer group which produces certified cocoa andreceives a premium.
In short; much more research is necessary to find reliable figures, anddata that is already available to individual companies should be sharedpublicly.

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44

Availability and affordability of inputs
Firstly, increasing productivity requires significant investments in time andresources. In order to achieve a productivity increase, fertilisers, seedlings,
and pesticides* need to be available and affordable. This is not the case inmost of the West African cocoa growing regions. In any case, even if thesematerials were available, farmers would have to invest money and labour
to obtain and apply these inputs. This requires access to affordable credit,
which is simply not available to most farmers presently. In addition, credits
are risky for farmers, as low harvests - due to diseases, unfavourable
weather conditions, a decrease of farmgate price, or a combination ofthese factors - might leave the farmer with debts he cannot pay off.
Availability and affordability of labour
Increasing productivity per hectare requires an increase in labour hours.
Unfortunately, there are presently no publicly available reliable data on
the relation between labour days and productivity per hectare. However,published and unpublished data of companies and research institutions
available to the authors of this publication show that an increase to about
800 kilograms per hectare would require an increased amount of labourof at least 50%.** Even with current production levels, many cocoa farmers
in major producing countries find it difficult to find labour to work on theirfarms.

Labour: data from the Cocoa Barometer questionnaire

Although availability and costs of labour is a crucial parameter in thedebate about income of farmers, there is almost no data available, letalone reliable data. Very few companies provided figures in reply to ourquestionnaire; most said that they have no available figures.
The few data points given estimate between 32 and 65 labour days
are used per hectare per year in low productivity farming systems.
When Good Agricultural Practices (GAP) are applied, the estimates varyfrom 40 to 211 days per hectare per year - a striking range, leading toquestions about the reliability of the outlier data.
* Pest and disease management is an essential part of sustainablecocoa farming. However, the use of agrochemicals should be kept to aminimum, and agroecology and agroforestry can play an important partin growing cocoa without chemical inputs. See chapter 7.
** We invite companies or other institutions with better data on this tomake available their data so that these assumptions can be verified.

Without further data and transparency on the quality of the databases,
the discussion about productivity, potential farm size and living income
runs into serious problems. This has been obvious now for several
years, but there is still no reliable data.
The increase of labour when implementing GAP has serious
implications for sustainability programmes, and could account for the
low adoption after farmers have received GAP training. Applying GAP
comes with costs, specifically for labour. Due to the lack of reliable
data, nobody knows if these costs are higher than the additional net
income. From the farmer’s perspective, confronted with price risk andyield risk due to pests and diseases, investing in GAP and specificallyinvesting more labour (either the farmer’s own labour, or by hiredlabour) is a very risky approach, with very uncertain outcomes.

Availability of data
Data on costs of production – including labour costs and costs for input– are elusive in the cocoa sector. Any claims that poverty is being tackled
through increased productivity should be accompanied by robust calcu­
lations on the impact of these productivity increases – including trans­parency on increased production costs, both for labour and resources.
Absence of success at scale
Another critique is the absence of significant success at scale. Despite
significant investments and efforts within sustainability programmes – andsky-high ambitions to see a tripling of yields, with some programmes
claiming that 1,500 kg a hectare should be possible – average yields
have remained at around 500 kg a hectare, although some company
programmes do show increases in pilots. After two decades, these aremeagre results indeed for the main solution the cocoa industry is putting
forward in an attempt to solve its biggest challenge.
Productivity increase leading to price collapse
If these yield increases were to be achieved, a next problem would arise;increased productivity can lead to a situation of oversupply, leading tolower prices. In 2016, a severe and sudden structural oversupply led toa drastic price decline. Increased productivity without strong and holistic
supply management solutions will lead to price collapses, leaving farmers
with diminished income whilst having invested heavily in labour and otherresources. If only 10% of all farmers would double productivity and by thisfulfil the requirements of many companies, prices would fall drastically.

45

46

Insufficient returns on investment
For investments in productivity increase to be remunerative, farm gate
prices need to be high enough. During the price crash of 2016, somecocoa companies advised their farmers to no longer use fertilisers, as
there was no return on investments. Increasing farm productivity will only
work as a poverty alleviation tool if the price is high and stable enough.

Productivity increase and overproduction:
the role of governments

In response to the 2016 price collapse the government of Côte
d’Ivoire has banned several interventions that could lead to increased
production, including the distribution of seedlings. Though supply
management solutions are needed, this should not be at the expenseof keeping already poor farmers from being able to rejuvenate andprofessionalise their farmers. More sensible supply management
solutions could include policies that stimulate income and crop
diversification, forest restoration, development of a services sector inrural areas etc.
At the same time, most other cocoa producing countries are pursuingpolicies to increase their cocoa production. Some - such as Ecuador,
Peru, and Cameroon - more successfully than others. If these targets
were to be met, this would have disastrous consequences for the world
market price. It is high time that producing countries start engaging inmuch more serious conversations to manage the global supply, andto avoid overproduction and price crashes such as in 2016. Supply
management could additionally be a tool in the struggle against
deforestation and forest degradation.

Income diversification
The cocoa sector’s second major strategy to increase farmers’ income –besides productivity increase – is a stronger diversification of farm income.
Increasing income diversity is an important element of strengthening theresilience of farmer income in the case of price collapses, crop diseases
and adverse weather. However, diversification is insufficient as a solution
to actually increase income, for a variety of reasons.

The impact of diversification approaches is currently not clear as there isno publicly available data. With government agencies such as CCC and
COCOBOD currently not showing commitment to or interest in promoting
diversification among cocoa farmers, the necessary structural support ismissing as well.
Furthermore, cocoa and chocolate companies should not outsource theproblem of non-remunerative cocoa to other sectors; cocoa should bea remunerative crop in and of itself. Furthermore, cocoa producers inboth Côte d’Ivoire and Ghana already have a strongly diversified income
structure (Bymolt/Laven/Tyszler 2018).
It is unclear whether there is a sufficient market for diversified products,
especially at the scale needed to provide for all cocoa farmers in the major
cocoa producing nations. Some companies are starting to tackle thisproblem by setting up regional approaches on diversification, checking
first if there is a market for products other than cocoa and additional growncrops before supporting farmers to further diversify. Companies could also
look at their own role as purchasers of a wider range of products comingfrom such a region.
These other sectors with poor farmers in the value chain also promote
diversification, and some of these crops, such as coffee, banana, pineapple,
rubber or palm oil grow in the same regions as cocoa. The fact that thesefarmers are also poor signifies a feedback loop of poverty, with manydifferent sectors not able to provide a living income, all looking to othercrops to solve their problem. This vicious circle needs to be broken, and it
can only be done through increasing farmer income.
Village savings and loans associations (VSLAs)
Increasingly, companies are setting up programmes that look at supporting
cooperatives and setting up village savings and loans associations (VSLA).
These are important developments, and more of such initiatives should beundertaken, together with a broader approach around rural development.
Farm gate prices
Once items such as productivity, diversification, and the enabling
environment are on the table, there remains one major factor to accountfor; the actual price farmers receive for their product. Though price is not asilver bullet to solve all problems in cocoa (Kiewisch and Waarts 2020), it will
not be possible for most cocoa farmers to achieve a living income without
significantly higher farm gate prices. Higher farm gate prices are a conditio
sine qua non for cocoa to become a sustainable commodity.

47

Farm gate prices, for a long time a taboo subject, are finally starting tobecome part of the cocoa sector’s conversation. There is widespreadacknowledgement by now that prices should go up. However, there is a lotof disagreement on what the best ways would be to raise these prices.

48

None of the major cocoa and chocolate companies have pricing elementsin their value chain that go beyond premiums and the obligatory LID
payments in Côte d’Ivoire and Ghana. All major companies buy partor even most of the cocoa through certified or self-controlled value
chains and pay premiums, but these premiums are not connected to acomprehensive living income strategy.
Living Income Reference Prices
For a long time, being able to determine a fair farmgate price for cocoa
was a challenge, as there are many variables that influence the answer.
Some of these variables were unanswerable until recently due to a lackof any data at all, let alone qualitative data. However, with the increasing
availability of data, in the past year, several initiatives have started to takesteps to define desired cocoa price levels for farmers in Côte d’Ivoire
and Ghana. These include the Fairtrade/Tony Chocolonely ‘Living Income
Reference Price’, the Oxfam Fair Trade* flexible premium, and the joint
Ghanaian/Ivorian Living Income Differential.
All of these calculations assume farmers will be able to significantly
increase their productivity. Only then will a family be able to earn a living
income. There are several key problems to that approach. Firstly, earninga living income is a fundamental human right for everyone, and should
not be available only to the highest achiever. Average cocoa farming
households should be able to achieve a living income, not just the outliers.
Secondly, it is highly questionable whether cocoa farms will be able toachieve the kind of productivity increase demanded by these calculations.
Thirdly, there is a real risk that farm sizes are currently overestimated.
This significantly impacts several variables of the living income reference
price calculation. It means that productivity is already often higher than isassumed, as the declared total yield per farm is generally correct. This will
also have implications for many sustainability projects; if productivity levels
are already significantly higher than estimated, it is not reasonable toexpect as much return on investment of productivity-enhancing activities.

* The trading branch of Oxfam Belgium makes and sells chocolate. Theirsister organisation, the Belgian NGO Oxfam Wereldwinkels is a memberof the VOICE Network and the Cocoa Barometer Consortium.

Disappointingly, none of the large chocolate and cocoa multinationals
have a living income reference price.

Farm size – GPS vs self-reporting: data from Cocoa Barometerquestionnaire

The use of mapping shows that farmers’ actual cocoa plots are often
smaller than originally declared by farmers themselves, especially in
Ghana. Over the past years, the major cocoa companies collected
hundreds of thousands of data-points on field size, based on GPS
localisation and polygon mapping. For Côte d’Ivoire and Ghana, mostof the large companies shared this data with the authors of the Cocoa
Barometer. This data shows that average farm sizes roughly are 3.4 ha
for Côte d’Ivoire. In Ghana, the difference between average farm sizes
mentioned in previous studies and the results of the measurement iseven more striking, as average farm size is only 2.1 ha.
Only a small number of companies reported on farm sizes measured inother countries. These indicate that cocoa farm size in Cameroon and
Nigeria seems to be similar to Côte d’Ivoire; farms in Indonesia tend
to be much smaller, while they are larger in Ecuador. Even the figureson mapped farms are not without problems, as they show averages,
which can be misleading for a variety of reasons. Therefore, the medianfarm size would be a better tool to describe the typical farm than the
average. Despite these problems, it is obvious that farm sizes aremuch smaller than the figure used for the current calculations of living
income.
This might have serious economic and ecological consequences forfarmers. A farmer in Ghana might for example estimate the farm size at
3 ha. Based on this, he or she buys and uses pesticides and fertilisers.
If the real farm size is only 2 ha, the input use is overdosed. Besides
this being a waste of money, overdosing agrochemicals can seriously
damage farm ecosystems and farmers’ health. Therefore, companies
have to share the correct data on farm size with their farmers, in orderto reduce input costs and protect the environment and farmers.

49

Long-term Cocoa Price Trends
9

price

50

Real price (2018) ́000 US$ per tonne

8
7
6
5
4
3
2

trend

1
0
1950

1960

1970

1980

1990

2000

2010

2020

Variable premiums
One of the main arguments of the cocoa and chocolate companies is thatthey have to follow the world market price. Although this is true for theiractivities on the terminal markets, there is no reason why the companies
would not be able to pay a higher farm gate price. One of the mechanismsthat could be used to do this, would be the implementation of a flexible
premium, such as the one Oxfam Fair Trade has incorporated since 2019.
Such a premium would be set once or twice a year, to bridge the gap
between the current household income and the living income benchmark.
Standards and pricing; danger of a race to the bottom on price
Fairtrade increased their minimum price (FMP) by for cocoa for the firsttime in almost a decade. This increase of 20% (from USD 2,000 to USD
2,400 per metric ton) is significant if viewed over the year 2019 when it
was introduced, although a large part of that is offset by inflation since2011 when the minimum price was last determined.
Though the Rainforest Alliance has recently introduced a mandatory fixedcash premium - safeguarding farmers from ever-decreasing premiums the refusal to implement a minimum price transfers all of the risk of volatile
prices from multinational corporations to vulnerable farmers. This decisioncounteracts their other efforts to achieve a living income for farmers. It alsofuels a race to the bottom between the different standards.
The volume of Fairtrade cocoa declined significantly by 11% in 2019,much of this decline in the last quarter of the year when the new higherprice was applied, which would have cost companies $235 per tonne, plus
the mandatory Fairtrade premium of $240 per tonne. They would probably
have lost more market share if they had raised the market price even further.
This notwithstanding, the Fairtrade Minimum Price is not the same as what
Fairtrade knows is the farm gate prices necessary to achieve a Living Income.
The calculations that Fairtrade has published on the living income reference
price have been a welcome contribution to the debate on sustainable cocoa,
however knowing how much you should pay, while not paying it, cannot
be considered sustainable. Though calculations vary, and become more
complicated as the FMP is based on world market prices and not farm gate
prices, the price should be at least USD 1,000 higher, if not even more.

Data and definitions

It is striking, but despite knowing about this problem for at least a decade,the industry has not overcome the problems about availability and qualityof data. Ten years ago, the World Cocoa Foundation initiated the Cocoa
MAP platform, which should have become a common database of theindustry. The software was developed, but the project never started. Cocoa
Action was founded to overcome some of the coordination problems inthe sector, including the implementation of a common system to collectdata. However, the problems still remain.

Principles for production data

• farm sizes should be polygon mapped and include all plots of the
farmer• statistics on field sizes should work with median values and not
averages, as statistic on field sizes should show the spread of farm size
• the database should allow to identify regional differences• yields should be measured more correctly• field tests should identify the workload for different agricultural
practices

Minimum farm gate price levels

Farm gate prices should be higher than the current reference prices set
forward by the front-runners. They should also be significantly higher thanthe minimum prices set forward by the Ivorian and Ghanaian governments
through the LID. The minimum farm gate price necessary to earn a living

51

income from cocoa should be at least $3,166 per metric ton for Côte
d’Ivoire, and $3,116 per metric ton for Ghana (Fountain and Huetz-Adams
2020).
Current farm gate prices / desired farm gate prices
52

Ghana
$ 1,810
Côte d’Ivoire$ 1,804$ 3,116$ 3,166

Short term interventions needed

Many of the holistic interventions that this Barometer calls for are longterm processes that will lead to change over time. However, (extreme)poverty is a daily reality for the vast majority of cocoa farmers. They cannot
afford to wait until all the long-term processes - such as diversified income,higher productivity or a better rural infrastructure - have come to pass. If
cocoa and chocolate companies truly care about cocoa farmers, and truly
want to eradicate poverty in cocoa farming communities, there is a shortterm solution that every company can engage in almost immediately, andthat is to pay farmers a higher price for their cocoa; if you care about thepoor, give them more money.

Summary

A living income is a human right. Solving poverty is necessary because thewide range of challenges facing the sector will be impossible to tackle if
farming households still live in poverty. This will require dealing with issues of power and political economy, such as price formation, skewed value distribution, the asymmetrical bargaining power of farmers, unbridledmarket concentration, and a lack of transparency and accountability in the
sector.
Technical solutions will not suffice. Increasing farm productivity
requires available and affordable inputs and labour, and could lead to
overproduction and price collapse if not managed well. Diversification
will also not be sufficient. Farm gate prices are a key missing ingredient,and are a short term solution that every company can engage in almost
immediately.

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6. Human Rights

Although the debate on human rights violations in the cocoa sector
often focuses on child labour, there is a wide range of problems facing
families in the cocoa sector. Gender inequality, (infant) malnutrition, lackof access to education, insufficient health care facilities and sanitation,
insecurity of land and tree tenure and rule of law, labour rights violations
for smallholders, workers and tenants; the list is long and by no meanscomprehensive.
Though every issue requires specific approaches, at the root of all thesehuman rights issues is the structural poverty of rural communities. Asa living income is a human right, any human rights approach to thechallenges in the cocoa sector should include strategies to address
poverty and to close the living income gap.

The UN Guiding Principles on Business and Human Rights (UNGP)The UN Guiding Principles on Business and Human Rights (UNGuiding Principles), also known as the Ruggie Framework, are a set of
guidelines for governments and companies to prevent, address andremedy human rights abuses committed in business operations. They
were proposed by UN Special Representative on business & humanrights John Ruggie, and endorsed by the UN Human Rights Council
in June 2011. The UNGP outline key three principles that should
guide all considerations around human rights in supply chains. These
three principles are
1. The state duty to protect human rights
2. The corporate responsibility to respect human rights
3. Access to remedy for victims of business-related abuses(UN 2011).

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Child Labour56

Not a single promise kept
The credibility of the cocoa sector to make good on promises to tackle
child labour has reached discouragingly low levels. Over the past two
decades, many promises were made. None were met. The first suchpromise was to eliminate child labour by 2005. The last such promise,made in 2010, was to come to a reduction of 70% of the worst forms ofchild labour by 2020.

According to a new report by the National Opinion Research Center at the
University of Chicago (NORC 2020), 1.5 million children are working incocoa production in Côte d’Ivoire and Ghana. 95% of the child labourers
are exposed to the worst forms of child labour, such as working withdangerous tools or harmful pesticides.
Industry, producing governments, and international organisations havebeen trying to come to new joint ambitions to combat child labour for thelast two years. However, this process has been slow and complex, withmuch internal division between various actors. At the time of publicationof this Barometer the partnership still had not been publicly launched,raising questions about its viability or ability to deliver impact at scale.
Investments and ambitions must be increased by several magnitudes* iftargets on child labour are ever going to be more than greenwashing andempty words. These increased ambitions must be coupled with mandatory
regulations; promises must be enforced with real consequences in thecase of a failure to meet them.

Industry investments in cocoa sustainability programmes

It is estimated that cocoa and chocolate companies have invested atleast $215 million since 2001 in sustainability programmes to fightchild labour. These investments cover interventions ranging fromboosting farmer income through increased productivity, rolling out
CLMRS systems, building schools, and more. (World Cocoa Foundation* In September 2020, the International Cocoa Initiative’s director called fora ‘massive expansion’ of collaboration and investments to tackle childlabour. (Confectionery Production 2020).

2020) Though these investments themselves are significant, it isestimated that cocoa farmers would have earned roughly $3 billion more
per year if prices hadn’t collapsed in the 2016/2017 harvesting season.

Prevention and remediation
Thinking around child labour in the cocoa supply chain has been changing
over the past years. Random audits and adopting a zero-tolerance policy for
any forms of child labour seem to have a counter-productive effect, making
child labour even more hidden, but no less prevalent. It is now a sharedbelief of the sector that root causes – such as farmer poverty, absence of oraccess to good schools, inadequate local infrastructure, inadequate labour
services in cocoa growing communities, and lack of awareness – must be
addressed.

This increased focus on prevention and community development is
an important step. However, it should not be seen as an alternative toindividual and collective responsibility of companies to respect humanrights in their supply chain and to remedy found cases. Both prevention andremediation are needed.
Even the most effective child labour interventions will not be able to solve
the challenges if the root causes of child labour – in particular the structural
poverty of cocoa growing communities and access to quality education –are not addressed (UNICEF 2018).
Definitions of child labour based on global ILO-Standards and national laws
Not every child on a cocoa farm is immediately involved in child labour, andnot every task on a cocoa farm is immediately a cause for concern. There
are, in short, three gradations of children working on farms.

• Child/light work can be summarised as a child that sometimes helps out
on a farm doing work that is not hazardous to children, and that does notinterfere with their schooling or their possibility to be a child. Also lightwork should always be done under adult supervision.
• Child labour is work that interferes with the child’s schooling or their
possibility to be a child, or that endangers the health and wellbeing of thechild. It also refers to labour for children under the specific age of 15 years
old. These are defined in ILO’s Core Convention 138, which is ratified by
all major cocoa producing and consuming countries, with the exceptionof the United States of America.

57

58

• The Worst Forms of Child Labour (WFCL) can be split into condition
and unconditional Worst Forms. Unconditional WFCL, such as trafficking,slavery, and forced labour (as well as several other categories notapplicable to cocoa) are defined at a global level. Hazardous childlabour is also called ‘conditional’ WFCL. They are called conditional, as
hazardous activities are defined at a national level through consultative
tripartite processes. This means that a child performing hazardous tasks
is both exposed to child labour and conditional worst forms of childlabour. The Worst Forms of Child Labour are defined under ILO’s Core
Convention 182, the first ILO Convention to achieve universal ratification,in the summer of 2020

Global definitions of child labour

Child 5-17 years old that works in cocoa farming, and...

Employment below
the minimum age
5-11 years:
1+ hrs/week

12-14 years:
14+ hrs/week

Reference periods:a) past seven daysb) past twelve months

15-17 years:
43+ hrs/weekorHazardous labour
At least one of the following:
1 Land clearing;
2 Carrying heavy loads;
3 Exposure to agro-chemicals;
4 Sharp tool usage;
5 Long working hours; or6 Night work

National definitions of hazardous child labour

In West Africa, the work of children on cocoa farms is part of daily life.
Similar observations can be made in agricultural production across theglobe. Careful definitions are crucial to differentiate between permissible light/child work and forbidden child labour, and to ensure that
helping out at the farm as well as youth apprenticeships are not confused with child labour. In that light, the governments of both Ghana
and Côte d’Ivoire have set up national definitions of hazardous labour.
The Ghanaian definition of hazardous child labour consists of ten
sub-categories:• Land clearing, including removing tree stumps, bush burning,
clearing of forest and felling trees• Carrying heavy loads,• Exposure to agrochemicals, including direct use and presence insprayed farms within less than 12h of spraying.
• Use of sharp tools, including breaking cocoa pods with sharp
breaking knives and harvesting overhead cocoa pods with sharptools• Climbing trees,• Night work,• Working in isolation, and• Working without protective clothing• Working with motorised farm machinery• Working long hours
The Ivorian definition of hazardous child labour consists of sevensub-categories:• Land clearing, including clearing of forest and felling of trees,
removing tree stumps, digging holes, and bush burning• Charcoal production,• Carrying heavy loads,• Use of agrochemicals,• Use of sharp tools, including using machetes/long cutlass forweeding or pruning, harvesting overhead cocoa pods with sharp
tools, breaking cocoa pods with sharp breaking knives• Night work (between 7 p.m. to 7 a.m.) or work during school/business hours.
• Working with motorized farm machinery• Game hunting with a weapon• Working long hours(NORC P. 34/35, Delaveux 2018)

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Child labour in cocoa
For the West African cocoa sector, the vast majority of child labourers
are involved in the conditional worst forms of child labour, undertaking
hazardous tasks such as carrying heavy loads, using dangerous tools,
being exposed to pesticides, or working with fire to clear the undergrowth.
Three quarters of children working in cocoa in Côte d’Ivoire were exposed
to more than one form of hazardous work, in Ghana this number is almost
two thirds (NORC p 75).

The report further outlines an increase of children being exposed topesticides* from 15% to 50% (NORC p 78)*, an especially grave cause forconcern. More than forty percent of children reported feeling very tired oreven exhausted because of child labour. A third of children were in very
bad pain, a quarter felt very sick, and one in ten children had to receive
treatment at a medical centre (NORC p 83).
Other recent research reported around 16,000 cases of forced childlabour and another 14,000 of forced adult labour in the cocoa sector in
Ghana and Côte d’Ivoire over a period of five years (Global Slavery Index2018). Though these numbers are only a fraction of the full number ofchild labourers, the forced nature of this labour makes it a particularly
grave concern.
Company efforts
All companies are investing in projects to reduce child labour, butcoverage differs considerably. The number of working children foundon farms differs significantly per company. One company surprisingly
reported that no cases were found in the past years and attributed thisto their long-term relations to the cooperatives they buy the cocoa from.
Other companies reported that thousands of children were found intheir value chain. One even reported that 31% of surveyed children were

* A child is exposed to agro-chemicals if the child is engaged in spraying,
carrying water for spraying, or working with agro-chemicals during thereference period.
A child is considered to be engaged in spraying if the child:• Was involved in spraying of pesticides or insecticides• Was present or worked in the vicinity of a farm during pesticide spraying, or• Reentered a sprayed farm within less than 12 hours of spraying.
Working with agro-chemicals includes a child having been involved in handling agro-chemical products such as purchase, transport, storage, mixing,loading, washing of containers and spraying-machine, and/or disposal.
(NORC 33/34)

involved in child labour. The company figures also show that identifying
children involved in child labour does not mean that they are automaticallyremoved from child labour. Very few companies report the numbers, but
the few available figures prove that even within successful projects manyor even most children continue working.
Child Labour Monitoring and Remediation Systems
A Child Labour Monitoring and Remediation System, or CLMRS, is ameans of identifying addressing and preventing child labour, embedded
in a supply-chain or community structure. Designated local liaison
people conduct regular visits to every family and speak to both parents
and children. Information from all monitoring visits is sent to a central
database. When children are found to be in or at risk of child labour,
suitable remediation is provided. Various forms of support are possible
at child, family, cooperative, or community level; from the provision ofbirth certificates or school materials to the establishment of an incomegenerating project for the women of the village. Once a child is enteredinto this system, their exposure to child labour will continue to bemonitored, as well as their school attendance.

The first cocoa-specific CLMRS system was developed several years
ago by the International Cocoa Initiative (ICI), in partnership with Nestlé,building on models developed by the International Labour Organisation(ILO). By now, Nestlé have committed to rolling out CLMRSs over their
entire African supply chain by 2025, as have Mars for all at-risk households.
ICI has stated its ambition for 100% of cocoa-growing households in Côte
d’Ivoire and Ghana to be covered by effective child protection systems,
such as CLMRS, by 2025. This would indicate a significant scale-up fromthe 10-20% of households estimated to be covered in 2020. ICI’s intention
is that 25% of cocoa-growing households would be directly covered by
ICI-implemented or ICI-supported systems, with the rest of the scale-up
to be implemented independently of ICI but catalysed and facilitatedthrough ICI’s innovation, learning, advocacy and systems-strengthening
work (ICI Cocoa Initiative 2020).
ICI estimates that its CLMRS identify at least 60% of the children in acommunity involved in child labour. Impact analysis shows that CLMRS
can reduce child labour by 50% among those children identified as inchild labour. Though these numbers are encouraging and show a higher
success rate than any other child labour intervention, even this bestpractice can only stop around 30% of child labourers from engaging inhazardous activities.

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Today, most CLMRSs are only available in farming communities orcooperatives that are part of company programmes. These tend tooperate in the better-organised segments of the cocoa sector. However,most cocoa is still not traceable, and the non-traceable cocoa potentiallycomes from areas where producers are not organised into farmer groups
and risks of child labour are likely higher.
Many companies are now rolling out similar CLMRS systems, somethrough the ICI, others through their own projects. To reduce thesignificant costs* associated with implementing a comprehensive CLMRS,ICI and some of its partners are piloting new innovations and adaptations
to render the system more easily scalable, for instance using risk-basedtargeting. Producing countries have also implemented their own childlabour monitoring systems, such as the Ghana Child Labour Monitoring
System (GCLMS) and the Système d’Obervation et de Suivi du Travail desEnfants (SOSTECI) in Côte d’Ivoire.
Whilst some of these alternatives might show potential, there is a growing
risk that different monitoring systems using different methodologies
could have radically different results, even though they are all using thesame name, and that inefficiencies emerge in the roll-out of different
approaches. To prevent a devaluation of the terminology and a dilution of
impact, there is an urgent need to establish common definitions, to define
standards and benchmarks, and - as the upscaling advances - to improvecoordination, harmonization and coherence.
Role of producing country governments
There is an important role for national governments and development
agencies in combatting child labour, especially around access to
education, awareness raising, and rule of law.

Access to education
Where schools are absent, children tend to work on the farms. Many
cocoa producing countries nowadays provide schooling systems that areaccessible for all children, and that guarantee good quality/ education.
Primary school attendance has increased in both Côte d’Ivoire and Ghana,* It is worth noting that a CLMRS system costs around US$85 per cocoa
growing household per year, which is only about 2.5%-3.5% of the costsof purchasing the cocoa at farm gate price. The farm gate price is only
about 5%-6% of the cost of a bar of chocolate at final sale. It is an interesting message by the cocoa sector that even a fraction of the final retailprice is already considered too much in tackling an issue as egregious
as child labour.

although it is not quite universal yet, and the quality of education stillneeds to be massively improved.
For both the major West African cocoa producing countries, secondary
education is a larger challenge, further exacerbating the issue of childlabour, as children under the age of fifteen cannot work full-time but
must attend school. In Ghana, secondary education on paper is free anduniversal, however the education system cannot cope with the numbers,
and coverage throughout the country is far from universal. In Côte d’Ivoire,
coverage is even much less universal. There is also a strong genderimbalance in school attendance, which becomes more marked at higher
ages. Often, older girls are kept at home to help with various householdtasks.
Awareness raising
An important role for national governments is to ensure clear
communication and public awareness around key issues. There is still
a lot of progress to be made on this point. Whereas for several years
progress was being made in acknowledging the challenges, the past years
government agencies have started to downplay the issue of child labour
again, often confusing child work with the worst forms of child labour.
Assertions that most children would be merely helping out on the farm
after school do not correspond with the reality of recent research.
Rule of law
Both Ghana and Côte d’Ivoire have developed and implemented
an extensive legal framework, as well as a range of relevant legal
implementation initiatives. Care must be taken when enforcing childlabour legislation. In the case of child labour and conditional worst
forms of child labour, the best recourse is often aiding cocoa farming
households in taking away the reasons why children are working in the firstplace. Awareness raising and community development are also a part of
the necessary interventions there. In the case of unconditional worst forms,
however, relevant authorities should consider stronger interventions;forced child labour and trafficking are criminal offences.

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Gender inequality

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Women run many cocoa farms in West Africa. The available data areunreliable, but for Ghana roughly a quarter of the cocoa farms are run
by women (Marston 2016), and women work as labourer on cocoa
plantations, often at lower pay than men. Their role is often not recognisedor remunerated accordingly. In many cases, women are excluded fromland ownership, and partly due to a high percentage of female illiteracy
and innumeracy, often do not share in the rewards of the family’s farms.
Additionally, women are often confronted with sociocultural systems
which do not enable them to run their cocoa farm as a successful business.
They also have a harder time accessing extension services, credits andcertification than their male counterparts, and are often underrepresented
in farmers’ organisations, public meetings and leadership roles incommunities.
Although there are differences between the tasks of men and women,
women are engaged in most of the steps of cocoa production, frompreparing seedlings to selling beans. In addition to supporting cocoa
production, women are involved in household activities, child-rearing andfood production, which adds up to a heavy workload.
Unless specifically designed to do so, cocoa sustainability programmes
will often fail to reach the women in cocoa growing communities. This
has negative consequences for the women themselves, and as such isreason enough to ensure that company and government programmes are
set up in such a way as to ensure women participation and inclusion. It is
important that women are not (purposefully or inadvertently) blocked fromtaking part.
Gender-inclusive design is also essential because women are change
agents in and of themselves. Projects as diverse as poverty alleviation,
infant nutrition, forest preservation and child labour sensitisation, all
become so much more effective when women in the communities are
involved. If women often do the labour on the fields, it is imperative theyalso receive training in Good Agricultural Practices. If women are able toearn more income, they tend to spend more on essential household items
and services than if their male counterparts earn this money. Ensuringthat women are involved in the child labour awareness projects resultsin broader community acceptance. Giving women land and tree tenurerights makes for better protection of forests and preservation of existing
ecosystems. The list goes on.

Increasingly, projects do involve women’s perspectives, but genderequality and female centred projects are still anything but universal.
A sustainable improvement of the situation of women also includes achange of mind of the men in the communities. The transformation fromtraditional, often restrictive customs to more equality between men andwomen needs greater efforts than are underway presently. There is amajor responsibility for governments in producing nations in this regard,as well. Gender equality is a truly cross-cutting issue and should be acentral component in all programmes of the cocoa sector.

Infant malnutrition

Cocoa is a crop that only sees a few payments to farmers per year andthis income does not cover a living income. As a result, in the months
before the next harvest – the so-called ‘lean season’ – many farmers areunable to afford proper nutrition for their children. It is estimated that
20%-30% of children in cocoa communities suffer from stunted growth(IDH 2019). Stunting and infant malnutrition can lead to a range ofhealth disadvantages later in life, including reduced physical and mental
capacity.

Health care and sanitation

One of the major challenges in rural cocoa growing communities is thelack of sufficient health care and clean drinking water, combined with anenvironment in which tropical diseases often flourish. The lack of clean
drinking water, the prevalence of diseases endemic in cocoa growing
regions and complaints such as back and joint pain and poor eyesightlead to significant consequences. When health facilities are available,
they are often not affordable to most rural families, causing them to waitwith getting help until illnesses have become much more serious, and are
harder – and more expensive - to treat. Poor health, furthermore, leads toloss of productivity and income for cocoa farms, and increases reliance onfamily labourers, including children.

Labour rights

Though cocoa is a crop grown by smallholders, seasonal hired workers
are common in the cocoa sector across the world. In Ghana, hired labour
is often used to cope with peak workloads, although in Côte d’Ivoire thisseems to be less common (Hainmueller/Hiscox/Tampe 2011: 30; Selten
2015: 25-27; Bymolt/Laven/Tyszler 2018: 165-166).

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There are reports of bonded labour, i.e. people having to work off debts
on the plantations and therefore not allowed to leave their jobs until they
have repaid their debt (Republic of Côte d’Ivoire 2008: 54ff; Republic of
Ghana 2008: 151-157). A large proportion of these workers do so without
contracts and only temporarily. Additionally, in many regions outside ofWest Africa, cocoa is grown on larger plantations, with workers rights
becoming an increasingly relevant and important topic to be addressed.
Low wages for workers
The situation of most workers on the plantations remains precarious. A
large proportion of the employees work without employment contracts
and only temporarily. A comparison with the living wage for the banana
sector in Ghana shows that most workers in Ghana on cocoa plantations
earn much less than a living income (Smith 2017). As early as ten years
ago, studies pointed to the sometimes extremely low incomes of workers
on the cocoa plantations, with workers in Côte d’Ivoire and Ghana earning
between €150 and € 300 euros a year, many of them even less. (Republicof Côte d’Ivoire 2008; Republic of Ghana 2008).

As a result, there is a shortage of hired farm labour despite considerable
unemployment in Ghana and Côte d’Ivoire; people are neither willing nor
able to work at below-subsistence levels. Most of the farmers cannot meethigher wage demands, as they earn very little themselves. Furthermore,
the income of female day labourers in cocoa farming is significantly lower
than that of men.
Worker organisation
Strong worker and farmer organisations could help both farmers
and their employees to claim their own rights. So far, however, only asmall proportion of workers and farmers are organised, and existingorganisations are too weak to enforce higher prices. Of the main cocoa
producing countries, only Ecuador has ratified ILO Convention 141 on
Rural Workers’ Organisation, launched in 1975, which promotes theformation of associations for employees, tenants, small farmers andsmallholders. None of the major cocoa producing countries presently hasa policy in place to support farmers and workers to get organised.

Tenants and sharecroppers

Most of the sustainability efforts in the cocoa sector are aimed at the cocoa
farmers, generally considered to be the landowner. However, many of thepeople working on the farms are neither hired labourers nor farm owners
but are tenants in some way. Though these systems vary, few sustainability

approaches so far have taken their situation into account, and this will
be something the cocoa sector needs to look at in far more detail in the
coming years.

Tenant systems in Ghana

Abunu
In the Abunu lease system, farmers are given permission bylandowners who do not use their land themselves, or use it only
partially, to convert it into a cocoa plantation. In return for their work,
which takes them an average of four to ten years, they are allowed
to continue farming half of the land. The other half of the plantation
goes back to the landowners.
Abusa
In the Abusa lease system, farmers lease land from owners who
cannot or do not want to manage the work on the plantation
themselves. In return, they usually have to give up half, sometimes
even two thirds of their yield, which fluctuates depending on thecourse of the harvest, to the owners.

There is currently no reliable data on what percentage of households
work in Abunu or Abusa systems. While the government quotes relatively
low figures, studies show that in some regions around a quarter, andaccording to other surveys even a third of the plantations are managed bytenants. Currently, the systems in Ghana do not consider whether the rent
offers enough money to enable a decent livelihood. The whole problem isunder-researched, but as many farmers who own land do not have a living
income, the situation of many tenants is likely to be much worse.

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Summary

68

Human rights violations in the cocoa sector are frequent, and include
gender inequality, (the worst forms of) child labour, lack of education,(infant) malnutrition, insufficient health care facilities and sanitation,
insecurity of land and tree tenure and rule of law, and labour rights
violations for smallholders, workers and tenants.
1.5 million children work in cocoa production in Côte d’Ivoire and Ghana.
95% of child labourers are exposed to the worst forms of child labour,
such as working with dangerous tools or harmful pesticides. Most are
exposed to more than one form of hazardous work. Investments andambitions must be increased by several magnitudes, focussing on both
remediation and prevention. Though current best-practice interventions
might be able take some children out of child labour, root causes – suchas farmer poverty, absence of or access to good schools and inadequate
local infrastructure – must be addressed to solve the problem of childlabour.
Women do much of the work in cocoa, but are not recognised or
remunerated accordingly, and are often excluded from ownership andparticipation in many aspects of life. Health care is often unavailable orunaffordable, and poverty leads to infant malnutrition and stunting, which
can lead to a range of health disadvantages. Seasonal and hired workers
are often overlooked in most human rights discussions.

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7. Environment

The past years have seen the debate around sustainable cocoa expand
to new areas. Where at first child labour was the focal point, poverty
was added to the conversation as a second key concern. More recently,
deforestation has been acknowledged as a third major challenge theglobal sector must find solutions for. This is indicative of how top-down thediscussions on sustainable cocoa have been. Though deforestation andpoverty have been problems for decades, there was very little attention
paid to these important issues. Other environmental concerns that arestarting to come to play include climate change, the loss of biodiversity,
the use of agrochemicals, and the need for agroforestry.

Deforestation

Cocoa production has been a driver for deforestation across the globe.
Natural forest cover in Ghana and Côte d’Ivoire has declined by more than
70% in the past three decades, and the last remaining national forests
there are endangered or already damaged. The rate of deforestationin Côte d’Ivoire and Ghana seems to be slowing down, in part due
to the Cocoa and Forests Initiative, what little remains of the forests
there continues to be threatened (Global Biodiversity Outlook p. 55).
Furthermore, rainforests in Indonesia, the Amazon Basin, Colombia, andthe Congo Basin are all under pressure from encroaching cocoa farms.
Whereas child labour and to a lesser degree farmer poverty are seen as
largely West African challenges, the environmental concerns in cocoa
production are truly global in scope.
Impacts of deforestation
Deforestation has a range of impacts, the most obvious of which are theloss of biodiversity and habitat. Extinction of many forms of flora andfauna is a direct result. But through widespread deforestation, humanity
also comes into more frequent contact with potentially lethal pathogens, a
topic that has become significantly more urgent in the public perception
in the past year. Forests also have tremendous climatological contribution,
both as massive carbon storage systems, as well as in their function as‘rain machines’ - their disappearance contributes to accelerating climatechange.

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Traceability
National monitoring and traceability systems that have been promised
are still not in place, three years after the launch of the Cocoa andForests Initiative. Interestingly, several of the largest cocoa and chocolatecompanies have now started publishing their cocoa sources – at least
to cooperative level – on an individual basis. These individual company
initiatives are essential to move the conversation further, and othercompanies are strongly urged to follow these examples. At the same time,
it would be wise for industry players to collaborate more closely to ensurethat the format in which the data is shared is compatible with each other,and with other important data sources such as satellite imagery, to ensurethat they are useful tools in monitoring and following forest protection.

Furthermore, the interests of farmers need to be taken into account when
designing these traceability systems; a situation must be avoided that
farmers are forced to comply with a range of different systems, all with theirown additional demands. Farmers should also be able to access - and own- the data about their farms.
Traceability to source should include mapping of remaining forests,
in order to monitor and report on deforestation free cocoa, as well as
providing the necessary data to be able to remunerate farmers for keeping
forests.
Reforestation and restoration
Putting an end to deforestation is not enough; so much old-growth forest
has already been lost, it is essential for parts of the newly deforested areas
to be restored in their environmental functions , and for new-growth rainforests to be allowed to form over time. In those parts that will continue to be
used as (cocoa) farmland, agroforestry systems should become the norm.
Forest protection and human rights
Forest protection must be done in a way that upholds and respects humanrights. Violent evictions of farmers from recently deforested areas, as has
been witnessed several times in the past years, should not be part of the
response. Forest protection does not simply mean expelling local people
from their farmland. Farmers should not be criminalised. It is necessary
to involve farming households in the process of deciding how to protect
and restore forests in their area and ensure that it produces economic
gains, where this is not possible, help them find alternative sustainable
livelihoods. Farmers that have encroached on national parks and protectedareas have often done so because of a lack of alternatives, and havebeen able to do so because local officials have often turned a blind eye.

Communities that are currently in protected areas must be relocated byproviding realistic alternatives.

Agroforestry*

Cocoa agroforestry systems can bring a wide range of ecological benefits;biodiversity conservation of flora and fauna, carbon sequestration,
preserving and strengthening soil moisture and fertility, contributing topest control, and microclimatic control such as stimulating rainfall, andmany other benefits.
Challenges in current agroforestry approaches
Low impact of current efforts
A large gap separates the current reality of agroforestry in the cocoa
sector from its potential. Alignment on an adequate definition is missing,causing almost every company to be using a different definition, andallowing for a lot of confusion. Additionally, sector commitments andcertification have low impacts, not being monitored or fully implemented
on the ground (Higonnet et. al.). This has much to do with the low – andchangeable – criteria to achieve agroforestry, and lack of enforcement,
not only in CFI but also for both large-scale certification labels with anagroforestry component as well as the government agroforestry anddeforestation standards in Ghana and Côte d’Ivoire. Most efforts also
remain uncoordinated, with little synergy between companies and thelandscapes they operate, resulting in minimal landscape transformation
and agroforestry improvements.

Agroforestry should not replace forest areas
Despite good intentions, low shade standards (as exist in the current
voluntary sustainability standards) encourage and enable degradationof existing, more complex agroforestry systems to stimulate productivity.
Agroforestry should not replace forest areas**, nor can simplified
agroforestry be a substitute for more diverse agroforestry systems. Instead,agroforestry systems should be used to strengthen resilience of cocoa
production regions and to restore degraded land. All monoculture cocoa
should be replaced over time with agroforestry cocoa, with progressively
more robust agroforestry systems put in place.

* This chapter is an abridged version of the Cocoa Barometer Consultation Paper on Agroforestry, which was released in June 2020, and can befound at www.cocoabarometer.org.
** As defined under national regulations and using HCS and HCV methodologies for cocoa production.

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Low tree survival and farmer adoption
The impact of agroforestry reforestation campaigns for existing cocoaplots is unfortunately minimal. In Côte d’Ivoire, despite a great numberof tree distribution campaigns, distributed tree survival was less than
2% (Sanial 2019). Even when trees do survive distribution, most young
tree seedlings are cut down during weeding, due to a lack of training on
agroforestry practices provided to the person who is doing the actual
work at farm level, such as sharecroppers (Uribe-Leitz and Ruf 2019). This
clearly shows the need for intensive training, education, and collaborative
work with cocoa farmers and farm workers to ensure success in anytransition away from monoculture towards agroforestry. Though CFI
signatory companies have distributed millions of multi-purpose trees foragroforestry (and trained hundreds of thousands of farmers in climate
smart cocoa), how many of these will survive and grow out to serve their
purpose?
Adoption of agroforestry by farmers currently in cocoa monoculture
systems is minimal, for several reasons. Costs and benefits of agroforestry
are often unclear to farmers, and many farmers have been led to believethat full-sun monoculture is the way to go. Few farmers can afford theinitial investments to transition to agroforestry. Land and tree tenure
insecurity provide additional barriers. When agroforestry programmes
are not rolled out taking gender into account, adoption rates by womenfarmers will also be low. Finally, when farmers have access to new cocoa
planting material, these are often varieties that have been adapted to fullsun conditions, and therefore are not very suitable to agroforestry.
Zero-deforestation is not the same as cocoa agroforestry
There is no direct relationship between promotion of agroforestry andhalting deforestation. Agroforestry cannot replace natural forest. However,agroforestry cocoa can play a minor part in compensation and restoration
measures for previous historic deforestation. In this sense, it is importantfor companies in the cocoa industry, who have benefitted from past
deforestation in their supply chains.
Agroforestry is also important for major cocoa producing countries, as
they urgently need to re-green their nations, some of which are on acollision course to desertification because of tree cover loss. For suchcountries, rolling out agroforestry wherever possible can help anchor
rainfall and restore some tree cover.

Collaborative development of landscape approaches
Many agroforestry initiatives are currently limited to cocoa-plot scale.
However, a landscape level perspective is needed, both to protect
remnants of natural forests and to remediate past deforestation and forest
degradation. A landscape-level approach places agroforestry in the wider
context of environmental sustainability, resilience, climate mitigation
and adaptation strategies. It also integrates the interests for a variety ofcommodities, apart from cocoa, food, non-timber forest products, timber.
This diversity of land uses can bring environmental benefits such as stablewater provisioning, habitats for pollinators, improved soil quality, corridors
for fauna, and the control of pests and diseases.

Structural changes in the governance of agroforestry approaches areneeded; a shift from cocoa-plot to landscape, collective and inclusive
development of landscape approaches that are locally defined throughbottom-up collaborative approaches.*
The core/minimum requirements for an agroforestry standard should
be seen as a (smart) mix of measures that together add-up to an overalllandscape level standard. Elements to be considered when designingcocoa agroforestry at both plot and landscape scales include• maintaining on-farm ecosystem services (such as CO2 sequestration,
biodiversity, nutrient cycling, pest control, pollinator habitats, soil quality,etc.), over time enriching production from monoculture and simplified
agroforestry to more diversified systems, either on plot/farm level or oncommunity/landscape level.
• aiding the restoration of degraded forests, thereby restoring
environmental services (including protecting biodiversity, connecting
primary forests, providing habitat for native species, avoiding soil
degradation and associated water pollution, and preserving natural
streams, local humidity, and rainfall)• increasing long-term productivity and resilience of cocoa-growing areas• improving farmer livelihoods by providing diversified income and foodsecurity to farmers through other cash crops and staple foods.

* A more in-depth discussion on locally defined collaborative approaches
and farmer inclusion can be found in the next chapter 8 Enabling Environment.

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Land degradation

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Artisanal and small-scale gold mining (ASM), called Galamsey (Ghana)and Orpaillage (Côte d’Ivoire), is a major problem in West African cocoa.
In recent years, the number of miners – and the damage they cause – hasrisen steeply. Record high gold prices and the struggle to earn a livingfrom agriculture have led to explosive growth in the artisanal and smallscale mining sector globally. The use of mercury to extract the gold iscausing severe environmental damage; the poisoned wastewater is notsuitable to drink or to use for irrigation, and contaminated mud run-off
from the mines causes additional destruction to rivers and lakes. In many
cocoa-growing regions where there is gold, farmers short of money allow
small-scale miners to use their land for mining, in exchange for cash
compensation, leading to soil erosion and often to the loss of land forcocoa farming.

Tree tenure and logging

The logging industry also adds to deforestation and land degradation,with the rights to cut timber trees often not being controlled by the cocoa
farmers on whose land these trees stand. A careful first step has just beentaken in Ghana, where some cocoa farmers recently obtained the rights
to non-cocoa trees on their land. However, this process was very long andtime-consuming, and registering these trees is a complex and bureaucratic
process. Côte d’Ivoire’s new forestry code also allows producers to be
the owners of the trees on their plots. However, in both countries, land
and tree tenure remain major hurdles in protecting old growth trees. A lot
more support needs to be given to farmers, and the bureaucracy around it
must be greatly simplified.

Climate change

The loss of forests and shadow trees amplifies the impact of climatechange. Cutting down forests means destroying the local water cycles,with severe regional climate breakdown as a result, including less cloud,lower humidity and modified patterns of rainfall. Weakening monsoons
have also been correlated to deforestation. Typically tropical forest
cover losses of about 50% cause local temperature increases of around
1°C. Large scale deforestation is likely to disrupt atmospheric moisturetransport (Sheil, D. 2019).
Adverse weather patterns from time to time are not unusual, but theaccumulation of these events during the past years is striking, with astrong correlation between deforestation and rainfall loss. Global climate

change as well as regional microclimate change already have a massive
impact on cocoa production and will do so even more in the coming
years. Large parts of the global cocoa growing regions will become muchless appropriate for cocoa production in the coming decades, in otherareas the production of cocoa will become entirely impossible (Schroth etal. 2016).
Work is being done to modify cocoa tree varieties to be more resistantto droughts and extreme temperatures, and climate smart agricultural
practices might support the adaptation of cocoa trees to the challenges
caused by climate change. Soil water management and fertilization
practices could improve the situation, and agroforestry systems are
expected to be one of the most effective adaptation systems available.
Landscape-wide agroforestry, combined with reforestation efforts, isalso the best option to positively influence rainfall patterns in regional
microclimates.
For these efforts to become mainstream, infrastructure and investment
capital are needed to grow billions of climate resilient trees and to
distribute them to cocoa farmers all around the world, and millions offarmers will need to be trained on adopting climate smart agricultural
practices.

Agrochemicals

One of the key strategies to increase cocoa productivity for the past years
has been to increase the use of agrochemicals. In addition to stimulating
good agricultural practices (GAPs) and making available new planting
materials, fertilisers and pesticides are key components of what cocoa
and chocolate companies like to call the ‘professionalisation’ of the
farmer. The use of agrochemicals, however, is not a neutral intervention
in the economies of farming households, nor in the ecosystems of cocoa
growing landscapes.
Fertiliser
Cocoa plantations deplete soils, specifically in regions where the soil
contains low amounts of nutrients. This is the case in many cocoa growing
areas. Historically, farmers reacted to the depletion of soils by moving theirfarms, cutting down old-growth forests and planting cocoa trees on the
fresh soils. This slash and burn system is not viable any longer. Therefore,
the degradation of soils must be prevented or, where already advanced,
reversed. The main approach to doing so, from a cocoa industry
perspective, is by using synthetic fertilisers.

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Tailored fertiliser necessary
One-size-fits-all fertilisers will not work in cocoa. Any fertiliser use –whether synthetic or organic – requires the nutritional composition to be
tailored to a series of variables, including soil quality, the age of the tree,
and whether the cocoa is grown in agroforestry, shade or full sun systems(Ureña 2016). Testing the soil quality is costly and laboratories have to beavailable. At the same time, detailed information on the soil quality andthe fertiliser requirements in West Africa are scarce. For Côte d’Ivoire,
research from 1975 calculated that 26 different formulae of fertiliser
are necessary to meet the needs of the different soil qualities. A similar
study in Ghana concluded that at least 30 different formulae are needed.
Farmers require training about the correct application and optimum
agricultural practices (Snoeck et al. 2016, p. 30). Soil quality testing,adequate farmer training, and tailored fertilisers are all necessary.
Improper use of fertiliser
Reality, however, is quite different. Extension services in Côte d’Ivoire
recommend one composition of fertiliser for the whole country, andone dose per hectare for all farms, regardless of soil type, tree age, or
farming system. Although 77% of cocoa farms in the Côte d’Ivoire do
not need nitrogen, it is the main component of the presently nationwide
used fertiliser. This fertilizer – so called “Engrais Cacao” – is “suitable for
only 16.5% of the cocoa growing areas in Côte d’Ivoire” (N’Guessan etal. 2017, p. 513). In Ghana, a regional study in the Sefwi Wiawso District
revealed that only 25.5% of the farmers use fertilisers, while none applied
the fertiliser as recommended (Nunoo et al. 2013, p. 27). Using wrong
dosages can lead to a further destabilisation of natural ecosystems
through pollution. Applying fertilisers to old, diseased, or low yielding
trees has no benefits and costs money. Therefore, for fertiliser use tobe effective, farmers need to rejuvenate their farms with high yielding
seedlings - which are often neither available nor affordable.
Organic fertiliser and agroforestry
Though they are often a quick fix for multinationals aiming to increase
yields in the short term, using synthetic fertilisers often comes with manyrisks for farmers and the environment. However, synthetic fertilisers are
not the only way to prevent or even reverse soil degradation. Agroforestry
systems and organic fertiliser use are also viable options (see box below).
However, most of these projects are pilots as different methodologies
have to be tested, and their application at large scale needs to be proven.
All of this - including the implementation of good (organic) agricultural
practices combined with agroforestry - needs significant investments.

Additionally, increasing soil organic matter is an important aspect ofsustainable soil management; it improves the soil structure, leading tobetter plant growth, and provides extra slowly releasing plant growth
nutrients. Soil organic matter also increases the water retention capacityof the soil, which can make a difference between viable and nonviablecocoa systems in the future, when climate change will inevitably threaten
cocoa production in some areas. It can be achieved through the additionof manure, (pruned) plant material of agroforestry trees; cover crop
cultivation, household compost, etc.

Alternatives to synthetic fertiliser use• A project in Nigeria showed using organic agricultural practices
not only had positive environmental impacts, but also led to healthimprovements for farmers, increased revenues due to significant cost
reductions and increased yields compared to practices used before(Faturoti 2012, p. 444).
• In Côte d’Ivoire, the use of chicken manure as organic fertiliser led
to impressive results. Yields could be more than doubled and net
farmers income increased significantly due to the relatively low costs(Ruf 2017, p. 18).
• Testing plots in Bolivia proved that organic agroforestry systems canlead to improved yields combined with higher income of farmers(Armengot et al. 2016).
• Ongoing projects run by companies like Chocolats Halba, Lindt &Sprüngli and Ritter Sport show that improved cultivation systems
combined with training of farmers and good planting material can
restore depleted areas and lead to good yields of cocoa in Latin
America, Ghana and Côte d’Ivoire.

Pesticides
A wide variety of pesticides are used to control pests and diseases incocoa. Highly disputed Neonicotinoid and Pyrethroid insecticides areused to reduce crop loss (Pesticide Action Network (PAN) UK, 2018;
Bateman 2015, p. 8 and p. 39). The use of these pesticides warrants close
attention, for the protection of both farmers and chocolate consumers, aswell as for its environmental effects.

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Pests and diseases
In many areas in West Africa, viral diseases such as the cocoa swollen
shoot virus (CSSV) and fungal diseases such as black pod lead to a loss of
30% and more of the annual harvest. The Witches Broom virus devastated
the Brazilian cocoa sector in the 1990s and continues to damage part ofthe cocoa production in Latin America. Pest infestations, ranging from
insects, such as the Cocoa Pod Borer in South-East Asia, through to rats,
mice, squirrels, slugs and snails damage the cocoa tree and its fruits,
leading to harvest losses (Afrane and Ntiamoah 2011, p. 56; Bateman
2015, p. 28).
Consumer protection
Many concerned stakeholders are advocating for consumer protection
from pesticide residues. Pressure from the European Union (EU) and Japanto protect customers from cocoa contaminated with unhealthy pesticide
residues led to an EU regulation in 2008, controlling the residues ofchemical substances in cocoa entering the EU. This has already improved
the situation, as most hazardous pesticides are banned now (Bateman2015 p. 2). However, a 2016 test of chocolate on the Austrian market
revealed that chocolate bars often still contained traces of up to four
different kinds of pesticides. None of the tested bars contained quantities
with a known direct health risk, but some of the chemicals might beharmful even in very low doses. The residues in the beans indicate a very
high use of pesticides in the origin countries (Supply Change 2016).
Farmer health and safety
Because of a lack of farmer knowledge, overuse and misuse of pesticides
is widespread. Often, farmers are sold unlicensed, fake or adulterated
products by unscrupulous resellers (PAN UK 2018, p. 1). Many farmers
suffer from health problems related to agrochemical use without sufficient
protective equipment. Spraying, even with approved pesticides, can cause
eye and lung damage. Many farmers and sprayers are not aware of thecorrect use of pesticides and protective measures (PAN UK 2018, p. 2).
The lack of protective equipment, farmers eating and drinking during
the application of pesticides, and the storage of agrochemicals in close
proximity to food and underage children are all common occurrences(Ogunjimi and Farinde 2012, pp. 188–190). It is hardly surprising that
residues of insecticides are sometimes found in the blood of cocoa
farmers and in samples of groundwater (Sosan et al. 2008, p. 783).
Education on the right dosage application of pesticides and use ofprotective equipment needs to be intensified to prevent adverse impacts
on human health.

As stated elsewhere, the increase of children using pesticides is a cause
for grave concern. The harm to children of exposure to agrochemicals issignificant, and can lead to lifelong adverse effects, including respiratory
diseases, learning problems and cancer. In addition, prenatal exposure
to pesticides can lead to a wide range of birth defects and miscarriages(HealthyChildren.org 2020). Due to these risks, pregnant women andchildren should never handle pesticides.

Government approaches to pesticides insufficientThough government approaches differ, it is safe to say that producer
government approaches to the use of pesticides still require significant
improvements, and must be guided by the objective to protect farming
families and the environment. In Ghana, for example, the Cocoa
Research Institute of Ghana (CRIG) tests all pesticides that are allowed
for cocoa production. However, of the sixteen approved insecticides,
twelve are on the PAN International Highly Hazardous Pesticides list
(HHP). One of the eight allowed fungicides and the only allowed
herbicide is also on the HHP list. Most of the approved agrochemicals
are dangerous for bees. “Other hazards relate to chronic humanhealth effects, acute toxicity to humans by inhalation, high toxicity toaquatic organisms and very high resistance in water soil or sediment”(PAN UK 2018, p. 1). The use of non-approved pesticides seems to be
widespread as well. Though farmers in Ghana report that they usually
buy pesticides from certified sellers, some also buy on markets andfrom roadside sellers (Boadu 2014, p. 35). According to the farmers,
these are often more effective, but the use of uncontrolled pesticides
could be very dangerous for farmers, the environment and for
consumers (Denkyirah et al. 2016, p. 8). Additionally, the mass spraying
activities organised by the government are conducted according toa calendar and not to the necessity of spraying (PAN UK 2018, p. 2).
Best practice would be to avoid spraying as far as possible and to use
Integrated Pest Management systems.

Environmental harm
Pesticides can cause a wide range of harm to natural ecosystems andcan severely threaten local biodiversity. Unintended effects of pesticide
use can be the reduction of highly necessary pollinators. Populationsof birds and fish can be strongly affected. Pesticides, and especially

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Neonicotinoids, are harmful to a variety of pollinators, including bees.
Though the impact of pesticides on midge flies are much less researched
there are serious indications that insecticides reduce their populations
as well, which might lead to a reduction in cocoa yields, as midges play
an important role in the pollination process in West Africa (PAN UK
2018, pp. 3–4). The adverse impact of pesticides on the health of theenvironment calls for an alternative.
Integrated Pest Management (IPM)
In conventional agricultural systems, Integrated Pest Management could
reduce the need for pesticides significantly, although implementing afunctioning IPM system will struggle with some of the same challenges
mentioned in this chapter. IPM systems are complex and farmers needtraining institutes to implement them (Bateman 2015, p. 20; PAN UK 2018,
pp. 5–7). Much as with fertilisers, the pressure to use pesticides could be
reduced by using good agricultural practices, especially in well-managed
agroforestry systems

Business model of agrochemicals

The widespread promotion and adoption of agrochemicals is one of many
examples of the cocoa sector’s attempts to find quick-fix solutions to larger
and systemic challenges. And though there are short-term benefits in theuse of agrochemicals, there are many environmental and health risks,
as described in this chapter. There is another concern cross-cutting all
agrochemical approaches, and that is the question of the business model.
Though the use of fertilisers can lead to significantly higher yields, thebusiness case for farmers is not clear cut at all. With increased use ofagrochemicals, farmers’ input costs increase, while risks are high, andremuneration is very uncertain. Farmers have to buy agrochemicals
upfront and also need to invest in additional labour to apply these
agrochemicals. They do not, however, have the assurance of receiving adecent price for the cocoa come harvest time. Where multinationals andproducer governments have the ability to hedge future sales on the future
markets, farmers are price takers. The high price volatility might lead toa situation where farmers who invested in fertilisers lose money. During
the price collapse of 2016/2017, several large cocoa companies advised
their farmers to not invest in fertilisers, as it simply was not remunerative.
Even when prices do get stabilised, as the governments of Côte d’Ivoire
and Ghana have now been doing for some time, there are other risks tothe cocoa farmer, such as adverse weather conditions, which might reduceyields – and therefore income - significantly (Ruf/Kiendré2012, p. 7; Snoeck
et al. 2016, pp. 29–30; Ruf 2016, p. 15).
Many stakeholders express fears about alleged tensions between
agroforestry and productivity. However, yields can be just as high in highbiodiversity agroforestry systems as in full-sun production (Clough et al.
2011), and there are indications that cocoa agroforestry systems can have
similar or even better economic performance compared to conventional,
full sun systems (Jezeer et al. 2017).
When communicating with farmers, the focus needs to shift frommeasuring just cocoa yields to comprehensive cost-benefit analyses
that consider food security, long term effects of intensified agriculture,and diversified income as well as costs (especially minimizing costs ofagrochemicals and labour), and ultimately and most importantly achieving
a living income.
Best practices in agroforestry cocoa and in cocoa productivity
enhancement can be combined to ensure that agroforestry does not need
to be paired with increased use of agrochemicals. programmes adopting
the paradigm of “sustainable intensification” or “climate smart agriculture”
need clear insights into these trade-offs. Furthermore, cocoa varieties
should be developed that thrive under diversified shade conditions,varieties that do not need high levels of external inputs such as fertilizers
and pesticides.

Summary

Deforestation, climate change, the loss of biodiversity, the use ofpesticides and the need for agroforestry are all environmental concernsthat are coming to play in the cocoa sector.
Cocoa production threatens rainforests globally, from West Africa,
through Indonesia, the Amazon Basin, Colombia, and the Congo
Basin. Deforestation leads to loss of biodiversity and habitat, and has
tremendous climatological consequences, as rainforests are massive
carbon storage systems and also function as ‘rain machines’ - theirdisappearance contributes to accelerating climate change. Monitoring
systems are essential first steps that must be taken, as is forest restorationand protection of remaining forests.

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Agroforestry systems can bring a wide range of ecological benefits;biodiversity conservation of flora and fauna, carbon sequestration,
preserving and strengthening soil moisture and fertility, contributing topest control, and microclimatic control such as stimulating rainfall, andmany other benefits. However, agroforestry should not replace forest
areas, and zero deforestation is not the same as agroforestry.
Global climate change as well as regional microclimate change due todeforestation already have a massive impact on cocoa production and will
do so even more in the coming years, as will land degradation throughmining and logging.
Indiscriminate and untrained use of agrochemicals is largely inefficientand endangers the health of cocoa farmers, and can lead to further
destabilisation of natural ecosystems, whilst not providing efficient
benefits to yields.
Infrastructure and investment capital are needed to grow billions ofclimate resilient trees and to distribute them to cocoa farmers all aroundthe world, and millions of farmers will need to be trained on adopting
climate smart agricultural practices.
-

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8. Enabling Environment

Most – if not all – of the attempts to solve cocoa’s major challenges havefocused on what happens on the cocoa farms. From child labour, throughdeforestation to poverty alleviation, sector and government initiatives havesought the solution at farm level.
Seeking for solutions at farm level implies that the core of the problems
lies with bad farming. This is an assumption that is as harmful as it is wrong.
Most – if not all – challenges in the cocoa sector are systemic and require
structural interventions at landscape, national, and global level. The
core of the solution lies in the enabling environment; from a legislative
framework making it mandatory for multinational corporations to source
their ingredients sustainably, through a solid and empowered position
for smallholder farmers in global supply chains, to empowering farmers
and local civil society to keep their governments accountable, supported
by transparency, due diligence and accountability systems, and open
monitoring and traceability of the sector.

Mandatory approaches through due diligence
regulations*Though voluntary farm standards might not be the beginning of asolution, placing an obligation on all cocoa and chocolate companies
to conduct human rights and environmental due diligence would makea real difference. Such an obligation would ensure companies identify,
prevent, mitigate and account for actual or potential adverse human rights
impactsthey may be involved in through their own activities or business
relationships, rather than force farmers to once again bear most of the
responsibility.

* This subchapter is a condensed and edited version of the joint position
paper presented to the European Commission in December of 2019,
which was drafted by a coalition of cocoa sector actors, including the
VOICE Network and Fern, major cocoa and chocolate companies Mars,
Mondelez, Barry Callebaut, Nestlé, Unilever and Tony Chocolonely,
and the two large voluntary standards in cocoa Rainforest Alliance andFairtrade. More information can be found at www.voicenetwork.eu/duediligence/

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Though there are existing legal routes for holding multinationals
accountable for transgressions, these are usually based on the ability of
tracing specific violations through a supply chain to the multinational.
This burden of proof creates an obstacle to the effectiveness of these
legal routes. A Due Diligence regulation is based on risk, thereby turning
around the burden of proof. This reversal is a much more realistic
approach to responsibility of global supply chains.
Level playing field
An ambitious regulation would create a level playing field andconsistency for companies operating in the sector. It would identify theactions necessary to remove unsustainable practices and would hold allcompanies accountable for failure to apply due diligence in their supply
chain by identifying and addressing adverse impacts on human rights andthe environment.
Complementarity of national, EU and global regulations
Discussion around such a regulation is being seriously conducted at thelevel of the European Union. Though predictability and consistency witha single EU jurisdictional approach would significantly increase legal
certainty for companies and enhance the possibility to act at scale and in
a consistent manner among different actors of the supply chain, a start
should already be made at national level as long as such trans-regional
regulations are absent. Furthermore, EU and EU member states shouldtake a more active and positive role in the negotiation of a UN Binding
Treaty on Business and Human Rights, which is currently being discussed
at the global level.
UN Guiding Principles and OECD Due Diligence Guidance
Any due diligence regulation should be rooted in the UN Guiding
Principles on Business and Human Rights and the OECD’s Due Diligence
Guidance for Responsible Business Conduct and should aim to ensure
protection of both human rights and high standards for environmental
sustainability.

Six steps in implementing due diligence

The OECD’s Due Diligence Guidance for Responsible BusinessConduct (OECD 2018) has described the steps involved in
implementing a due diligence obligation. Companies are requiredto:• Embed responsible business conduct into their policies andmanagement systems.
• Identify and assess the risks of actual and potential adverse impacts
associated with the enterprise’s operations, products, or services.
• Cease, prevent and mitigate adverse impacts.
• Track implementation and results.
• Communicate how impacts are addressed.
• Provide for or cooperate in remediation when appropriate.

Remediation
A regulation should include remediation mechanisms, providing
routes through which impacted stakeholders, rights-holders and theirrepresentatives can bring complaints to the attention of companies andseek to have them addressed through a variety of non-judicial and judicial
mechanisms.
Liability
The absence or lack of a legally compliant company due diligence systemshould carry legal consequences, which should be proportionate anddissuasive.
Improve rather than abandon
An essential element of due diligence is that companies shouldadequately address the issues and risks in their supply chains, rather
than encouraging them simply to abandon or avoid high-risk sourcesof cocoa. It should require companies to subject their due diligencesystems to independent third-party audit, and for annual public reportingon procedures for risk analysis, risk mitigation and remediation, andinformation on implementation and outcomes in relation to the people
and the environment.

89Holistic approaches through landscape roadmaps

90

Regulations will only be effective if they are coupled with wider strategies
that create the enabling environment required to make progress. Recent
years have shown that supply and demand must be better balanced
in order to control the price of cocoa, and a corresponding reformof agricultural policy should be tackled at least in the medium term.
An holistic approach that goes beyond the cocoa sector is missing.
This approach needs to be embedded at a national level throughthe development of roadmaps at landscape level, with time bounddeliverables.
These roadmaps should identify steps that the government and otherstakeholders must take to address deforestation, poverty, and humanrights issues, with topics to be decided by the stakeholders themselves,
looking at a range of issues including• Land and forest governance, land planning and agricultural policy,
coupled with measures to stem deforestation and roll out agroforestry,undergirded by supply management systems, capping production inorder to prevent overproduction• Strengthening the rule of law, including tree and land tenure reform, theimprovement of enforcement agencies and judicial systems,• Strengthening infrastructure in rural communities, including building
and maintaining roads, construction and staffing of quality education
at both primary and secondary school level, roll out of healthcare andsanitation facilities;• Traceability and monitoring systems, introducing mandatory national
traceability systems for cocoa beans from all origins, and systems for
tracking the impacts of the steps taken on those most vulnerable,
especially the smallholder farmers who supply most of the world’s
cocoa. It should also include systems to regularly monitor and punish
individuals who adjust weighing scales in order to cheat farmers.
Once the roadmaps have been developed and are being implemented,
the implementation must be regularly reviewed in a plan-do-check-act
cycle. Lack of progress should have consequences; implementation of theroadmap should be enforced.

Bottom up approaches throughinclusive and deliberative processes*
Deliberative Approach (involve.org.uk 2018)• Deliberation is an approach to decision-making that allows
participants to consider relevant information from multiple pointsof view. Deliberation enables participants to discuss the issues andoptions and to develop their thinking together before coming to aview, taking into account the values that inform people’s opinions.
• Deliberative dialogue builds on dialogue and consensusbuilding techniques, enabling participants to work together(often with expert input) to develop an agreed view or set ofrecommendations.
• Deliberative decision-making builds on partnership methodologies
to enable participants and decision-makers to decide jointly onpriorities and programmes. Examples include partnership bodies
and participatory budgeting exercises where power is genuinely
devolved to participants.

So far, strategies in the cocoa sector have been developed top-down,
often based on analysis and needs of the chocolate industry, or aimed
at production targets set by governments. Local stakeholders and theaffected people themselves have at best been marginally involved.
Strategies for an enabling environment must be developed and definedcollaboratively at a national or sometimes even local level, with local
ownership helping to ensure actions are fully integrated into sociopolitical and economic contexts.

* This subchapter is a condensed and edited version of the joint position
paper presented to the European Commission in September of 2020,
which was drafted by a coalition of CSOs in the cocoa sector actors,
including the VOICE Network, VOICE members Fern, INKOTA-Netzwerk,
Mighty Earth, Rikolto, and Solidaridad, Cocoa Barometer Consortium
member Tropenbos, as well as EcoCare Ghana, Fairtrade Advocacy Office, Inades Formation, Send West Africa and WCFO. Fern, Voice, et al.
These edits do not necessarily reflect the position of all the signatories
to the joint position paper.

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Although based on a set of minimum threshold criteria that should
apply globally*, these strategies should be developed through an
inclusive and deliberative approach. Such an approach goes beyond
mere “consultation”, to be a genuine discussion where stakeholders canrespect, argue, build trust, decide, and collaborate. This would give local
civil society organisations and farmers’ representatives a real seat at thetable, addressing their disenfranchisement, and countering the lack of
accountability and transparency that allows politicians, companies, andothers to act with impunity. Changing such deep structural issues takes
time, and the process should proceed with a long-term view in mind.
Speed should not be pursued at the expense of getting things right.
It is especially important that women are not (inadvertently) blockedfrom taking part – barriers to participation need to be accounted for. For
example, land ownership or entitlement should not be a requirement for
women to participate. Other factors such as literacy, education levels andgender-based violence should be identified and accounted for.

The importance of cooperatives

In the light of holistic and inclusive approaches, it is important to notethat almost all of the sector-wide efforts in cocoa reach only those
farmers that are already (loosely) organised in cooperatives. The
majority of cocoa farmers, however, are not organised, and are notbeing reached. Concerted sector-wide strategies must be developed
to reach these ‘higher hanging’ fruits, and to help them get organised.
Strong autonomous farmer organizations should become the bedrockof the sector.
The role, functioning, quality, and structure of cooperatives all need
to be clarified and strengthened. There are a plethora of different
cooperatives, from large to small, and from cooperatives created by thegovernment to ones that have developed organically, and this can lead

* Including but not limited to the International Bill of Human Rights (consisting of the International Declaration of Human Rights; the International Covenant on Economic, Social and Cultural Rights and the International Covenant on Civil and Political Rights), the ILO Core Conventions,the UN Guiding Principles on Business and Human Rights and the OECD
Guidance for Responsible Agriculture Supply Chains.

to confusion, unhelpful power dynamics and conflicts. Some suggestthat the creation of a common governance structure would be helpful,though others disagree.
For some cooperatives, internal governance is weak; many are not able
to act as advocates for their members in policy-making processes. In
some cases, cooperative structures may be mis-used as fronts by local
traders – or, in Côte d’Ivoire, by big landowners – to gain access tomoney or training. International traders have also had an influence on
the running of cooperatives, sometimes for the good, but sometimes
less so. Cooperatives must be farmer-led, professionally run, andaccountable to their members.
Cooperatives also often do not represent women farmers, as theirmembers are usually predominantly male. The low levels of female
members in turn allows the cooperatives to gear their actions(representation, service provision, advocacy) more to male farmers’
needs. Barriers that prevent female farmers from becoming members
include high membership fees and strict requirements of land or tree
ownership.
A sustainable cocoa sector requires cooperatives firstly to improvetheir own internal governance, to ensure that they become democratic
bodies which genuinely represent their male and female farmer
members, and secondly to be supported in such a way that they canparticipate effectively in multi-stakeholder policy processes. This is aprocess that will take time, resources, and potentially a review of thelaws governing cooperatives.

Effective approaches through transparency andaccountability

The history of twenty years of sustainability initiatives in the cocoa sector isfilled with good intentions combined with a lack of accountability.
A recent example is the Cocoa and Forests Initiative; a valuable and timely
initiative, bringing governments and companies together to create aframework for action on deforestation. However, it was not this initiative,
but the efforts of NGO Mighty Earth, working with local CSO organisationsin West Africa, that created a leap forward in the transparency of the sector
by pushing the different cocoa and chocolate companies to share data on
their suppliers and thereby publishing a Cocoa Accountability Map.

93

Creating transparency means empowering local actors to demandaccountability. This is also a self-strengthening process; local civil society,farmers, and individual citizens would be able to play a more involvedrole if governments and companies would operate in a transparent andaccountable manner.
94

Transparency and Accountability are essential instruments towards
implementing sustainability, and allow for a variety of improvements:
better managing and accelerating progress; identifying gaps in current
approaches – both in terms of additional investments as well as additional
impacts needed; preventing transgressions from taking place; facilitating
mitigation of effects of transgressions for farmers and cocoa growing
communities; and will bring to light available synergies and opportunities
among different stakeholders.
Corporate reporting
Corporate reporting - including reporting by CSOs - on cocoa
sustainability and human rights is often based on a principle of only
communicating successes. Lessons learned are seldom made public,
resulting in many companies trying the same unsuccessful approaches.
Additionally, most communication is based solely on outcomes andnumbers in absolute terms and not on the impact that these expenditures
might have had, nor on how they relate to the size of the challenge. Data
from projects is kept proprietary, even when they are co-funded withpublicly financed development support from consuming governments,
such as through financial support from the IDH Sustainable Trade
Initiative or other similar initiatives. Indicators need to be measurable,
and results need to be publicly available for measuring progress. Careshould be taken to ensure data is comparable, e.g. through collaborating
on indicators and coordination of reporting periods. For all shared data
projects, baseline studies should be carried out, and living income
benchmarks should be an integral part of the design. Lastly, data
should be based on impact, not only on effort; for example, it is not only
the building of a school that is the relevant data, but whether school
attendance rates went up and illiteracy went down.
Public services and resources
The provision of social, educational and health services, the developmentof local communities, and the protection of the environment, are mainly
the responsibility of national governments and local authorities. Cocoa
growing communities suffer from a lack of schools and teaching material,
have insufficient access to health care and clean drinking water, bad roads,
no electricity, and other insufficient public infrastructure.

For national and local governments to improve these public services,extensive financial investments are required. Despite the fact that thecocoa producing regions generally provide significant cash revenues
to governments, not much of this money reaches the regions where thecocoa is produced. While recognising that governments have sovereignty
on expenditure, investments in the regions where cocoa is grown must be
increased. There is a real need for financial transparency on revenues, aswell as on expenditures on public services and the financing and levelsof national cocoa sustainability funds or buffer stock systems, if present.
Additionally, work must be undertaken to improve internal structures andfight corruption.
Monitoring and traceability
The introduction of national traceability systems for cocoa beans in
producer countries will be essential in order for companies to fulfil
their due diligence obligation, and for governments to implement theroadmaps for the national cocoa frameworks. Traceability requires afull mapping of the landscape, including conditions and location of
production throughout the supply chain, down to the cocoa farm level.
The results of this mapping should be available through free, public, andusable platforms that include not only supply-chain information but also
land-use and deforestation data, and data concerning farmers’ income
and child labour. Regular monitoring of progress should be done in acollaborative and inclusive way, ensuring that local civil society and farmerbased stakeholders are empowered members of the monitoring bodies
alongside government actors and industry.

It is encouraging that the Cocoa and Forest Initiative signatories agreed
in November 2017 to put in place robust joint monitoring mechanisms,
and that official or semi-official mapping of land use and deforestation has
proceeded in both Ghana and Côte d’Ivoire. However, these monitoringmechanisms have not yet been implemented. Most cocoa traders andchocolate manufacturers have at least begun to disclose their direct cocoa
supply chains, making monitoring more feasible, even if their indirect
chains remain opaque, and probably conceal both legal and illegal
deforestation as well as child labour and other human rights abuses.

Summary

Most challenges in the cocoa sector are systemic and require structuralinterventions at landscape, national, and global level. The core of thesolution lies in the enabling environment. Mandatory approaches that lead

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to environmental and human rights due diligence regulation are needed.
A solid and empowered position for smallholder farmers in global supply
chains provide a bottom-up approach. Transparency would allow farmers
and local civil society to keep their governments accountable, supportedby due diligence and accountability systems, as well as open monitoring
and traceability of the sector.

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Key Recommendations

Necessary Change in the Cocoa Sector

99

Human
Rights

CLMRS

Environmental
Protection

Due
Diligence

Community
Development

Traceability
Agroforestry

Women's
Empowerment

LivingIncomeLand and
Tree Tenure

Access to financeHigher Yields

Access to Infrastructure

Higher Farm Gate Prices
Income Diversification

Farmer Organisation & Empowerment

Necessary Enabling
Environment
Mandatory
Regulations

Transparency &Accountability
Holistic LandscapeApproaches

Bottom-up
Inclusion

Key Recommendations
100

For all stakeholders• Engage with a renewed and increased urgency to scale up efforts sothey are commensurate to the size of the problem, including a significant
increase in financing by companies, governments and donors, with a
specific focus on the hard to reach farmers.
• Implement changes not only at a technical level, but address issues aroundpower and political economy• Implement a sector wide commitment to living income, and make net farmer
income a key performance indicator of any sustainability programme• Implement a global moratorium on deforestation and use of highly
hazardous pesticides.
• Ensure that all sustainability approaches are tailored to include women• Involve farmers and civil society as co-decision makers in all sustainability
collaborations through inclusive and deliberative processes• Develop a common language on traceability, and make data publicly
available• Develop effective transparency and accountability mechanisms, including
greater transparency on value distribution• Develop affordable and accessible financing and insurance products forfarmers• Coordinate the cocoa sector to address duplication of efforts and multiple
targeting of farmers in sustainability initiatives.
For companies• Develop and publish a living income policy, including a commitment topaying a farm gate price sufficient to cover a living income of at least $3.100
in the cocoa season 2021/2022• Design and implement CLMRS to cover the entire supply chain• Develop and implement full supply chain traceability to farm level, including
remaining forest areas• Set up and implement an holistic environmental and human rights Due
Diligence policy based on the OECD Due Diligence Guidance
For voluntary standards• Make Living Income – and the payment of a living income reference price ofat least $3.100 in the cocoa season 2021/2022 – a key requirement• Put more focus on the Trader Codes of Conduct, to ensure multinationals
change their practices as much as cocoa farmers need to• Ensure that sustainability standards are subject to fair, transparent andindependent third party audits and verification

For governments of cocoa consuming nations• Introduce environmental and human rights due diligence throughmandatory regulatory frameworks.
• Make publication of data mandatory for projects that are publicly (co)funded.
• Facilitate debate and concrete action about the massive market
concentration and resulting power imbalances, especially regarding theposition of smallholders.
• Review and remediate where existing competition laws hinder
sustainability, especially regarding fair pricing policies.
• Support and engage with industry and producing governments indefining and requiring living farmer income.
• Pursue partnership agreements with cocoa-producing countries toensure good governance in the cocoa sector and a transition towards
sustainable production
For governments of cocoa producing countries• Collaborate to drive up farm gate prices for cocoa farmers, whiledeveloping supply management policies on a regional and global levelto avoid further oversupply.
• Develop and implement holistic national agricultural policies,
supporting farmers to diversify from cocoa and implement good
agricultural practices.
• Increase transparency and accountability of spending and efforts.
• Urgently develop national monitoring and traceability systems• Improve rural infrastructure, including roads, schools and health care.
• Implement and enforce protection of remaining forests, combined withthe reforestation of illegally deforested areas, whilst ensuring protectionof human rights, including those of farmers who operate in protectedareas.
• Ensure the elimination of the use of highly hazardous pesticides in cocoa
production and promote other alternatives including integrated pest
management and agroforestry systems• The Ivorian government should immediately cease their ban on
rejuvenation and on distribution of seedlings and put in place supply
management solutions that do not forbid farmers to improve theirproduction practices.
• Put measures in place to ensure that accurate weighing scales areused to weigh cocoa beans at the farmer levels in order to eliminate orminimise cheating of purchasing clerks at that level.
• Identify and strengthen producer associations

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Justifications
ColophonJustification of Figures and Tables

Page 13 Growth of Cocoa Production in the Top 8 Producing
Countries
Source: ICCO
Page 21 Production / Consumption
Source: ICCO 2020b, Table 2, 40
Page 31 Tonnages of Traders and Processors
Source: Cocoa Barometer 2020 questionnaire to all participatingcompanies
Page 33 Tonnages of Chocolate Brands
Source: Cocoa Barometer 2020 questionnaire to all participatingcompanies
Page 35 Certified Cocoa Sales
Source: Fairtrade: Cocoa Barometer 2020 Questionnaire
Rainforest Alliance: Cocoa Barometer 2020 Questionnaire, Cocoa
Certification Data Report 2019
Page 42 Income Distribution of Cocoa Farmers
Source: Tyszler/ Bymolt/Laven 2018
Page 44 Average Yield Per Hectare
Source: data provided by companies
Page 50 Long Term Cocoa Price
Source: LMC 2020
Page 53 Current Farm Gate Prices / Desired Farm Gate Prices
Source: Fountain/Huetz-Adams January 2020
Page 58 Definitions of Child Labour
Source: NORC page 34

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Colophon

104

Citation: Fountain, Antonie C. and Hütz-Adams, Friedel (2020):
2020 Cocoa Barometer
Text: Antonie C. Fountain (Voice Network)
and Friedel Hütz-Adams (Südwind Institut)
Additional contributors: Raymond Owusu-Achiaw (Conservation Alliance
Ghana), Obed Owusu-Addai (EcoCare Ghana), Clare Bissel, Julia Christian,and Saskia Ozinga (Fern), Sjoerd Panhuijsen and Juan Pablo Solis(HIVOS/SAFE Platform), Pauline Epelekou (Inades Formation), Elsa Sanial(independent), Evelyn Bahn and Johannes Schorling (INKOTA-netzwerk),
Etelle Higonnet (Mighty Earth), Uwe Gneiting and Lilian Nkengla (Oxfam
America), Bart van Besien (Oxfam Belgium), Silvie Lang (Public Eye),
Abdulahi Aliyu (Rikolto), Sandra Sarkwah (SEND Ghana), Ruth Bennett(Smithsonian Conservation Biology Institute), Isaac Gyamfi, Mariana
Pareira, Isabelle Roger, Boukje Theeuwes and Suzan Yemidi (Solidaridad),
Henk Hoefsloot, Rosalien Jezeer and Maartje de Graaf (Tropenbos
International), Johanna Jacobi (University of Bern), Eric Mensah Kumeh(University of Hohenheim).
We appreciate the effort of companies and standards bodies in answering
our questionnaires, as well as the many respondents to the Consultation
Papers that were the lead-up to the 2020 Cocoa Barometer.
The final responsibility for the content and the views expressed in thispublication lies solely with the authors.
The 2020 Cocoa Barometer is based on publicly available data as wellas the off-record information provided to the authors. The authors
welcome any corrections to data provided and challenge all actors of thecocoa sector to be much more forthcoming with public data on the core
challenges the sector faces.
Design: Roelant Meijer (Tegenwind)CopyrightThe 2020 Cocoa Barometer is available as an interactive publication
online, as a digital download, and as a hardcopy printed publication. The
infographics used in this document can also be downloaded separately.
We encourage the use of this data in other publications, provided proper
references are given. Published under Creative Commons License
Attribution-ShareAlike 4.0 International

Published by the Cocoa Barometer Consortium.
Administered by the VOICE Network.
The Cocoa Barometer Consortium consists of ABVV/Horval, Be Slavery
Free, European Federation of Food, Agriculture and Tourism Trade Unions(EFFAT), Fair World Project, Fern, Green America, Hivos, INKOTA-netzwerk,
International Labor Rights Forum, Mighty Earth, Oxfam America, Oxfam
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