cocoa
barometer2022

cocoabarometer
Antonie C. Fountain / Friedel Huetz-Adams

2022

Scope and intentions of the 2022 Cocoa Barometer

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Index
1.		 Introduction —­ 42.		 Living income ­— 8
3.		 Environmental protection —­ 324.		 Human rights ­— 52
5.		 Racism, representation and decolonisation —­ 68
6.		 Market developments —­ 74
7.		 Enabling environment ­— 88
8		 The path to living income in Cocoa ­— 104
9.		 Key recommendations —­ 114
10. Justification and colophon ­— 118
11. References ­— 124

The 2022 Cocoa Barometer provides an overview of the current
sustainability developments in the cocoa sector and highlights criticalissues that are not receiving sufficient attention at present, discussing
a broad range of social, economic, and environmental issues. It is an
endeavour to stimulate and enable stakeholders to communicate anddiscuss these critical issues. Cross-cutting throughout this document is
the observation that we are sorely lacking both quality data and global
collaboration to solve the challenges the sector faces.
The content of the 2022 Cocoa Barometer is the result of consultations
with civil society in the cocoa producing countries, lengthy conversations
within the Cocoa Barometer Consortium, and of much data from cocoa
and chocolate companies, collected through an in-depth questionnaire.
Three in-depth studies were released in the run-up to the 2022 Cocoa
Barometer, providing focussed discussions on Latin American cocoa
production, Living Income, and Transparency & Accountability.

A reader’s guide
Text in Green: Data from the questionnaire
The large chocolate and cocoa companies were all sent aquestionnaire for this Barometer, on a wide range of issues relating
to their cocoa sustainability. The text in green boxes such as this one
analyses the data submitted by companies. It is important to notethat the data provided is self-reported by companies, so it might
therefore be subject to bias and interpretation.

Text in pink: definitions and deep dives
Sometimes, a specific issue needs some definition or a deeper dive,in order for the context and importance of a subject to be properly
understood. That kind of text can be found in a pink box such as this
one.

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5

1. IntroductionAfter two decades of discussions on sustainability in the cocoa sector, thequestion rises “why haven’t we solved these problems yet?” Indeed, it
sometimes feels as if every two years the Cocoa Barometer writes about thesame issues. In fact, additional challenges have been added over the years.

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Several interrelated challenges come to the foreground aroundenvironmental protection. Deforestation and loss of biodiversity are driven
by cocoa production, climate change is both affecting cocoa production andmade worse by cocoa-driven deforestation, and agrochemical use is causing
both environmental damage and is hazardous to those applying them.
Child labour continues to be a challenge in West African cocoa production,
where children are involved in age-inappropriate and hazardous labour.
Gender inequality raises barriers for women, both as rightsholders and as
agents for change.

The Cocoa Problem Tree

Child Labour& Human Trafficking

Poverty &Malnutrition

7
Lack of Education& Healthcare

Too often, sustainability decisions are made far from the reality of cocoa
growers. Decisions are made by those in power, ensuring that thesedecisions are in line with their interests. As such, decades of calls for higher
prices have so far not been answered. Instead, approaches have been
pursued focussing on what the farmer needs to do differently, such as higher
yields and diversified production.
Research from this Barometer shows that the favoured approaches so far toraising farmer poverty are not going to bridge the income gap; higher yields
do not necessarily lead to increased net income but do lead to greater risks
for farmers. Without significantly higher farm gate prices, sustainability in thecocoa sector is a pipe dream.
In order for cocoa to truly become sustainable – where cocoa farming
households are able to earn a living income, where nature is protected andflourishing, and where all rights (including those of children, women, andother marginalised groups) are safeguarded – real change is necessary.
Systemic change.

High Use ofAgrochemicals

Environmental
Protection

Human
RightsLabour Rights
Violations & Unsafe
Working Conditions

Climate Change

The two branches of the cocoa problem tree - environmental protection andhuman rights - both stand on a tree trunk of farmer poverty. This poverty is
exacerbated by the current cost-of-living crisis.
Living income as a concept has become a key objective for the cocoa sector
in the past few years, however it hasn’t changed core business activities
so far. The Ivorian-Ghanaian government collaboration to drive up market
prices is an important step, but so far farm gate prices are nowhere near
remunerable.

Deforestation
Loss of& Degradation Biodiversity

LivingIncomeLow Farm Gate Prices

Rising Costs of Living

Low Yields

Rising Production Costs

High Risks

In that light, the development of supply chain legislation in cocoa consuming
nations is a very positive development, although their level ambition as wellas the way they will be implemented will determine whether they will havethe desired outcome.
The sector change that is needed cannot just come through better farming; a
key approach needs to be to look at the enabling environment of the cocoa
sector. Systemic changes and improvement are necessary in governancepolicies and in purchasing practices. Only when these are in place is there abusiness case for thriving farmers.

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2. Living income

10Living Income is the net annual income required for a household in aparticular place to afford a decent standard of living for all members ofthat household. Elements of a decent standard of living include food,water, housing, education, health care, transport, clothing, and otheressential needs including provision for unexpected events (Living Income
Community of Practice 2020).
There are two reasons to begin this Barometer with the topic of Living
Income. Firstly, Living Income is a human right in and of itself, and as suchdeserves a centred position in any conversations around the changes
needed in the cocoa sector1. Secondly, Living Income is also the necessary
precondition for all the other challenges in the cocoa sector to be properly
addressed.
Poverty as a driver
Farmer poverty is a driver of just about every problem in the cocoa sector;
deforestation, child labour, and gender inequality are all made so muchharder to tackle if cocoa household incomes are not raised significantly.
When farmers must choose between feeding their family, and not
cutting down old growth trees, it is not a choice. When they must choose
between feeding their family or sending them to school, it is not a choiceeither. Without a living income for cocoa farmers, cocoa will never besustainable.2
Living Income has become mainstream
The past years have seen a series of major developments on the topic ofliving income. The introduction of the Living Income Differential by Ghana
and Côte d’Ivoire in 2019; the development of Living Income Reference
Prices; Living Income Benchmarks becoming available for the major cocoa
producing countries; several European Initiatives on Sustainable Cocoa(ISCOs) making Living Income a key objective; all the large cocoa and1

2Though living income is a human right, the sustainability legislations that havebeen or are being developed, such as the French Devoir de Vigilance and the
EU Directive on Corporate Sustainability Due Diligence at best obliquely referto living income. It must be unambiguously clear that living income is a key
requirement for any multinational to comply to their obligations of Businessand Human Rights.
However, most sustainability programmes – as well as proposed legislations- only aim to address living income in cocoa through either indirect approaches - often as a result of buying into the myths described below – or byskipping living income directly and trying to tackle issues such as child labouror deforestation without a holistic approach to solving the underlying poverty.

chocolate companies have public position statements on living income.3
Living Income has become a mainstream concept in the cocoa sector.
A starting point or a finish line?
Living income is the minimum level of decency for a household, it shouldbe the starting point, not a finish line. Still, most sustainability approaches
merely see living income as an aspirational goal that will most likely not be
achieved.
Farmers poverty persists
Many farmers are still not earning a living income. In fact, most are very
far from earning a living income, and not even moving towards it. Thoughdata is hard come by, the current cost of living crisis – especially coupledwith rampant inflation in Ghana – is most likely only making things worse.
In the meantime, most actors are largely pointing at what others need tochange in their approach, rather than being willing to change themselves.4
Current approaches aren’t working
Despite significant evidence that current approaches to raise farmer income have marginal impact at best, most cocoa and chocolate companies
continue to operate business as usual.5 Increasingly, company representatives admit this problem, stress the necessity of a living income, andacknowledge that price is a necessary part of the equation to reach that.
However, in practice, not a single large chocolate or cocoa company ispaying higher prices at farm gate level. Even if there are tools available
to support prices, such as the LID, purchasing departments strive to limit
prices, and farmer poverty is not taken into consideration in their daily
practice.
Unchanged business practices
Though most companies have made general statements in support of
Living Income, there is an overall lack of concrete commitments towards

3

Albeit none with concrete commitments on what they are going to differently
in their core business to achieve that goal.

4

In the words of a former senior executive at Nestlé, “it seems that these oldstyle sustainability interventions have been superb at guaranteeing future
supplies for factories whilst keeping prices low. The unintended consequence
has been the perpetuation of the main challenge that farmers face: poverty.”

5This is also a clear sign that companies have not adopted properly implemented human rights due diligence in their value chains. In a due diligenceapproach, if its current solutions are not working, a company needs to revise
its chosen strategies. This process needs to be repeated until the issue is nolonger a problem.

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a living income. Companies, by and large, are not changing their corebusiness practices in order to help achieve a living income. There has
been very little public conversation about the industry’s business model,
including about how they set the prices they pay. Company purchasing
practices are still largely aimed at avoiding higher prices. Simultaneously,
there is a lack of transparency on the part of governments from producing
origins on revenues earned from forward sales and the guaranteed
producer prices paid to cocoa farmers.
No one is doing what they should be doing
Both industry and governments will need to significantly change theirbusiness as usual. Let us be very clear; not a single stakeholder group is
currently doing what they should be doing to ensure farmers achieve aliving income.

Bridging the Living Income Gap; data from the questionnaire
Many companies claim to want to support farmers to earn a living
income. OFI, Cemoi and Mars mention concrete targets of farmers
covered by a project which should lead to a living income in a
specific year.

Asked about how they plan to achieve it, nearly all companies
mention training in Good Agricultural Practices (GAP), income
diversification, and Village Savings and Loan Association (VSLA).
Others support farmers to get access to inputs and credits.
Supporting agroforestry systems is also mentioned as a tool toincrease farmers income.
On top of this, Cemoi and Nestlé both have measures to pay
farmers more money. Cemoi claims to pay a premium for quality
and sustainability of 10 to 20% of the cocoa price, and Nestlé has
its Income Accelerator Programme which pays extra incentives forhouseholds that undertake specific sustainability efforts (see box).
Though a few companies indicate a “mind shift” or “new thinking” istaking place on this topic in cocoa, most companies are continuing
to do the same thing they have been doing for decades: present
higher productivity and diversification as the most important solution
to achieve a higher income of farmer. As this chapter argues, thesehave only a limited impact on farmer poverty, and will only work if
companies engage in Good Purchasing Practices, and governments
develop and implement Good Governance Policies.

As such, the targets above must take into consideration that so far,
all industry attempts to bridge the living income gap have failed
significantly.

Resistance to change
Resistance to the necessary change is real. A lot of this resistance has
found its way into a wide range of assumptions, simplifications, andsometimes plain wrong ideas around why living income hasn’t beenachieved yet. A deeper dive into these can be found in the Living
Income Compendium, released by the Cocoa Barometer Consortium in
September 2022, of which this chapter is a highly abridged version.
Despite farmers poverty companies are rich
There is an unspoken assumption that farmers of commodities are
expected by default to be poor. While only the outlier cocoa farmers are
expected to even reach the baseline of a living income, many companies
are reporting record profits – despite a pandemic and a global cost-ofliving crisis. Additionally, often a relatively small part of the price paid byconsumers would be sufficient to increase farmer income significantly.

Good Agricultural Practices6

Most approaches to raise farmer income only consider a very limited
set of solutions, and these are predominantly at farm level, aimed at
Good Agricultural Practices. And though Good Agricultural Practices area necessary component of a healthy cocoa sector, this has dominatedthe conversation for the past decade, at the expense of other necessaryinterventions.

Productivity per hectare: data from the questionnaire
For more than a decade, companies have been repeating over
and over that farmers could double or even triple yields per
hectare. Innumerable projects were set up to encourage theseyield increases. Despite all these efforts, yields are nowhere near
being doubled, let alone tripled. In fact, in some regions, yields are
declining. There are various reasons for this, including low adoption
rates, ageing trees (and possibly ageing farmers), changing
weather patterns, pests and diseases, depleted soils, and a lack of(affordable) inputs and credit.
6

The calculations in this chapter are based on a model which is explained infurther detail in the Südwind paper which can be found here.

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labour days

labour days

Cote d’Ivoire

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Cocoa companies put the average yield around 521 and 534 kg per
hectare for Côte d’Ivoire and Ghana respectively. These numbers
are on the high side compared with other datasets. There can beseveral reasons for this. Most farmers inside company programmes
are usually better organised than farmers who aren’t in sustainability
programmes, which might mean they have better access to inputs,
training, and market, that makes for higher yields.

Effects of higher yield on net income (based on kiloprice $ 1,50)
farm sizes based on current GPS measurements: 3ha CIV, 2ha GHA+ 20 %
living income15– 20 %

These averages are still significantly higher than the median (half ofall farmers) due to outliers. It is not unreasonable to estimate that themedian farmer grows 350 kilo per hectare.

Côte d’Ivoire

800

Higher productivity

Recent reports show that productivity increase programmes do not havean inherent positive effect on the net income of cocoa farming households(Waarts/Kiewisch 2021, IDH 2021, Dalberg 2018).

Ghana

550

kg/ha

Ghana

800

1000
kg/ha

550

1000

– 60 %

kg/ha

kg/ha

kg/ha
350

– 80 %

350

kg/ha

50

kg/ha

– 40 %

kg/ha

75

labour days

150

200

50

75

150

200

labour days

On its own, increased productivity cannot be the strategy to bridging theliving income gap, for several reasons.
Firstly, it requires significant investments in inputs and labour resources,
which are neither available nor affordable for most cocoa farmers. Even
if they were, investing in the farm comes with significant risks, especiallycompared to the possible return on investment; farm gate prices could
decline steeply (as they did in 2016/2017), extreme weather conditions
can cause bad harvests, as can pests and diseases (such as the Cocoa
Swollen Shoot Virus which is spreading in Ghana).
Secondly, increasing productivity requires an increase in labour hours.
Even with current production levels, many cocoa farmers in major
producing countries find it difficult to find enough labour for their farms
during peak times. Every cocoa growing household has a finite amountof available labour days to spend on cocoa; a household in Ghana has
246 available labour days, in Côte d’Ivoire 272. If more labour than this isnecessary, this will require hiring additional labour, if it is available in thefirst place. This is – not coincidentally – also one of the reasons why families
revert to household members to help with the farming, increasing the riskof child labour.
If only 10% of all farmers would double productivity and by this fulfil therequirements of many companies, the ensuing oversupply would cause

prices to fall drastically. Any productivity increase drive must be coupledwith equally strong measures to curb overproduction.
The net income effects of productivity increase
With sufficient available data, it is possible to model what would happen to
the income of a household with increased yields, provided this hired labouris also paid a living wage (figure 1). Unsurprisingly, cocoa by itself does notbring a living income at present yield and price levels. But the model also
shows that achieving higher yields might lead to lower net income, due toincreased costs in inputs and labour. The exception here is for farms that are
currently producing at the 350 kg per hectare level; getting up to around
550 kg per hectare does have benefits.7

7This calculation of a potential increase is based on the assumption thatsurplus labour within the family is available to invest more time in the plantation, and that this leads to higher productivity. The situation for single womenhouseholds, farms run by older farmers or sick persons might be worse, as
these groups need to hire labour to achieve productivity increases.

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Hired labour
The living wage in Côte d’Ivoire is US$11 per day, and the rate is evenhigher for Ghana with US$13,5.8 This means that 10 additional hired labourdays per hectare have to lead to nearly 100 extra kilos of cocoa only to
pay the additional labour bill. One could make calculations based on
current wages paid to labourers, but in that case, the model would still
fail to provide an adequate living income and living wage approach. The
fact that most calculations don’t take the labour requirements into accountcould be one of the reasons why the cocoa sector has such a problem withchild labour, as it could be cynically seen as a supply of free/cheap labour.

Labour: data from questionnaire
Reliable data on labour input per hectare are still absent, at least
publicly. Even less companies shared this data with the authors
than for the 2020 Cocoa Barometer. The spread of the numbers forcocoa grown in a system with low productivity is between 25 days
per hectare/per year and 85 days per hectare/per year. The figures
for plantations where good agricultural practices are applied varyfrom 65 to 130 days. One company reported that for highly intensive
cocoa production with best agricultural practices 287 days per
hectare/per year need to be invested.

Tenants and sharecroppers
Many of the people 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.
This includes many of the income measurements by companies. Those
datasets that seem to show farmers that are reasonably well off are often
of such a farm size (e.g. Habraken/Laven/Steijn 2022), that the authors of
this paper believe sharecroppers/tenants might be doing some of thelabour. They are, however, not taken in the income calculations, and thiswill be something the cocoa sector needs to look at in far more detail.
Sharecroppers and tenants often do not have the same land and tree
tenure rights as landowners. Though they do a lot of the farming work,

8

Some critics state that instead of a living wage, these calculations should bedone based on current real costs of hired labour. However, that would thennormalise massively underpaying wage workers. Therefore, the calculation
is based on the latest scientific calculations (Anker Methodology) on living
wage. the calculation uses for Ghana the figures from spring 2022. Nonetheless, the figures should be recalculated latest in spring 2023.

they therefore often don’t have the right to decide how to grow theircocoa. As such, they are not able to actively invest.
This omission of sharecroppers and tenants is not just an issue whenit comes to farmer income, but also has implications on their ability toprotect the environment, affects the labour rights of sharecroppers andtenants, and runs the risk of policy choices being focused more on theinterest of farm owners than to solving the challenges of those people
doing the actual work.

Diversification

The cocoa sector’s second major strategy – besides productivity increase– to increase farmers’ income 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.
Cocoa producers in both Côte d’Ivoire and Ghana already have a strongly
diversified income structure (Bymolt/Laven/Tyszler 2018). Just as withthe strategy to increase productivity per hectare, diversification requires
investments and labour. The same constraints and risks are applicable.
Furthermore, cocoa and chocolate companies should not outsource theproblem of non-remunerative cocoa to other sectors; cocoa should be a
remunerative crop in and of itself.
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. Other sectors with poor farmers in the value
chain also promote diversification, and some of these crops grow in thesame regions as cocoa. The fact that these farmers are also poor signifies
a feedback loop of poverty, with many different sectors not able toprovide a living income, all looking to other crops to solve their problem.
This vicious circle needs to be broken, and it can only be done throughincreasing farmer income.
To achieve diversified production, farmers need to invest in their farm, andcarry all the risk, while companies hope that income from other sources
brings farmer in a position to sell cocoa as cheap as they are doing now.

Farm size

Some farms, the argument goes, are too small to be economically viable.
However, it is highly likely that most larger farmers that currently seem

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to be earning a living income – in the limited datasets that are publicly
available – are helped by sharecroppers or tenants whose needs are notfactored into the calculations. The moment a single household cannot
cover all the work it would have to hire labour, which is as limiting aphysical factor as is farm size. It might even be that instead of a minimum
viable farm size, it is more realistic to speak about a maximum viable farm
size per household.
If one were to accept the argument that some farms are too small to be
viable and would somehow be able to increase the average farm size, theeffect of higher yields become negative for most farms as larger farms
require more labour. Lower productivity not only comes with much lessrisk for farmers, increasing productivity on large farms might even have anegative impact on net income, as more land requires more labour.
Furthermore, increasing farm size is easier said than done. It requires
significant reforms in land and tree tenure, as well as a committed ruraldevelopment strategy at governmental level. Bigger farms, at least at the
short to medium term, does not seem to be a very viable strategy for the
majority of cocoa farming households.

Farm size: data from the questionnaire
Most figures on average farm size in older studies might be wrong,as they relied on self-reported figures collected from farmers who
often overestimate their farm size. Using GPS polygon mapping,hundreds of thousands of farms have been mapped in the past
years. Most companies shared (some of) the outcomes of thismapping for the questionnaire.

Farm sizes are a lot smaller than previously estimated, but there
is a significant discrepancy in data between traders/grinders andchocolate brands9. In Côte d’Ivoire, according to data from eight
traders/grinders, average size is 3 hectares. According to threechocolate producers, it is 3.7. The discrepancies are bigger for
Ghana, where the farm size is 2 ha (according to eight traders/grinders) and 3.1 (according to three chocolate companies). The
average figures for other major cocoa producing countries are
Nigeria 2.3 ha, Cameroon 3.3 ha, Indonesia 1.5 ha and Ecuador 5.8
ha. But this is based only on 2-3 companies per country.

9

Probably because of the selection bias of chocolate companies, who tend towork more with established and organised farmers with larger farms.

Averages hide a lot of nuances, however, as there is a significant
spread in the data on the farm sizes. A better metric often is tolook at the median, but only four datapoints were available, two for
Ghana, two for Côte d’Ivoire. These were all roughly 0.75 ha lower
than the data for average farm size.

Pensions

Many cocoa farmers are ageing, but old age does not exempt farmers
from having to do the backbreaking labour. A possible solution could be
to introduce national pension schemes10 in West Africa, much like wasdone in land-redistribution policies in Western Europe in the 1960’s and1970’s.
Elderly farmers would be able to receive a lifetime pension, in return forgiving up their farming land to the government. The government could
then use this land to instil tenure reforms, making new farms available toa younger generation, many of whom could be offered these farms in lieu
of their vacating the cocoa farms in currently classified forests. An extra
requirement could be that the new farmer commits to an agroforestry
approach, combined with a set of technological improvements andextension services to make the new farm more professional.
Such a solution could be a win-win situation for all parties involved; elderly
farmers can have an opportunity to stop labouring, younger farmers canbecome modern and professional cocoa farmers, protected areas are
made available for reforestation, yields can go up, and governments havea means to enable national agricultural policies to reduce overproduction.

Common approach to collecting data
The Cocoa Barometer has been repeating the same message for over a
decade now: sustainability data needs to be made public, and it needs
to be done in a standardised way that allows for proper comparisonand evaluation.
A common approach to collecting farm data does not exist yet, butshould include polygon mapped farms, including all cocoa plots of thehousehold• data should differentiate between productive cocoa plots, and non-

10 Though Ghana recently introduced a pension scheme for cocoa farmers, thisdoes not seem to be coupled with any broader rural or agricultural development policies.

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productive plots, such as diseased or freshly planted areas• data should be made available not just on averages, but also on
means• the database should allow to identify regional differences• yield measurements should be more accurate• field tests should identify the workload for different agricultural
practices

Gender and income

Gender inequality remains the rule rather than the exception in many
cocoa growing regions. This is deeply problematic, both because genderequality is a rights issue of itself, but also because women are change
agents in and of themselves. Creating gender equality is one of thesmartest and most effective ways to tackle a wide range of problems, fromdeforestation through child labour to raising household income.

Land tenure
The absence of legal access to land or land title registration effectively
blocks women from key opportunities such as achieving financial accessor admission into cooperatives, as farm ownership is often a major
requirement for joining a cooperative.

Customary land rights in Côte d’Ivoire
In Côte d’Ivoire, the exploitation of rural land is governed by Law No.
98-750, which recognizes the customary rights of communities overtheir land. The law requires the conversion of these customary rights
into legal rights through the obtaining of the land certificate and thenthe land title. Since 1998, the deadline for converting customary rights
into modern rights has been extended several times. The last deadline
expires in 2023, however, so far only 4 to 5% of rural land has a land
certificate.

Female headed households
Many of the households that have been identified as ‘high risk’ forpoverty are headed by females. The solution for these households is not
to transition them out of cocoa, but to ensure that women’s rights arerespected and structural barriers they face are eliminated.

In a context of land pressure, this atmosphere of insecurity of
producers on their land deserves special attention, both regarding
customary rights of communities on their land, as well as regarding thepreservation of family farming.

VSLAs
The way most programmes so far have approached gender and income
is primarily through Village Savings and Loans Associations (VSLAs) and/or alternative income generating activities focused on women. Very little
is done to strengthen the position of women as landowners and cocoa
farmers themselves.

Recipients of payments
Women are often not the recipient of the payments; usually, the male
household members sell the cocoa while women work on the farm. Thismeans that the money may not directly get to the woman farmer, nor may
she have a say in deciding how that money is spent. Women have muchhigher rates of illiteracy and innumeracy, and also have a reduced accessto markets. They do not have the same access to credit and inputs needed
to professionalise.

Position of women in male headed households
A key challenge is to strengthen the position of women in male headedhouseholds. The work that women undertake on farms, as well as inhousehold care, is often invisible and unpaid. Women shouldn’t be looked
at as merely wives of cocoa farmers or ‘helpers’ or ‘supporters’ of theirhusbands, doing ‘light tasks’ on their husbands’ farm; they are very muchessential to cocoa farms.11 Despite this contribution they can have little tono say on how household income is spent.
11 Their work often includes planting, weeding, harvesting, and fermenting
cocoa beans, collecting water and wood for fuel, carrying the plucked/fermented cocoa beans through a long-distance for drying at homes before they
are further sent for weighing at sheds, caring for children and elders, washing
the clothes - particularly gear of those working on farm. As well as cooking
and taking the food to the male farmers in the cocoa groves, etc.

Representation
Women often lack representation in community governance, especiallyin leadership. Even when women are the direct recipient of interventions,prevailing social norms can contribute to a lack of socio-economic
visibility, agency, and power.
Gender specific approaches necessary
The design of interventions, policy, and trainings do not always account or
accommodate for the barriers that women farmers such as time poverty
and disproportionate care work. Women do not automatically benefit
from higher incomes. Therefore, every single programme and intervention

21

50

75

150

200

50

labour days

must have a gender-specific approach, informed and validated by womenfarmers, ensuring rewards are distributed equally, and risks are sharedjustly.

22

Cote d’Ivoire

price increace toprice increace to

$2,25

$3,0

$1,5

23

+ 20 %
living income– 20 %– 40 %– 60 %
550 kg/ha

800 kg/ha

1000 kg/ha

350 kg/ha

550 kg/ha

800 kg/ha

1000 kg/ha

350 kg/ha

550 kg/ha

800 kg/ha

1000 kg/ha

12 In addition to the Living Income Reference Price – which is voluntary in the
Fairtrade system – Fairtrade has a mandatory miminum price, which guarantees that prices can never go below a certain level. At the time of writing,this means that Fairtrade is paying $311.41 per tonne extra for Côte d’Ivoire,
where 70% of their sales are from.

Ghana

350 kg/ha

Though there are some caveats to be placed at this system – especiallyaround their requirement for farmers to grow 800kg per hectare – it isat the moment one of the only systems in place that is paying cocoa
households significantly more for their cocoa, in an attempt to bridge
the living income gap.

200

labour days

farm sizes based on current GPS measurements: 3ha CIV, 2ha GHA

An often-heard statement in conversations is that we shouldn’t only
talk about price as the driver to living income. This, however, is a false
statement: there are no approaches that only look at price to solve theincome gap. It is a useful way to deflecting away the key point, which isthat higher prices must be part of the solution. While raising prices might
not help the struggling farmers to completely reach a living income, itwill nonetheless help them increase income, sometimes by significant
percentages.

Living Income Reference Prices
One way to ensure farmers receive higher farm gate prices is byimplementing Living Income Reference Prices (LIRP). The principleof a LIRP is that the farm gate price determined by the market issupplemented by additional payments direct to farmer to allow thehousehold to earn a living income. Developed simultaneously by
Fairtrade12 and Tony’s Chocolonely, these systems are by now being
adopted by a variety of actors, such as Ben & Jerry’s, Albert Heijn, Lidl
Belgium, Aldi, Rewe and Colruyt.

150

Effects of higher yield on net income Côte d’Ivoire (increasing kiloprice)

Higher prices

Though antitrust law provides barriers to discussing higher farm gate
prices, ways can be found to have conversations about higher farm gate
prices, both collectively and individually. In fact, there are some first steps
being taken to test significantly higher prices as part of living income
strategies.

75

50 75

150

200

50 75

150

200

50 75

150

200

labour days

The effects of higher prices on net income
When using the same parameters as used earlier on higher yields, priceincreases make a clear difference. At a farm gate price of US$3 per kilo,
average13 farm households could either earn a living income or comesignificantly closer to benchmarks, even in current production structures.
The only way to bridge the income gap is by paying higher prices. This
does not mean that this is the only intervention needed – as argued
elsewhere, there is a real role to play for Good Agricultural Practices,
especially to get the farmers from the current mean to the current
median, as well as diversification through agroforestry, land and tree
tenure security is needed, access to education and healthcare, improving
the infrastructure to reduce transport costs, gender equality, and otherenabling situations.
13 Once again, it is important to note that this is the average farmer.

– 80 %

Production increase and price developments

250%
Ecuador

200%

Côte d’Ivoire

150%

Ghana

100%

Indonesia

2403

0%forecast 21/22(estimate) 20/21

2478
19/20

2377
18/19

2414
17/18

2342
16/17

3451
15/16

3442
14/15

3399
13/14

2708
12/13

2796
11/12

3709
10/11

2069
05/06

1497
00/01

2464
95/96

2353

50%

90/91

ICCO daily price US$/tonne (2020/21 terms)

24

Due Diligence
The data is clear; without also ensuring higher farm gate prices, the living
income gap cannot be bridged. This raises serious questions about the4000
strategy of many projects to improve productivity or call for larger farmsizes. A due diligence approach requires companies to adapt strategies ifthey are proven not to work. It is obvious that the cocoa sector has to talk3500
about farm gate pricing, in order to bridge the living income gap.
Yield increases and overproduction
3000

One argument often used against raising prices is that it leads tooverproduction and deforestation. And though this is a possibility – higher
2500
prices can create an incentive for farmers to produce more – the volumesof cocoa produced in different countries show that cocoa price andincreased production do not always go hand in hand.
2000

1500

Cocoa prices were significantly higher during the period 2009/10-2011/12
and again 2013/14- 2015/16 than in recent years. In these years and thefollowing seasons, cocoa production in Côte d’Ivoire rose significantly,
while it stagnated in Ghana, significantly decreased in Indonesia, and grew
only slightly in Cameroon and Nigeria. In Peru and Ecuador, government
programs stipulated rising cocoa production. Though price can have aneffect on the amount of cocoa produced in a country, the political andeconomic situation in the country also play a key role and can therefore
also be put in motion to curb overproduction.
Furthermore, as it takes up to 5 years from planting a cocoa tree to thefirst good harvest, price fluctuations do not immediately translate toproduction levels. Most farmers know from their own experience thatprices fluctuate strongly, and they do not trust short phases of higher
prices, as they know that this could be very different when their crop is
finally ready to be harvested.
As the industry never tires to emphasise: the matter is complex, and priceis not the only driver in managing supply levels

Supply and demand

World market prices determine farm gate prices in all cocoa producing
countries. In Côte d’Ivoire and Ghana, this process is slightly moreindirect, as state run marketing boards CCC and COCOBOD set a pricefor a season. However, as this price is set based on the forward sales thatthe marketing boards can make, it is still completely a function of how
the terminal markets work. Though markets can work well to set proper
price levels when all actors have countervailing power, it does not workfor cocoa farmers. One of the key determinants for a farmer’s income istherefore imposed on them.
Hedging
All medium and big companies downstream in the cocoa and chocolate
supply chain use price hedging instruments extensively, to ensure they have astable supply of cocoa in the future, which they need to make their chocolate.
In contrast, except for the forward sales done by COCOBOD and CCC,
there are no measures in place to protect farmers against price fluctuations.

25

26

Options and futures
Futures are binding contracts. Options leave the option(s) open to
implement the option to buy or sell an asset or not to do so. An option
is more flexible in terms of time than a future because it is not tied to
the five annual settlement dates of the cocoa future trading system.
(…) Futures can be purchasing or sales contracts. A purchase contract
obliges the buyer to purchase a fixed quantity of a commodity at a
certain price at a certain point in time (stock exchange language: long).
A sales contract obliges to sell a certain quantity at a certain time at a
certain price (stock exchange language: short). The stock exchange
issues a corresponding sales contract for each purchase contract.
Towards the end of the term, both are usually closed off, i.e. there is no
physical delivery, but only the price difference between the contracts iscleared” (Hütz-Adams/Schneeweiss 2018).

Financial speculation influences priceIn theory, future prices follow the physical market, based on forecasts ofsupply and demand. However, the futures market influences price setting
as well. As opposed to the chocolate and cocoa companies that needto the cocoa for their final product, many investors and hedge funds see
cocoa trading exclusively as a way of profiting from price fluctuations.
They may, under certain circumstances, even significantly amplify thesefluctuations to increase profits. Moreover, because hedge funds often
have cocoa mixed in commodity investments, events that are completely
unrelated to cocoa can also have significant – if temporary – effects on
cocoa prices. For example, at the beginning of 2022, news about anincreasing number of Covid-19 cases in China led hedge funds to sell
investments in commodities, including cocoa.14 This led to a price drop
for cocoa. Although prices recovered within two or three weeks, the world
market price was at a level not based on physically available cocoa, but
on decisions of investment funds. This is problematic for Côte d’Ivoire andGhana, who presell most of their harvest in the first months of a year, long
before the harvesting season starts in October. A short dip in prices based
purely on speculation might cost them a lot of money.
Chocolate companies not dependent on cocoa price
Chocolate companies, unlike farmers, can react quickly to price increases,
for example by stimulating the consumption of products with less cocoa
content. It is striking that between 2012/13 and 2015/16 the grinding

14 Source: explanation of a sudden price decrease by a trader in a workshop in
spring 2022 under Chatham House rules.

figures on the global cocoa market remained nearly stable at roughly
4.1 million tonnes but increased immediately after prices collapsed in
the harvesting season 2016/17. After prices collapsed by more than 30%
grinding quickly rose by almost 25% to 5.1 million tonnes in 2021/22(forecast) (ICCO 2022). In all these years, the turnover of the chocolate
industry rose steadily. In order to be profitable, the chocolate industry
doesn’t seem to be very dependent on its most important ingredient.
Supply and demand don’t work for farmers
In response to the 2015 Cocoa Barometer, the Dutch government
commissioned a study (SEO 2017) on the role of market concentrationand price formation in the global cocoa sector. One of the key outcomesof this report was that supply and demand don’t work for cocoa farmers.15
Already in 1991, a former president of the European Commission argued(Mansholt 1991) that in agriculture, “the price mechanism does notcorrespond very well to the ideal-typical neoclassical market concept.”
This is even more the case for tree crops than in annual crops, as farmers
are even more tied to their production.

In that context, additionally, it is devastating for cocoa farming
communities that in the global increase of cost of living that is spreading
as this paper was written, all the costs of living and of producing cocoa aregoing up, but the price they receive for their cocoa at the stock exchange
is staying the same.
Decommodifying cocoa
It can no longer be enough to hide behind the argument that “this is how
the market works”. New systems new to be found, despite the market.
One such system could be that producer governments completely
decouple the cocoa price from the commodity exchange market, andfully set it themselves as a function of the costs of production, including
what is required to provide a living income. This would of course require
collaboration within all producer countries.

15 “The supply of cocoa is inelastic in the short run and […] cocoa is producedby millions of small farmers. As a result, individual farmers are price takers
with little or no bargaining power vis-à-vis local cocoa buyers. In addition,
most cocoa farmers have very few options for alternative income generating
activities. As a result, they will likely continue to produce cocoa at very low
prices.”27

Living Income Differential

28

In 2019, CCC and COCOBOD – the cocoa marketing boards of Côte
d’Ivoire and Ghana – decided to collaborate to raise the price for cocoa at
the world market. They first announced a price floor of $2,600 per tonne,
but after negotiations with the cocoa and chocolate industry decided
to introduce a Living Income Differential (LID) of $400 per ton. Manycompanies welcomed the decision publicly, albeit with caveats about how
it would be executed. However, the LID has become a topic of intense
debate, with the Ivorian and Ghanaian Cocoa Initiative (CIGHCI) – tasked
with making the LID reforms work – become increasingly combative
towards industry, and companies actively avoiding paying the differential
in a variety of ways.
Purchasing and sustainability disconnected
One way the LID is being undermined is when companies buy significant
amounts of cocoa from other origins. Though this is legal, it undermines
the effectiveness of the LID. For this to be tackled, a combination of supply
management at producing government level and changed purchasing
practices at company level is going to be necessary. The LID is a perfect
example of the disconnect between sustainability and procurement
practices.
Quality differential
Market power – as well as the availability of stockpiled cocoa – is also used
to avoid the differential completely. Sales of Ivorian and Ghanaian cocoa
were very low at the beginning of 2021, and again in 2022. However, as
CCC and COCOBOD need to forward sell their cocoa to fix a minimum
price at the beginning of the season16. Some companies waited until CCC
and COCOBOD were desperate, stepping in very late and offering to buylarge volumes of cocoa with the condition of a significant discount on the
country differential, which is another premium usually added to the stock
market price. When the LID was introduced, this country differential turned
negative. Income from cocoa was therefore not increased by US$ 400 per
tonne but by much less – if at all.
Lower minimum prices
Based on the introduction of the LID, farm gate prices went up for aseason. However, as a result of the above dynamics, Côte d’Ivoire had to

16 Ghana additionally uses the presales as security for a very large loan arrangement and foreign exchange from international banks, which comes with very
low interest rates due to the fact that presales of cocoa serve as a security
against a default of the bond.

lower its minimum price mid-season after introducing the LID. In Ghana,inflation combined with the depreciation of the national currency reduced
the government’s necessity to lower the price, although the Cocobod
claims it did subsidise minimum prices.
Economic pact and boycott
In June 2022, the CIGHCI and the cocoa industry agreed on a joint
Economic Pact, where industry committed to paying the LID and topositive quality differentials. In the summer of 2022, the CCC and
COCOBOD started publishing the paid quality differentials17, in the hopethat this would bring the quality differentials, so that the LID can increase
the farm gate prices. However, the Ivorian and Ghanaian governments
claimed that progress was not made, and as a result they boycotted theWorld Cocoa Foundation’s Partnership Meetings in October of 2022.
Transparency needed
What happens on the world market is one thing, how that affects farm
gate prices is another. One of the missing elements is the fact that there
is little transparency about the money involved; there is a large difference
between the $400 surcharge and the additional price the farmer receives,
especially given the current exchange rates. Much more transparency
from the producing governments is needed, and farmers and civil society
should be involved in setting the minimum prices.

Summary

Despite significant evidence that current approaches to raise farmer
income have marginal impact at best, most cocoa and chocolatecompanies continue to operate business as usual. Most sustainability
approaches see living income as an aspirational goal that will most
likely not be achieved. There is an unspoken assumption that farmersof commodities are expected by default to be poor, although many
companies report record profits.
GenderMany of the households that have been identified as ‘high risk’ forpoverty are headed by females. To tackle this, women need have thesame rights and opportunities as their male counterparts. Women do
not automatically benefit from higher incomes. Therefore, every single

17 The impact of this will not be seen for a while, as CCC/Cocobod have alreadyforward sold the cocoa for this season.

29

programme and intervention must have a gender-specific approach,ensuring rewards are distributed equally, and risks are shared justly.

30

Productivity, labour, farm size
Increasing productivity is necessary but insufficient to achieve a living
income. Often the resources to invest in higher productivity are notavailable or affordable. The labour needed to increase productivity isalso not available, and if it were this labour would not be affordable,
given that wage workers have to be paid a living wage. The added
costs of hired labour and inputs make it very hard to reach a higher net
income simply by growing more cocoa. The argument that farms might
be too small is also very hard to maintain when data is analysed; thelarger the farm, the more labour is necessary, while cocoa households
have a finite amount of labour available. Increasing productivity does
raise the risk for farmers, as investments are done up front. Issues ofcosts, availability of labour, and risk are also reasons why diversification
into other commodities does not prove a sufficient solution, although it
is an important strategy for resilience.
Price
Whereas raising productivity or increasing farm size both do notguarantee an increase in cocoa farmers’ net income, there is a leverthat does raise income quite quickly; paying a higher farm gate
price is inevitable if the living income gap is to be breached. Supply
and demand do not seem to work properly to remunerate farmers.
Interventions such as the Ivorian-Ghanaian Living Income Differential
are necessary first steps to ensure the farm gate price goes up.

31

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33

3. Environmental
protection

34

The environmental concerns in cocoa production are truly global inscope, ranging from Latin America, through Southeast Asia to West Africa.
Surprisingly, environmental concerns are relatively recent additions to theglobal sustainability discourse in cocoa, although issues such as changing
weather patterns, deforestation and the loss of natural ecosystems havebeen felt and challenged by communities in the Global South for many
years. Many of these issues are either rooted in, or exacerbated by, thepoverty of cocoa farming households.

Deforestation

Cocoa production is a driver of deforestation in all cocoa growing regionsof the world, but especially in West Africa. Ghana and Côte d’Ivoire haveparticularly alarming rates of deforestation. Over the past 30 years, Ghana
is estimated to have lost 65% of its forest cover, while Côte d’Ivoire has lostaround 90% of its forests. The majority of this dramatic tree cover loss has
been within cocoa-growing regions of both countries. The last remaining
national forests are under pressure, or already damaged, with cocoa as a
key driver of this destruction.
Deforestation is ongoing in Côte d’Ivoire and Ghana
Though the rate of deforestation in Côte d’Ivoire and Ghana slowed down
briefly in the late 2010s, it has been on the rise again over the past few
years. Research published by Mighty Earth in February 2022 (Mighty Earth2022) revealed that since January 2019, cocoa-growing regions of Côte
d’Ivoire and Ghana had lost nearly 60,000 hectares of tropical forest; anarea equivalent to the size of the city of Madrid. Recent data from the Ivory
Coast shows that 2.4 million hectares of forest – an area almost the size of
Rwanda and more than half of the size of the Netherlands – was replacedby cocoa plantations between 2000 and 2019 (Renier et al, 2022).
Furthermore, rainforests in Indonesia, the Amazon Basin, and the Congo
Basin are all under pressure from encroaching cocoa farms.
Impacts of deforestation
Deforestation has a range of negative impacts. The most obvious of theseis the loss of biodiversity and habitat, with extinction of many forms offlora and fauna as a direct result. The loss of forests also means a loss of
livelihoods for people who depend on forest resources for their food,
fuel, medicine and building materials. Through widespread deforestation,
humanity is also more exposed to potentially lethal pathogens. The threatof such zoonoses has become significantly more urgent in the public
perception in the past years.

Forests have a tremendous climatological contribution; acting as massive
carbon absorption and storage systems, forests play a key role inmitigating climate change. Forests contribute to soil and water quality andflood prevention. Deforestation disturbs local, regional, and global water
cycles, and this can result in less clouds, lower humidity, and modified
patterns of rainfall.
Voluntary initiatives
After significant public pressure from campaigning NGOs, including civilsociety organisations in producer countries, several voluntary initiatives
were set up to tackle deforestation in the cocoa sector.

Notable amongst these has been the Cocoa and Forests Initiative (CFI),
which brought together multinational cocoa and chocolate companies
and the governments of Ghana and Côte d’Ivoire to end cocoa-driven
deforestation. However, over five years since its launch, CFI has yet toachieve this objective, or even come close.
In Europe, several national cocoa platforms – ISCOs, or Initiatives on
Sustainable Cocoa – were set up, all with major commitments to halt
deforestation. However, these voluntary initiatives have all led to very little
progress on the ground in terms of slowing cocoa-driven deforestation.
Traceability and transparency
Fighting deforestation effectively in supply chains is impossible without
traceability and transparency. Traceability is needed for companies tounderstand where their cocoa is coming from, and whether these pointsof origin are within (or in close proximity to) areas of recent deforestation.
Transparency is key, because it allows actors to work together tomitigate the risk of deforestation in certain areas, as well as providing an
accountability mechanism by enabling civil society and other actors toengage with private and public sector actors that are failing to address
deforestation in cocoa supply chains.

The upcoming European Commission’s “Deforestation Regulation” will
require traceability of commodities entering EU markets back to field plotlevel. This regulatory development should create the necessary pressure
for companies and producing governments to make progress after many
years of promises. National monitoring and traceability systems are almost
ready to be launched in both Ghana and Côte d’Ivoire, and cocoa andchocolate companies have recently announced plans to collaborate andshare data into these systems. Despite all these good intentions, more35

than half of the world’s cocoa is still not traceable at all, and most cocoathat is traceable is only traceable to the cooperative level, not to farms orplots.

36

Traceability should not be confined to just the farms but should include
mapping of remaining forests outside of existing farms. This is necessary
to be able to monitor and report on deforestation-free cocoa, as wellas providing the necessary data to be able to remunerate farmers forenvironmental services provided keeping forests or restoring degraded
forests through agroforestry.
Along with traceability, there is an urgent need for much greatercocoa supply chain data transparency. At the October 2022 World
Cocoa Foundation Partnership meetings, the CFI announced it wasundertaking a major cocoa traceability initiative with 18 large cocoa
and chocolate companies, along with the World Resources Institute, togather geolocation data on hundreds of thousands of cocoa farms in thecompanies’ West African supply chains. But as yet, there is no hint that thisdata will be made publicly available. Ongoing reluctance by both industry
and government actors to make this kind of data publicly available stifles
potential efforts at multistakeholder actions that could target deforestation
hotspots, and ultimately slows progress in combatting the wider problem.
Legal vs. illegal deforestation
In many origin countries, a differentiation is made between legal andillegal deforestation. However, there is little point in emphasising illegal
deforestation in cocoa in Ghana and Côte d’Ivoire; most parks andprotected areas have already been destroyed in whole or in large part. The
key is to stop all deforestation for cocoa (and other products) everywhere,
legal or illegal, and to regreen all cocoa wherever it is, moving away frommonoculture toward diverse agroforestry.
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 deforested areas to berestored in their environmental functions and for rainforests to regenerateover time. In those parts that will continue to be used as (cocoa) farmland,
diverse agroforestry systems should become the norm.
Smallholders
In the context of zero-deforestation and traceability, the interests offarmers need to be considered when designing these traceability
systems. Smallholders need to be supported to comply with deforestation

measures, and they should be compensated for any costs incurred. This
could be done by companies offering premiums for cocoa grown throughagroforestry and other sustainable production systems that keep forest
landscapes intact, or even for restoring degraded woodlands. All cocoa
farmers will need to earn a living income in order to alleviate pressure on
forests from cocoa production.
Forest protection and human rights
Forest protection must be done in a way that upholds and respects humanrights, and it is necessary to involve farming households in protection
and restoration efforts in their area. Where this is not possible, farming
households should be helped to find alternative sustainable livelihoods.
What should be avoided are violent evictions of farmers, as has been
witnessed several times in the past years. Communities that are currently inprotected areas must be relocated by providing realistic alternatives, andexisting cocoa farmers must be allowed to earn a decent livelihood fromtheir farms without feeling the need to expand into protected forested
lands to earn more income. Reciprocally, protected areas are a necessary
tool to conserve endangered biodiversity, and should be accepted andrespected by communities.
Landscapes and cross-commodity
It is important to note that stopping deforestation requires actions atmany more levels than just at the cocoa farm. Landscape approaches
are necessary, bringing in all relevant actors in the communities. Theselandscape approaches (usually named forest & landscape restoration) are
not much used in cocoa landscape, although there is a great potential
for their use. Such approaches should not be limited to cocoa but
should cover the various land-uses in the landscape and address theneeds of multiple groups, rather than being set-up in line with the zerodeforestation commitments of the international cocoa sector.

Agroforestry18

Cocoa agroforestry systems can bring a wide range of ecological benefits,
such as 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.

18 A deeper dive on agroforestry can be found in the 2020 Cocoa Barometer
Consultation Paper on Agroforestry, released in June 2020.

37

38

Agroforestry can also be part of the solution for some of thesocioeconomic challenges. Yields can be just as high in high biodiversity
agroforestry systems as in full-sun production (Clough et al. 2011), andthere are indications that cocoa agroforestry systems can have similar oreven better economic performance compared to conventional, full sun
systems (Jezeer et al. 2017). Cocoa agroforestry systems can and should
provide additional income opportunities to farmers, and to serve as
incentive for farmers to invest and maintain agroforestry systems in cocoa
producing origins.
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 the trade-offs between agrochemical use andagroforestry systems. Furthermore, cocoa varieties should be favouredthat thrive under diversified shade conditions, and that do not need highlevels of external inputs such as fertilizers and pesticides.

Agroforestry; data from the questionnaire
Though most companies claim to be active on this topic, comparing
activity on agroforestry is proving troublesome. Most have included
agroforestry in farmer training manuals. Many distribute tree
seedlings of different varieties to farming communities. Some claim
to buy a lot of cocoa from agroforestry systems. However, there isno common definition of agroforestry. As such, the data provided bycompanies remains largely unusable in making comparisons.

Zero-deforestation is not the same as cocoa agroforestry
There is no direct relationship between promotion of agroforestry
and halting deforestation. Agroforestry cannot replace natural forest.
However, agroforestry cocoa can play a (minor) part in compensation andrestoration measures for previous historic deforestation. In this sense, it isimportant for companies in the cocoa industry, who have benefitted frompast deforestation in their supply chains. Agroforestry is also important for
major cocoa producing countries, as they urgently need to re-green theirnations, some of which are on a collision course to desertification becauseof tree cover loss. For such countries, rolling out agroforestry wherever
possible can help anchor rainfall and restore some tree cover.

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 diverse agroforestry systems put in place.
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 definition19. Where
there is alignment, this is often at a lowest common denominator level.
Furthermore, there is a lack of enforcement at all levels (within CFI,in certification labels, in government agroforestry and deforestation
standards). Most efforts also remain uncoordinated, with little synergy
between companies and the landscapes they operate, resulting in minimallandscape transformation and agroforestry improvements. Crucially,agroforestry programmes are often presented as “oven ready” packages
for farmers to take or leave, rather than designing “farmer-centric”
approaches that involve farmers in the basic design of these programmes
from the outset.
Low tree survival
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 workat farm level, such as sharecroppers (Uribe-Leitz/Ruf 2019). This clearlyshows the need for intensive training, education, and collaborative workwith cocoa farmers and farm workers to ensure success in any transition
away from monoculture towards agroforestry.

19 Because of this confusion of definitions, the European ISCOs have attempted
to assign definitions to different categories of agroforestry. This makes it clearthat there are considerable differences in terms of quality. The aim should bethat members of the ISCOs source cocoa from at least category 4 in their supply chains. The definitions can be found here.

39

40

Low adoption rates
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.

Climate change

Changing weather patterns due to climate change are a daily reality inmany cocoa producing regions. Its impact can differ wildly dependingon locality; unpredictable weather patterns and extreme weather events
including extended droughts or severely increased rainfall have a direct
impact on the overall health of the trees, disease incidence, and the ability
to set flowers and produce fruit. We are in the middle of a climate crisis.
Areas become unsuitable for cocoa production
Large parts of the West African growing regions will gradually become
unsuitable for growing today’s cocoa varieties by 2050 if no adaptation
measures are taken (Schroth et al. 2016). The Americas are also alreadyaffected by climate change, making some regions less suitable for cocoa
production – but also making other areas that were previously unsuitablefor cocoa production much more interesting for this crop. Weather
phenomena such as La Niña and El Niño20 lead to droughts and/or shortterm heavy rainfall, depending on their characteristics and course. Though
La Niña and El Niño are naturally occurring phenomena, and are not man
made, they are becoming more frequent and also more severe (de Sousa
et al. 2019).

There is a particular irony in the fact that deforestation caused by cocoa
will over time contribute to an environment that means cocoa can nolonger be grown in the exact areas that were deforested for the crop in thefirst place.

20 El Niño and La Niña are naturally occurring weather events of warmer (ElNiño) and colder periods (La Niña) around the Pacific Ocean that affect global
temperatures and rainfall patterns, and as such have effect on cocoa production globally.

New varieties of cocoa trees
To counteract this, either new cocoa varieties would need to be bred or
impacts of weather phenomena and climate change would need to beat least partially mitigated through modified farming practices, such asagroforestry systems.

Work is being done to modify cocoa tree varieties to be more resistantto droughts and extreme temperatures, and climate smart agricultural
practices, such as soil and water management, might support theadaptation of cocoa farms to the challenges caused by climate change.
Most importantly, diverse agroforestry systems are expected to be one of
the most effective adaptation systems available, because they make farms
more resilient to impacts or extreme weather events and diversification ofcrops makes the household more resilient to market shocks.
For these efforts to become mainstream, infrastructure and investment
capital are needed to support and incentivize farmers to transition toclimate-smart agriculture, including diverse cocoa agroforestry.

Carbon removal and capture

Companies are increasingly incorporating climate targets andcommitments in their sustainability agenda. As a result, and following
many other sectors, carbon (removal) programmes are being developedin cocoa – usually linked to agroforestry – to achieve targets and/or tocompensate emissions.
Valorising the carbon captured in cocoa trees – and therefore paying thefarmers more for their environmental services – could lead to additional
income streams for farmers and thereby incentivise farmers to make their
farmer more climate resilient through agroforestry and other interventions.
However, there are also concerns about carbon capture programmes.
General challenges
Some of the key issues are not cocoa specific. An over-reliance on offsets
distracts companies from urgent and direct emissions reductions, hence
slowing down reduction of overall global emissions. Although somecarbon credit projects are third-party certified, this does not always turnout to be adequate, and can result in human rights abuses, food insecurity,
land grabs and community disenfranchisement.

41

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At the same time, because climate action globally has been lacking forseveral decades, the latest IPCC reports have indicated that all SDGaligned pathways to 1.5 degrees must now include carbon removals. In
these pathways, removing carbon from the atmosphere must come on topof steep reductions of greenhouse gases; and only a small amount can beused to compensate for hard to abate emission reductions.
Those corporations that seek to go the extra mile and only want to invest
in best-practice carbon offset approaches, have struggled to identify
carbon removal projects with proven strong social credentials eventhough climate standards for carbon credits on the whole seem to receive
greater scrutiny, and hence are (slowly) improving.
The need is great for guidance for ‘what good looks like’ for carbon
removal projects with respect to human rights due diligence, land rights
and control, income and benefits sharing, gender, grievance mechanisms,
workers’ wages and rights, meaningful participation, and food first
approaches. Other key issues include:
Double counting/claiming
There is a risk of double counting, where companies can count the
carbon captured in their programme, but the same tonnages can also be
included in government climate commitments. This is not only a risk withinpublic (Nationally Determined Contributions) and private commitments(Voluntary carbon market and scope 3 accounting), but also within supply
chains where for instance two companies are buying oranges and coffee
from the same producers and both claim benefits.
Permanence
Cocoa agroforests store far less carbon than the tropical forests they havehistorically replaced, and though cocoa agroforests can store more carbon
than monocultures, there are concerns about the permanence of carbon
sequestration through cocoa agroforestry, especially because farmers may
not always be able or willing to maintain the cocoa agroforestry systemin the long term. Furthermore, there is a limited lifespan for cocoa trees,
meaning that carbon captured in a cocoa tree in 2022 will be released in
30 years or so at the end of its lifespan. Though replanting can over timecompensate carbon losses, this still could lead to negative effects, either
temporary or permanently. With increasing climate instability, wildfires
or droughts could also inadvertently release large amounts of captured
carbon into the atmosphere., Although there are mechanisms in place toaccount for this risk21, increasing consequences of climate change in West
Africa create serious risks for the permanence of captured forest carbon.
Additionality
Emission reductions/removals need to be additional, meaning that thecapture only counts for future capture, not for existing systems. Thismeans that farmers who are already working in agroforestry systems,
will be excluded from company programmes that aim to meet theadditionality requirement for carbon credits. This is the so-called paradoxof additionality: farmers who currently grow cocoa in monoculture will
be rewarded the most, whereas farmers who are already in diverse
agroforestry systems will be excluded.
Deforestation and removal
Restoration of deforested areas and degraded forests within landscapes
where cocoa is produced is another important measure for increasing
the carbon capture and storage, as well as other ecosystem services, inthese landscapes. Since the global cocoa sector has benefited from past
deforestation, it is a joint responsibility to remediate these past damages
and support the restoration of landscapes in cocoa producing countries.

Carbon insetting and offsetting
In the case of companies wishing to reduce or remove emissions
in their own supply chain (or for those of their customers) further
downstream in the supply chain, this process is called carbon insetting.
If companies want to compensate emissions outside of their own
supply chain/footprint through certified carbon credits, this is calledcarbon offsetting.

Fair farmer value and farmer risk
It is not always clear if the farmers actually receive payments for the
carbon capture activities on-farm, nor how much they receive. In thecase of carbon insetting companies might not actually pay for credits
but just implement their agroforestry programmes and use carbon
capture as a way to justify these investments internally. Additionally, there
could be unintended consequences of farmers being bound to specificintermediaries if ‘selling’ their carbon units. It is crucial to prevent that

21 Such as buffer pools of credits that can be cancelled out in case of a fire, andthe principle of ex-post selling of credits instead of ex-ante to ensure that the
reduction/removal actually took place,

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carbon becomes another commodity for which the farmer is not paidenough, especially if it requires extra investment/labour or limits theirfreedom to decide on farming practices. Payments for ecosystem services(including carbon capture) should always be additional; a bonus for asystem from which the farmer is already benefiting, not an aim in itself, andcompanies must be transparent about the benefits the farmers receive.
At a minimum, it is important to ensure carbon offset projects are notdecreasing farmer net income (e.g. a minimum price for the credits
ensuring producers can be sure the costs of their removal projects will
be covered), and that producers see increases in net income as a resultof investments. Carbon removal projects should be intentional about
contributing to living income for farmers and farm workers, and benefits
to farmers and farm workers should be enshrined in the contract. Front
running cocoa companies should look at finance for carbon removal
projects as part of an overall living income strategy. This means investingin capacity of producers and their communities to calculate and manage
their carbon removals, for use as credits or other financial mechanisms, aswell as empowering communities to understand and engage in finance forcarbon removals.
Removal and reduction
It is important to remember is that there is no room left in our global
carbon budget to choose between reducing emissions and increasing
carbon capture in cocoa agroforests and landscapes on land. Both needto happen urgently. As such, carbon removal programmes should not
replace emission reduction efforts.

Simply put, we shouldn’t invest in cocoa agroforestry so that we can keep
driving cars and flying airplanes, or deforesting elsewhere. The mitigation
hierarchy states that the first step is to avoid and reduce own emissions,which cannot be replaced by purchasing carbon credits.
Specifically, companies seeking to purchase offsets should disclose
absolute emissions with disaggregation of scope 1-3 emissions andcarbon removals, and climate risks, and types of impacts of carbon
removal investments. Companies should have set and made progressagainst a credible, Science Based Target to a 1.5 trajectory.
Key questions going forward
Most items discussed in this chapter are questions, due to the relative
newness of this topic in the cocoa sector. Furthermore, carbon
capture systems, despite being around for several decades, are stilla largely unregulated sector. Where certification schemes place a lotof requirements for robustness, this makes compliance complicated,
expensive, and therefore often not benefitting famers.
Further critical conversation, data, and study is required to address key
questions. What will actually change for farmers and cocoa landscapes?
Does the increased attention for carbon capture in cocoa actually lead to(long term) capture of emitted carbon? Will it bring extra money to thefarmer? Will the farmer bear the risks? What is expected in return?
It is crucial that these concerns are addressed. Carbon should not becounted more than once, and certification and verification schemes
should be robust and credible, without leading to extensive monitoring
and compliance costs for farmers. If carbon capture programmes aredeveloped, this should be done in a way that the farmer benefits and does
not bear the risks. Finally, carbon capture programmes should never beused as a substitute for reducing emissions: if companies wish to support
carbon capture, they should not claim that this cancels out their emissions,but they must pursue carbon capture as a separate target and continue toreport on and reduce their emissions as a stand-alone item.

Agrochemicals

The widespread promotion of agrochemicals is one of many examplesof the cocoa sector’s attempts to find quick-fix solutions to larger
and systemic challenges, such as declining soil fertility from intensive
monoculture cocoa production. However, there are many environmental
and health risks. And though there can be short-term benefits in the use ofagrochemicals, there are serious questions around the business model for
farmers.
Projects to support farmers should no longer blindly look to increase theuse of agrochemicals. Good agricultural practices (GAP), integrated pest
management (IPM), regenerative agricultural practices, the use (and where
possible their production on farm level) of organic fertiliser, and especiallythe implementation of diverse agroforestry are approaches that should be
looked at instead.22

22 For details see Cocoa Barometer 2020

45

Inorganic fertilisers

46

Inorganic fertiliser use is part of the “solution packages” offered by many
companies to farmers and farm organisations. For two decades, a key
component of any company approach has been that farmers should use
more chemical fertiliser to increase productivity. Due to a combination offactors23, prices for these products have risen drastically in 2022. But even
before this price increase, many farmers could not afford them leading tosituations where the government had to provide them to cocoa farmers at
subsidized prices.
No net income increase
Though the use of fertilisers can lead to significantly higher yields, thebusiness case for farmers is unclear. With increased use of agrochemicals,
farmers’ input costs increase, while risks are high, and remuneration is very
uncertain. A recent IDH study shows that there are many economic risks
to farmers in using fertilisers and pesticides. To access agrochemicals,
farmers often go into debt. However, many of these farming families
afterwards had a lower net income than before. The positive effect of
the use of fertilisers on income is currently questionable (IDH 2021: 10,
14, 83).24 Similar stories could be heard in the sector for years, although
they were not put into official reports. After the cocoa price crash of
2016/17 some companies advised farmers to reduce fertiliser input as theincreased yields would not cover the increased costs.
Increased financial risk
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 a decent price for the cocoa come harvest
time. Where multinationals and producer governments have the ability
to hedge future sales on the future markets, farmers are price takers. The
high price volatility might lead to a situation where farmers who invested
in fertilisers lose money. (Ruf/Kiendré2012, p. 7; Snoeck et al. 2016,
pp. 29–30; Ruf 2016, p. 15).

23 Including the effects of both the Covid-19 pandemic and the Russian invasionof Ukraine.
24 As we argue elsewhere in this Barometer, this is not to say that farmers should
not invest in Good Agricultural Practices, but that these investments only
make sense if an enabling environment of Good Governance and Good Purchasing is in place. The first to act here are governments and industry, not thefarmers.

Highly hazardous pesticides

A wide variety of pesticides are used to control pests and diseases incocoa. Highly disputed and hazardous insecticides are used to reduce
crop loss (Pesticide Action Network (PAN) UK, 2018; Bateman 2015,
p. 8 and p. 39). The HHP’s used most widely in the West African cocoa
sector have been banned in the EU because of their danger to humanhealth and the environment, and Ghana and Côte d’Ivoire are among themain importers of neonicotinoids banned in the EU25. The use of thesepesticides warrants close attention, for the protection of both farmers andchocolate consumers, as well as for its environmental effects.
Exposure of children to pesticides
The rising trend of children being exposed to pesticides is a cause
for grave concern. The 2020 NORC report indicated that the numberof children exposed to pesticides had almost quintupled between
2010 and 2020. 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.
Farmer health and safety
Overuse and misuse of pesticides is widespread. Often, farmers are soldunlicensed, fake, or adulterate d products by unscrupulous resellers(PAN UK 2018, p. 1). Farmer poverty is a major driver of this, as is a lackof literacy and training, putting the health of farmers at risk (Osei-Owusu/
Owusu-Achiaw 2022).

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 the correct 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 allcommon 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).

25 See this recent report by Public Eye, and this one by INKOTA Netzwerk

47

Several things are necessary to tackle these challenges. Farmer income
needs to be raised, so that farmers can afford protective equipment.
Education on the right dosage application of pesticides and use ofprotective equipment needs to be intensified to prevent adverse impacts
on human health.
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Environmental harm
Pesticides can cause a wide range of harm to natural ecosystems andcan severely threaten local biodiversity. Populations of birds and fish
can be strongly affected. Pesticides, and especially Neonicotinoids, areharmful to a variety of pollinators, including bees. Though the impactof pesticides on midge flies are much less researched there are serious
indications that insecticides reduce their populations as well, whichmight lead to a reduction in cocoa yields, as midges play an importantrole in the pollination process in West Africa (PAN UK 2018, pp. 3–4).
The natural fermentation of cocoa is also entirely dependent on thriving
insect populations. The adverse impact of pesticides on the health of theenvironment calls for an alternative approach to pest management
Integrated Pest Management (IPM)
The above points do not take away from the need to protect crops frompests and diseases. In many areas in West Africa, viral crop diseases suchas the cocoa swollen shoot virus (CSSV) and fungal diseases such as black
pod lead to a loss of 30% or more of the annual harvest. The Witches
Broom virus devastated the Brazilian cocoa sector in the 1990s andcontinues to damage part of the cocoa production in Latin America. Pest
infestations, ranging from insects, such as the Cocoa Pod Borer in SouthEast Asia, through to rats, mice, squirrels, slugs, and snails damage thecocoa tree and its fruits, leading to harvest losses (Bateman 2015, p. 28).

However, this does not automatically mean that extensive pesticide use isnecessary, or even warranted. Integrated Pest Management – especially in
combination with diverse agroforestry systems – could reduce the needfor pesticides significantly. IPM systems are complex, and for them to be
implemented successfully, farmers will need financial support and training(Bateman 2015, p. 20; PAN UK 2018, pp. 5–7).

Gold mining

Driven by poverty
Artisanal and small-scale gold mining (ASM) – known in Ghana as
Galamsey – has become a major problem in cocoa growing areas in
Ghana and increasingly in Côte d’Ivoire. Rising gold prices and thestruggle to earn a living from agriculture have led to explosive growthin the artisanal and small-scale mining sector in the Global South. It isestimated that up to 2% of cocoa farm land has been lost to Galamsey in
Ghana since 2013(Chandrasekhar/Adogla-Bessa 2022). Farmer poverty
and the current cost of living crisis are expected to further drive cocoa
farmers to lease or sell their land to ASM gold operators.
Environmental damage
The use of mercury to extract the gold is causing severe environmental
damage; the poisoned wastewater is not suitable 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 theirland for mining, in exchange for cash compensation, leading to a further
loss of land for cocoa farming. Côte d’Ivoire is increasingly confronted
with these issues as well. Not only is the number of small-scale miners
rising there too, but also some of the rivers coming from Ghana bring theirpollution into the neighbouring country. Besides the pollution of soil andwater, ASM also destroys the forests and cocoa trees that are on the land
when the mining begins, leading to a loss of biodiversity, and also further
contributing to changing weather patterns.

Summary

Environmental concerns are relatively recent additions to the global
sustainability discourse in cocoa, although they have been felt andchallenged by communities in the Global South for many years.
Deforestation
Though the rate of deforestation in Côte d’Ivoire and Ghana slowed
down briefly in the late 2010’s, they have been on the rise again.
Furthermore, rainforests in Indonesia, the Amazon Basin, and theCongo Basin are all under pressure from encroaching cocoa farms.
Deforestation causes loss of biodiversity, quickens climate change,
and reduces carbon capture. Key tools to tackle deforestation are
traceability and regulation. Care must be taken to ensure that measures
to combat deforestation do not violate human rights, and also takesmallholders into consideration.
Climate change
Climate change is a second major environmental challenge, whichis already changing the parts of the world that are suitable for cocoa

49production. Combined with the result of West Africa’s deforestation,
rainfall patterns have already been significantly altered there. New
varieties and agroforestry are key parts of the mitigation and adaptationneeded, as is reforestation.

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Agrochemicals
Increasingly, agrochemicals are being used in the cocoa sector, bothHighly Hazardous Pesticides as well as inorganic fertilisers. The use ofagrochemicals is pushed heavily by industry to increase productivity,
however so far often with no net income increase. Farmers run a riskof not being able to recover their investments, however. Furthermore,
health risks through exposure are high, especially to women andchildren. The environmental harm is significant as well.
Agroforestry
Agroforestry is an important part of any sustainable cocoa
production landscape, providing socioeconomic resilience as wellas environmental benefits, although agroforestry should not beseen as a replacement of existing forests, or even as a tool to reduce
deforestation. Low adoption and tree survival rates as well as a lackof common definitions currently impede the deployment of diverse
agroforestry systems at scale.
Solutions
Diverse agroforestry systems, organic farming, Integrated Pest
Management (IPM), landscape approaches on joint monitoring
and transparent data sharing on deforestation hotspots, as well as
regulation in both producing and consuming countries are part of atapestry of approaches needed to start tackling the environmental
challenges in cocoa. As with other issues in the cocoa sector, ensuring
a living income for cocoa farmers would also go a long way towards
relieving the pressure on forests, wildlife, water, and soils.

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4. Human rights

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Although the focus on human rights violations in the cocoa sector is often
on child labour, there is a wide range of problems facing cocoa-producing
communities. Gender inequality, (infant) malnutrition, lack of accessto education, human trafficking, insufficient health care facilities andsanitation, insecurity of land and tree tenure and rule of law, labour rights
violations for smallholders, workers, and tenants; the list is long and by nomeans comprehensive.
Though every issue requires specific approaches, at the root of all thesehuman rights issues is the structural poverty of rural communities. As living
income is a human right, any human rights approach to the challenges in
the cocoa sector should include strategies to address poverty and to close
the living income gap.
Producing nations are making progress in addressing key challenges,
notably in access to education, health care, electrification and drinking
water in rural areas. Efforts are also being undertaken to strengthen
producer price, roll out of social security systems, and the establishmentof the interprofessional organisation to defend the rights and interests ofproducers.

Cost of living crisis

The Covid-19 pandemic has had a tremendous impact on cocoa
producing countries. Prices for many daily products increased significantly,
and lockdowns caused major reductions in income. Due to school closuresin West Africa, child labour rates also went up. The Russian invasion of
Ukraine has intensified the already high inflation rates in cocoa producing
countries.
Prices for staples such as food, transportation, as well as for agricultural
inputs have rising dramatically, especially since the beginning of 2022.
The fact that the cocoa price has not gone up in a similar way poses atremendous hardship for cocoa growing households throughout theworld.

Child labour
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

15-17 years:
43+ hrs/weekorHazardous labour
Based on national
definitions

Definitions of child labour
Not every child helping their parents on a cocoa farm is immediately
involved in child labour, and not every task on a cocoa farm isimmediately a cause for concern. There are, in short, three gradationsof children working on farms.
• Child/light work can be summarised as a child that sometimes
helps out on a farm for a limited time doing work that is appropriate
for their age, and that does not interfere with their schooling or their
possibility to be a child. Light work 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 wellbeingof the child. It also refers to labour for children under the specificage 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 exception of the United States of America.
• The Worst Forms of Child Labour (WFCL) are defined under ILO’s
Core Convention 182, which is ratified by every country on earth.
They can be split into conditional and unconditional Worst Forms.
• Unconditional WFCL, such as trafficking, slavery, and forced labour(as well as several other categories not applicable to cocoa) aredefined at a global level under ILO’s Core Convention 182, which is
ratified by every country on earth• Hazardous child labour is also called Conditional WFCL. They arecalled conditional because the conditions of hazardous activities aredefined at a national level through consultative tripartite processes.

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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 acrosscommodities and across the globe. Careful definitions are crucial todifferentiate between permissible child/light work and forbidden childlabour, and to ensure that helping out at the farm as well as youth
apprenticeships are not confused with child labour. In that light, thegovernments of both Ghana and Côte d’Ivoire have set up national
definitions of hazardous child labour. Hazardous activities include land
clearing, carrying heavy loads, exposure to agrochemicals, use of sharp
tools, working with dangerous machinery, and working long hours.

Approximately 1.5 million children are working in cocoa production in
Côte d’Ivoire and Ghana (NORC 2020). Of these, 95% are exposed tothe (conditional) worst forms of child labour – because they are involved
in hazardous activities as defined by national laws, such as working withdangerous tools or harmful pesticides. The vast majority of child labourers
are exposed to more than one type of hazardous work.26
Clear communication
An important role for national governments, as well as various
stakeholders involved in the cocoa sector, is to ensure clear and consistentcommunication and public awareness around key issues. Whereas forseveral years progress was being made in acknowledging the challenges,
the past years some government agencies have started to downplay theissue of child labour, often conflating child work with the hazardous childlabour. Assertions that most children would be merely helping on the farm
after school do not correspond with the reality, which is that the children
are in child labour because of the activities they are involved in.
Government action
There is an important role for national governments with the support ofdevelopment agencies in combatting child labour, especially around
access to education, social protection, awareness raising, and rule oflaw. Governments in Ghana and Côte d’Ivoire have run sensitization andawareness raising campaigns throughout their countries for the better
part of the last decade, and national child labour monitoring systems
have been in place for many years. Part of their challenge here is low
coverage and weak implementation, but also that there is not muchlinkage with the necessary referral systems. Both Ghana and Côte d’Ivoire
have developed and implemented an extensive legal framework, as

26 See https://www.cocoainitiative.org/sites/default/files/resources/ICI_Technical_Summary_2018-19_NORC_survey.pdf

well as a range of relevant legal implementation initiatives. Beyond law
enforcement, support mechanisms are necessary, as are national policies
and programmes around quality education, social protection, and accessto services and infrastructure.
Enforcement
Care must be taken when enforcing child labour legislation. In the case of(hazardous) child labour on family farms, the best recourse is often aiding
cocoa farming households in taking away the reasons why children are
working in the first place.

This could be through providing resources so that children can attend
quality education, helping the family to access essential services,
social protection and income generation activities, or a variety of otherinterventions. Awareness raising and community development are alsoa part of the necessary interventions there. In the case of unconditional
worst forms of child labour, however, relevant authorities should consider
stronger interventions, as forced child labour and trafficking are criminal
offences.
Audits and zero-tolerance vs monitoring and root causes
Random audits and adopting a zero-tolerance policy for any forms ofchild labour seem to have a counter-productive effect, making childlabour even more hidden but no less prevalent. It is now a shared beliefof the sector that what is necessary is structural monitoring – through e.g.
a credible CLMRS – coupled with tackling systemic root causes – such as
farmer poverty, absence of (access to) quality education, inadequate local
infrastructure and services, inadequate labour services in cocoa growing
communities, and lack of awareness – through broad community-based
development projects.
Access to quality education
Where schools are absent, children are more likely to work on the farms.27
Primary school attendance has increased in both Côte d’Ivoire andGhana28, although the quality of education still needs to be significantly
improved. For both major West African cocoa producing countries,
secondary education is a larger challenge, further exacerbating the issueof child labour, as children under the age of fifteen or sixteen – depending

27 See https://www.cocoainitiative.org/knowledge-hub/resources/educationquality-and-child-labour-review-evidence-cocoa-growing
28 In the case of Ghana, primary education is almost universal and has been foryears.

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on the country – should go to school and cannot work full-time. In
Ghana, secondary education on paper is free and universal, however
the education system cannot cope with the numbers, and coveragethroughout the country is far from complete. In Côte d’Ivoire, coverage
is much less universal. There is also a strong gender imbalance in school
attendance, which becomes more marked at higher ages. Often, older
girls are kept at home to help with various household tasks.29
Regional and landscape approaches
In complement to companies’ efforts to identify and monitor risks andimpacts, landscape approaches are a way to implement prevention
and remediation measures - pulling all actors together within a given
geography. It is important to not only tackle child labour (and forced
labour and child trafficking) at farm level or just within the cocoa growing
communities, but to also understand the broader landscape and regional
context in which these problems take place. Merely putting the focus
on child labour in cocoa could result over time in a displacement of thechild labour from cocoa to other less scrutinised sectors, such as fisheries
for the local market. Integrated area-based approach such as the Child
Labour Free Zone mechanism in Ghana are examples of how this could
work. Furthermore, when there are cases forced labour or trafficking –child labour or not – it is also essential to bring in the governments of thesource countries of these migrant labourers, such as Burkina Faso andMali.

Child Labour; data from the questionnaire
When asked about their activities on child labour, there is atremendous variety in answers provided by the chocolate and cocoa
companies.

Though every company in the questionnaire has programmes toreduce child labour, what these programmes do differs considerably.
Furthermore, figures are often not comparable, and data varies
tremendously.
One reason for these major variations might be that systems todetect child labour can vary strongly in how well they work to reducechild labour. Another reason can be different methodologies ofcounting children, and the depth of analysis.

29 This is also because secondary schools are often far away which generates
safety concerns

Children detected labouring not in the cocoa plantation but onother fields of the family might be counted in one project and notin another one; children walking unaccompanied by adults to theplantation again might be counted or not.
Not every programme, it seems, is as efficient in tackling childlabour. An agreed-on methodology on how to detect child labour,count the children and remediate harm does not exist (see the box
on CLMRS).
Even just going by the numbers reported in the questionnaire forthis publication, child labour is still widespread; most of the farms
in cocoa growing areas are still not covered by child labouring
monitoring systems. Even then, nearly 65,000 children were reported
in child labour in the questionnaire. Considering the fact that there
are approximately 1.56 million children in child labour in the cocoa
sector in Cote d’Ivoire and Ghana, it is clear that current industry
interventions are nowhere near enough to significantly reduce thesehuman rights violations.

ProgressThough there are more children in hazardous child labour in cocoa than ten
and twenty years ago, the severity of these cases seems to be decreasing.
On average, children are involved in fewer kinds of hazardous activities,
and the number of hours they are working on the farms is also reducing.
However, due to the strong increase of numbers of households involved incocoa production, the absolute number of children involved in hazardous
child labour is still growing.
Increased ambition is needed
Industry, producing governments, and international organisations tried tocome to new joint ambitions to combat child labour for several years. Due
to much internal division between various actors this so-called Children
First in Cocoa initiative never materialised. Investments and ambitions
must be increased by several magnitudes30 if targets on child labour
are ever going to be more than greenwashing and empty words. The
upcoming due diligence regulations should provide cause to increase

30 In September 2020, the International Cocoa Initiative’s director called for a‘massive expansion’ of collaboration and investments to tackle child labour.
(Confectionery Production 2020).

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ambitions; promises must be enforced with real consequences in the caseof a failure to meet them.

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Community based prevention vs supply chain based remediation
The 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
and remediation are needed. Moving away from a supply chain based
approach poses a real risk that it companies become less accountable forthe child labour in their supply chain. Both community development andsupply chain responsibility are needed. They are not mutually exclusive.
Move away from transparency
When the last Barometer was published, there was a trend of more andmore companies reporting on the numbers of cases in hazardous childlabour. This increased transparency was a necessary improvement andwelcomed in previous Cocoa Barometers. However, this trend is reversing;increasingly companies refuse to publish numbers on child labour. This
trend is deeply concerning; what is needed is more transparency andaccountability, not less.

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 income
generating 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.
Best practice
Impact analysis shows that these systems – when done properly – identify
around 60% of the children in a community involved in child labour. Abouthalf of the identified children are no longer in child labour within three
years. Though these numbers are encouraging and show a higher successrate than any other child labour intervention, even this best practice can only
stop around 30% of child labourers from engaging in hazardous activities.

Dilution of impact
These systems were first developed for cocoa by the International Cocoa
Initiative (ICI) on behalf of Nestlé. At first, other companies started
rolling out similar CLMRSs, some through the ICI, others through theirown projects. To reduce the costs31 associated with implementing acomprehensive CLMRS, alternatives have been developed. Though
the argument is that this makes the interventions more easily scalable,
there is a growing risk that different monitoring systems using different
methodologies could have radically less impact, even though they are allusing the same name.

Components of a credible CLMRS
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 – toimprove coordination, harmonisation, and coherence. A credible
CLMRS executes at least four functions; awareness raising,identification of cases, provision of support, and follow up.

A CLMRS is only credible if a company annually makes public:• Number of households covered by the CLMRS (in absolute numbers,
as well as in % of total sourcing, both direct and indirect)• Number of children in the CLMRS (in absolute numbers, as well as in% of total sourcing, both direct and indirect)• Number of cases identified in (worst forms of) child labour• Number of children no longer in (worst forms of) child labour after
one and two follow up visits• Kind of support provided

31 It is worth noting that a CLMRS system costs around US$50-$85 per cocoa growing
household per year, which is only about 6% of the costs of 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 afraction of the final retail price is already considered too much in tackling an issue asegregious as child labour.

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Only organised farmers
Most CLMRSs are only available in farming communities or cooperatives
that are part of company programmes. According to recent EU research32
only 10-20% of farmers in the cocoa supply chain receive someintervention programmes. These tend to operate in the better-organised
segments of the cocoa sector. However, most cocoa is still not traceable,
and the non-traceable cocoa potentially comes from areas where
producers are not organised into farmer groups and risks of child labour
are likely higher.
Poverty
Even the most effective child labour interventions will not be able tosolve the challenges if the root causes of child labour are not addressed– in particular the structural poverty of cocoa growing communities andaccess to quality education (UNICEF 2018). As such, the current CLMRS
approaches can only be seen as part of what needs to happen. Any childlabour approach must directly and clearly tackle farmer poverty.

Labour rights

Though in West Africa cocoa is largely grown by smallholders, wage
labourers play a large role in the workforce in cocoa in Latin America.
Furthermore, seasonal hired workers are common in the cocoa sector
across the world. In Ghana, hired labour is often used to cope with peakworkloads, although in Côte d’Ivoire this seems to be less common(Hainmueller/Hiscox/Tampe 2011: 30; Selten 2015: 25-27; Bymolt/Laven/
Tyszler 2018: 165-166). In Latin America, where cocoa plantations areoften a lot larger, there is much more wage labour.
Wage labour in West Africa
The situation of most workers on West African cocoa farms is precarious.
A large proportion of the employees work on a temporary basis andwithout employment contracts. Most workers in Ghana on cocoa
plantations earn much less than a living wage (Smith 2017). As early as
ten years ago, studies pointed to the sometimes extremely low wages,
with workers on cocoa farms in Côte d’Ivoire and Ghana earning between€150 and € 300 euros a year, many of them even less. (Republic of Côte
d’Ivoire 2008; Republic of Ghana 2008). As a result, there is a shortageof hired farm labour despite considerable under- and unemployment;

32 See https://knowledge4policy.ec.europa.eu/publication/ending-child-labourpromoting-sustainable-cocoa-production-c%C3%B4te%C2%A0divoire-ghana_en

people are neither willing nor able to work at below-subsistence levels.
Most of the farmers cannot meet higher wage demands, as they earnvery little themselves. Moreover, the income of female day labourers incocoa farming is significantly lower than that of men. There are reports ofbonded labour, i.e. people having to work off debts on the plantations andtherefore 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).
Wage labour in Latin America
Many cocoa farms and plantations in Latin America use hired labour;
large plantations even depend on it. This can lead to challenges aroundlabour rights and the freedom of association. Annually, the International
Trade Union Confederation (ITUC) publishes an analysis on labour rights
violations. Brazil, Colombia, and Ecuador are rated with “No guaranteeof rights” (category 5, worst possible rating), Peru with “Systematic
violations of rights” (4), Mexico with “Regular violations of rights” (3) andthe Dominican Republic with “Repeated violations of rights” (2). In the2021 ITUC-report, Brazil and Colombia are on the list of “The world’s 10
worst countries for workers” (ITUC 2021). Though child labour plays amuch smaller role in Latin America than in West Africa, in Brazil, courts areinvestigating the responsibility of multinationals concerning cases of childand forced labour in the cocoa sector.
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.

The work of international trade unions in the cocoa sector
The international trade unions, united under IUF and EFFAT, work
to build union networks in the main cocoa and chocolate trading,
grinding, and processing companies. Recent work in Ghana has
included occupational health and safety (OHS) training and assisting
affiliates to lobby the government for stronger OHS legislation.
The unions remain committed to work to eliminate child labour inagriculture. For the International Year for the Elimination of Child

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Labour the IUF produced a leaflet of demands – welcoming the focus
on child labour but stating that for it to be effective there had to berecognition that the majority of child labour (70%) was in agriculture
and sector-specific strategies and plans must be developed andimplemented. This call was repeated at the 5th Global Conference
on the Elimination of Child Labour. An IUF delegation (including
a representative from GAWU) took part in the Durban meetingand lobbied successfully for a Call to Action that included specificcommitments to work on eliminating child labour in agriculture. Theinternational trade union movement successfully lobbied at the ILO
for the upgrading of OHS standards to be included amongst the core
conventions/fundamental rights and principles at work. This will assist
trade unions to put more pressure on governments and employers to
improve OHS.

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.

The position of wage labourers, sharecroppers, and tenants, need to bebrought much more into the various policy conversations in the cocoa
sector, from livelihoods through to representation and workers’ rights.

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.

Gender inequality

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 labourers 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 rate of female illiteracy andinnumeracy, often do not share in the rewards of the family’s farms.
Additionally, women are often confronted with sociocultural systems which
prevent them from running their cocoa farm as a viable business. They also
have a harder time accessing extension services, credits, and certification
than their male counterparts, and are often underrepresented in farmers’organisations, public meetings, and leadership roles in communities.
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
often fail to reach the women in cocoa growing communities. This has
negative consequences for the women themselves, and as such is reason
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) excluded.
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 can earnmore 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.
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 a

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change of attitude of the men in the communities. The transformationfrom traditional, often restrictive customs to more equality between men
and women 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.

Summary

Although the focus on human rights violations in the cocoa sector often
is on child labour, there is a wide range of problems facing families in
the cocoa sector. Gender inequality, (infant) malnutrition, lack of accessto education, insufficient health care facilities and sanitation, insecurityof land and tree tenure and rule of law, labour rights violations forsmallholders, workers, and tenants; the list is long and by no meanscomprehensive.
Understanding what does and does not constitute child labour is an
important first step in this conversation. Not all work done by children
on a farm is child labour. However, there are 1.5 million children inWest Africa’s cocoa farms that are performing age-inappropriate
labour, putting them in Child Labour. Most of them are involved inhazardous labour, which also makes it the Worst Forms of Child Labour.
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. Though there are morechildren in (the worst forms of) child labour in cocoa, the severity ofthese cases seems to be decreasing. On average, children are involvedin fewer kinds of hazardous activities, and the amount of hours they
are working on the farms is also reducing. However, due to the strong
increase of numbers of households involved in cocoa production,
the absolute number of children involved in (the worst forms of) childlabour is still growing.
Investments and ambitions – of both companies and governments –must be increased by several magnitudes if targets on child labour are
ever going to be more than greenwashing and empty words. These
increased ambitions must be coupled with mandatory regulations;promises must be enforced with real consequences in the case of a
failure to meet them.

Prevention approaches through community outreach are a key partof these interventions, as are supply-based approaches – child labourmonitoring and remediation systems (CLMRS). When done properly,
CLMRSs identify around 60% of the children in a community involvedin child labour. Both community development and supply chain
responsibility are needed. They are not mutually exclusionary.
Women run many cocoa farms in West Africa, but their role is often notrecognised or remunerated accordingly. Additionally, women are often
confronted with sociocultural systems which do not enable them to run
their cocoa farm as a successful business. Unless specifically designed
to do so, cocoa sustainability programmes will often fail to reach thewomen in cocoa growing communities. Gender agnostic interventions
might even lead to greater inequality between men and women.

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69

5. Racism,
representationand decolonisation

70

Why do Europe and the United States have most of the power in the
global commodity trade? Why are all the large cocoa and chocolatecompanies – and therefore the decision-making power – based in the
Global North, far from where the key crop is grown? How come there
are no West Africans in senior positions in the cocoa and chocolate
industry? Why is it that voices of NGOs from the Global North are
more easily heard than those from the producing nations themselves?
These questions are an elephant in the room around sustainability
conversations in any tropical commodity. And though the few pagesof this chapter, clearly, are never going to be enough to do this topic
justice, perhaps they might be a starting point for a sector-wide
conversation and internal reflection.
The current reality of the global cocoa trade – and the injustices andinequality that it contains – cannot be understood without the context
of the past; the history of colonization informs trade structures that havetransitioned into our era. The current cash crop driven economies inWest Africa are a direct result of both colonial rule as well as by extensive
interventions by the IMF and World Bank.
Though Europe and North America send so called development aid
towards the Global South, this is dwarfed by the value extracted fromthe Global South in cheap labour, agricultural products, and othercommodities. The Global North still appropriates the vast majority of thewealth of its former colonies.

Historical injustices resonate in current sensitivities
Straddling the coast of Ghana, halfway between Accra and Côte
d’Ivoire, lies Fort Elmina. This historical slaving station is a symbol of
the horrific transatlantic slave trade. Generations of West Africans havegrown up with the knowledge of this historical injustice.

However, use of the term “slavery” does not just refer to a historicalinjustice of centuries past, it is still often used in the context of cocoa.
Some actors, especially in the Global North, have used the concept‘modern slavery’ liberally over the past decades. It is not only used
to describe cases of forced labour – which remains a real issue in thecocoa sector – but has also often been used as a blanket term for manydifferent labour violations in the cocoa sector.

The intentions of especially civil society and media in the Global Northmight have been good, but it exhibits a lack of understanding of the
deep historic and painful resonance of the word “slavery”.
Stakeholders should critically review their communications and reflect
on whether this is always the appropriate terminology to use.

Representation
All too often, the cocoa sustainability conversation is about farmers,
without having farmers at the table. It is about African or Latin Americaninterests, without these interests being represented by African or
Latin American organisations and governments. This has serious andfar-reaching implications. Interventions are generally chosen that areconvenient to those in power, not to those who must implement theinterventions. Language is used that might further inflame historic
injustices, or simply confirm existing power imbalances.

Barriers to representation can vary widely; absence of translation, costs oftravel, visa restrictions,33 or an absence of funding for hours, can alreadypose a high threshold. Prejudice and discrimination against people ofcolour abound – both in the Global South as well as against people ofcolour in the Global North.
The lack of representation at senior level in the chocolate and cocoa
sector is stark. Of the sixteen board members of the World Cocoa
Foundation, not one is from West Africa. None are black. The Executive
Secretary of the Côte d’Ivoire and Ghana Cocoa Initiative – an Ivoriannational – was not able to break the glass ceiling after decades within thecocoa industry as director. He was elevated to executive position by aWest African initiative, not by western multinationals. Though it is best not
to have the illusion of representation, these examples do show where thepower lies, and in whose interest this power is exercised.
The fact that farmers and West African governments have been calling forhigher prices for many years, but that companies simply are not willing tobroach that subject is a good example of this.

33 Visa restrictions are definitely intended barriers; their whole designed purpose is to exclude people from the Global South to move freely and at will.
Stakeholders in the cocoa sector would do well to ensure that activities for a
global dialogue – if held in person – are held in countries with the least possible travel restrictions for Southern participants.

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A lack of representation can be unintended – part of the problem ofprivilege is that it is often blind to its own privilege – and to address this, allstakeholders should actively question to what extent this might affect theirown operations. Whether or not the lack of representation is intended, thelived reality for those that are not represented is equally harsh.
72

There is a direct power imbalance between those with money – andtherefore decision-making capacity – and the recipients of support.
Whether these are company-initiated or run by international organisations
or NGOs; in donor-client relationships, southern implementors andcommunities are unequal partners. Not only is there a financial power
imbalance, but in the north-south relationship, generally the risk is also
largely borne by the “clients” in the Global South.
The voice of farming communities as well as of producing governments
to actively tackle the issue of low commodity prices continuously is
counteracted by global industry, for example. Instead, the importanceis stressed of agronomic approaches, implying that it’s the (lazy or
uninformed) farmers that are to blame for their own poverty. If decisions
are made by those in Europe and the United States, those decisions tend
to favour those in power.

the community. The Ghanaian Civil Society Cocoa Platform (GCCP)34 andthe Plateforme Ivoirienne pour le Cacao Durable35 both bring together
dozens of CSOs and producer organisations, speaking out at both anational and international level.
Dismantling unjust structures
Bridging the vast gap in representation will take a long time – andproactive engagement by everyone. However, change is always a day
away if the journey never even gets started delivering on the low-hanging
fruits, such as paying higher farm gate prices and inviting farmers to
the global cocoa dialogue. There will also be setbacks, and part of thechallenge is to not expect perfection from the start. Southern leadership– including farmers, researchers and activists – needs time, space, andresources to build its voice and power. Dealing with the topic of racial
injustice will require every actor – industry, government, and civil society
alike – to recognise and openly deal with their own role in maintaining or
dismantling the globally unjust structures that we currently all operate in.

Summary

The current reality of the global cocoa trade – and the injustices andinequality that it contains – cannot be understood without the context
of the past; the history of colonization informs trade structures thathave transitioned into our era. Furthermore, representation matters. All
too often, the conversation is about farmers, without having farmers at
the table. It is about African or Latin American interests, without theseinterests being represented by African or Latin American organisations
and governments.

The division of labour in the production chain has been inherited from thecolonial period; the decision making power lies elsewhere than in West
Africa. Implicitly, there is an assumption that the injustice and inequality
could be dismantled within the current division of labour. It is an open
question whether this would even be possible.
Progress
The past years have seen some major steps of self-organisation andrepresentation in West Africa, both at the level of government and of civilsociety. The collaboration between the governments of the two largest
cocoa producing nations to set up the Côte d’Ivoire and Ghana Cocoa
Initiative is a seminal development, where producing nations are working
together in using their market power to demand structural reform in theway cocoa is being traded. Recent developments that Cameroon and
Nigeria are seeking closer collaboration with this initiative are important
steps forward.

At civil society level, both Ghana and Côte d’Ivoire have seen theformation of broad collaboration between civil society and farmerorganisations, to ensure they can speak up on behalf of rightsholders in34

https://gccp.org.gh/

35

http://www.plateformecacao.org/

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6. Market Developments

The global economy is in troubled water; the Covid-19 crisis is not over,many value chains are still disrupted, and the Russian invasion in Ukraine
has caused problems and strongly increased costs and prices in many
global value chains, pushing even more people into (extreme) poverty.
The cocoa sector was and is affected by this on different levels, but forcocoa and chocolate companies, business remains surprisingly stable, formany companies even extremely profitable.

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Desperate times for cocoa farmers

For cocoa farmers, these are dire times. Prices of staple foods increased
sharply at the beginning of the Covid-19 crisis. After the first shock,prices decreased and stabilised, but often well above pre-pandemic
levels, coupled with high inflation rates. During 2022, the situation forfarmers worsened significantly. Prices for fertiliser already started to risein 2021, but after the Russian invasion of Ukraine in February 2022, theircost exploded. To exacerbate things, fuel prices rose considerably, with adirect impact on overall inflation including food costs in cocoa producing

Cocoa production in 1,000 tonnes 2020/21 (forecast)
Domestic imports of cocoa in 1,000 tonnes 2020/121
Source: ICCO 2022, Table 3,9

177

2,460

79

376

1,067 Rest ofEuropeAmericas811

62

196 Rest of Africa
3,665
375

969
355

Rest of
Americas220

Brasil2,130

Côte d’Ivoire

689

Ghana

703

178

Turkey

108

266
180

120

China

Japan

280 Nigeria

290 Cameroon
EcuadorRest of
Asia

Australia

112 Africa

USA

The sustainability lie
Many companies know their cocoa comes from farms that struggle
to feed their family, to send their children to school, and to hire adultlabourers instead of working with their own children on the plantations.
Despite this knowledge, more and more companies claim that theirproducts are sustainable. When criticised from NGOs for doing
this, they often reply that the cocoa is certified by standard-settingorganisations or by company projects.

According to the first globally agreed on definition of sustainability, thisis pure greenwashing.
“Sustainable development is development that meets the needs of thepresent without compromising the ability of future generations to meettheir own needs. It contains within it two key concepts:
the concept of ‘needs’, in particular the essential needs of the world’s
poor, to which overriding priority should be given; andthe idea of limitations imposed by the state of technology and socialorganization on the environment’s ability to meet present and futureneeds.” (Brundtland 1987)

Production / Imports

Canadacountries. Farmers are confronted with massively higher costs to feed theirfamilies. Although minimum farm gate prices for cocoa were raised in both
Ghana and Côte d’Ivoire, this was nowhere near the levels of inflation. In
October 2022, inflation rates in Ghana officially reached 37% when the
fixed price for the new season was announced at 21% higher than the year
before.

Cocoa farming families usually cannot cover their essential needs.
According to recent studies there’s no big difference between
families living on farms supported by projects or being certified andothers.36 Additionally, the deforestation in the cocoa sector reinforces
the global climate crisis and this threatens the prospect of all future
generations in the cocoa belt. To call cocoa coming from these regions
sustainable completely ignores the situation of cocoa farmers and of
the ecosystems.

Indonesia

86

Rest of Asia

36 See the summary of existing figures in (Le BASIC 2022: 66-69). The same
study calculates what farmer receive for conventional and for certified cocoa
sold on the German market. Differences are very small, see page 54-58.

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Stable chocolate market

78

For chocolate and cocoa companies, the outlook is much less worrying.
Chocolate sales have expanded steadily over decades, with only small
disruptions for the global cocoa and chocolate industry. In most leading
chocolate consuming nations, demand for chocolate is very stable.
Although during lockdowns people couldn’t shop as much, travelled
less, and didn’t go to restaurants and canteens as much, places where
chocolate is often consumed or purchased. The turnover for the chocolate
industry remained relatively stable, with a growth in 2020, and a slightdecrease in 2021. It is expected that sales of chocolate will keep on risingin the future.
High profits
Most companies boasted high profits during the last two years. Even theCovid-19 crisis only had a limited impact. Both OFI and Cargill reported
record profits in 2021. Mondelez, Hershey37, and Barry Callebaut38 all
have reported strong profits in earnings call with investors in 2022, with
Mondelez even claiming this was “driven by higher pricing”.39

Traders and Processors: Used Cocoa 2021
61%

38%

1,019 OFI
30% 40%79
988 Barry Callebaut2

49%

66%
875 Cargill3

25%

52%
800 ECOM

50%

24%

525 Sucden2,4
59% 100%

It is, to put it simply, a very good time to be a chocolate company.

328 Touton

Chocolate consumption in Russia and Ukraine
The attack of Russia on the Ukraine will lead to a decline in chocolate
consumption. Factories in Ukraine are partly not working presently,
Western companies reduced exports to Russia and the economiccrisis in Russia due to sanctions and in the Ukraine due to war willlead to a decreased demand. Before the war, the two countries had aconsumption of 200,000 tonnes of cocoa bean equivalents.

40%
200 Blommer/Fuji Group76%
102 ETG
38% 87%80 Cemoi5

Traceable to farm / to coop / used cocoa 2021(1)In
thousands of metric tonnes
1) using ICCO conversion rates: Cocoa butter 1.33, Cocoa paste/liquor 1.25, Cocoa Powder andcocoa cake 1.18

37 See https://bartalks.net/hershey-half-year-results- profit-boosted-despiteinflation-worries/
38 See https://www.barry-callebaut.com/sites/default/files/2022-04/PRR%20
Barry%20Callebaut%20Group%20Half-Year%20Results%20Fiscal%20Year%20
2022_0.pdf
39 See https://seekingalpha.com/article/4503813-mondelez-international-incmdlz-ceo-dirk-van-de-put-on-q1-2022-results-earnings-call2) fiscal year 2020/21
3) The Hershey Company stated they source between 200,000 - 240,000
tonnes per year, we took the middle of that range
4) estimates by the authors(5) 100% of the grinded beans are traceable to cooperative level and 45% of the grinded beans
are traceable to farm level, but due to additional volumes needed to produce chocolate thepercentage is reduced to respectively 87% and 38%”

Traders and grinders

80

Highly concentrated market
Volumes of the major trading, grinding, and processing companies haveremained stable over the past years. Although tonnages do not add up
to a total volume used – these companies partly trade with each other –4.5 million metric tons of cocoa bean equivalents pass through the six
biggest companies. Each of the largest four companies trade as much oreven more cocoa than is grown in Ghana, the world’s number two cocoa
producer. With great power comes great responsibility.40 The enormous
market concentration in the cocoa sector puts a burden of responsibilityon the leading companies concerning human rights due diligence and the
avoidance of deforestation in their value chains.
Traceability
An important part of that responsibility is to ensure full traceability
throughout the supply chain. At present, there are many ways thatcompanies are approaching traceability. Some rely on the figures fromstandard-setting organisations and cooperatives. Others work with GPS
localisation and polygon-mapping, which are much more reliable than
the self-reporting of cooperatives and farmer groups. While traders andgrinders have made progress concerning traceability, large differences
can be observed. Traceability to cooperative level is lowest for Barry
Callebaut and Blommer/Fuji Group, with 40%, and highest for Cemoi with87%. Traceability to farm level also progressed, where the range goes from
24% for Sucden to 76% for Cocoanect.

Creating traceability along the value chain down to farm level comes witha cost. Additionally, all stakeholders are aware that transparency will leadto follow-up costs; knowledge about the origin of the cocoa comes withknowledge about poverty, malnutrition, child labour, underpaid workers,other human rights violations, and deforestation.
Cocoa traders, grinders, and processors are in most cases not the
producer of the final chocolate product. As such, they depend on
chocolate brands and retailers to pay for these additional costs. However,this is not always the case. In fact, there are reports of pressure by
downstream companies to reduce costs of sustainability programs, orfor traders to co-invest in programs run by chocolate companies. In thatlight, it is relevant to mention that the relative margins for cocoa traders
are small – they earn not unsignificant profits because of the immense
volumes that they trade in.
40 This line, spoken by Uncle Ben to his nephew Peter Parker (Spiderman) is also
called the “Peter Parker Principle”.

Chocolate Brands: Used Cocoa 20211
59% 75%400 Mondelēz International7,1151%
391 Nestlé
44% 59%365 Mars
46% 68%220 Hersheys6,7
96% 100%
208 Ferrero2,964%
145 Lindt und Sprüngli

Traceable to farm / to coop / used cocoa 2021(1)In thousands of metric tonnes

Though part of the reason why traceability is not universal yet is a lack ofambition and funding by the cocoa (and chocolate) sector – and a lackof legislation in consuming countries at present. Another part – at least in
Côte d’Ivoire – is national legislation. By law, at least 20% of cocoa sourced
by companies must be bought via local exporters. These local exporters
cannot or do not want to provide the traceability needed, as they source
through local middlemen such as pisteurs and traitants.
Traceability
The chocolate sector also remained mostly stable. There are two
exceptions. Mars reduced its cocoa demand by nearly 10% and Ferrero
grew strongly. Traceability to cooperative and to farm level increased
significantly. Ferrero is the first major company which claims to have
100% of cocoa traceable to the cooperative or first buyer, while Nestlé

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says that for 51% of the cocoa used. Ferrero also claims to have thehighest traceability to farm level with 96%, while Mars reports 44%.
Ferrero additionally stresses that 88% of the farms in the value chain of
the company are polygon mapped and 100% are certified. Traceability forchocolate brands is significantly higher than of big traders and grinders.
All of them have targets to reach full traceability – if they haven’t alreadyreached it – to at least cooperative level. To achieve these goals, they
concentrate procurement on sources that are more transparent than
average.
Untraceable cocoa butter
However, these numbers are deceiving, and at least part of their sourcing
remains untraceable: most companies buy cocoa butter of unknown
origin. Some companies are working on this. Tony’s Chocolonely has had
traceable cocoa butter for several years now, and Lindt & Sprüngli has atarget of 100% traceable butter by 2025.

Producer countries

Increased production
Global production volumes of cocoa have gone up by about 20% in
the past ten years, from 4,1 million tonnes in 2011/12 to 4.9 in 2021/22.
Despite tremendous industry investment, this increase in volume is
not because of higher productivity per hectare, but because of theenlargement of planted areas. Many of the new plantations wereerected in protected areas or even in natural reserves. According to thegovernment of Côte d’Ivoire, 10% to 15% of the harvest comes fromillegally planted areas, NGOs think that it might be more than 30%. Ghana
also has a serious problem with plantations on illegally deforested land.

Côte d’Ivoire, and to a lesser extent Ghana, dominate the world’s
production. The sheer market power of these two countries with morethan 60 % of global cocoa production sets the frame for the whole sector.
However, Ghana’s production is starting to decline.41 At the same time,
Latin American countries are increasing their production significantly.
Ecuador, in fact, might even overtake Ghana as the world’s second largest
cocoa producer within the next ten to fifteen years.

41 This decline is the result of a triple threat of an outbreak of Cocoa Swollen
Shoot Virus (CSSV), increasing pressure on cocoa by gold mining, as well asa cost-of-living crisis driving farmers out of high-cost high-risk low-remuneration agriculture.

Supply management
With volumes trending upwards globally and farm gate prices becoming
an ever more important topic, it would stand to reason that a lively
conversation would be taking place on supply management. However,despite chocolate and cocoa companies always pointing to supply anddemand as being the main determinant for cocoa prices, the discussion
on supply management policies is largely absent.

Though Côte d’Ivoire has implemented policies against increasing
productivity since the price collapse of 2016/17, this does nothing to curb
increases from newly developed cocoa farms. At the same time Ecuador
and to a lesser extent Peru are strongly growing their cocoa sector,
including bulk cacao CCN51, partly masquerading as fine flavour cacao.42

The International Cocoa Organisation (ICCO) has been trying to get aworking group of government and private sector exports together on
supply management, but progress is painstakingly slow, largely due toinaction on the side of the Ghanaian government who chair the working
group.
If the production of cocoa could be kept to a level just below the global
demand for a long enough time, this could drive prices up at a global
level. The benefits for farmers as well as for producing companies should
be obvious to all. Conversely, if overproduction is not curbed, massive
price crashes such as in 2016/1743 will continue to happen, destabilisingcocoa farming communities across the world.
Though supply management is not a silver bullet, it must be part of thetoolkit of policy measures to increase sustainability in the cocoa sector.

Standards

The race for certified volumes in the past decade has not led to the bar
being raised. Even though at least a third, perhaps even more than half,of all the global cocoa production is grown under a certification label oran own company sustainability label, major problems persist; chocolate

42 Though Ecuadorian claim that 75% of their export is Fine Flavour Cacao, thereality is that as much as 70% of Ecuador’s cocoa production nowadays consists of standard quality cocoa.
43 Which was driven by an unexpected massive production increase in Côte
d’Ivoire83

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companies and retailers tend to look for the cheapest label, neglecting thepotential negative effects of this price pressure. If anything, the relevanceof certification standards has been declining. For a long time, it seemedthe only tool available to achieve sustainability was certification. With anincrease in sector efforts, in data and research, and in experience with
implementation, the sector now has a wider range of interventions at its
disposal.
Certified is not the same as sustainable
Claiming sustainability off the back of a certification system is misleading.
However, the terms “certified cocoa” and “sustainable cocoa” are still often– wrongly – used interchangeably. Certified cocoa cannot be claimed tobe sustainable merely based on certification, whether this certification isFairtrade, Rainforest, ISO/ARSO, organic, or any other standard.
Standards focussed on farmers, not the multinationals
Thinking that farming standards are the answer implies that bad farming is
the problem. Whereas most standards do have a trader code of conduct,
the focus has historically been on the farming standard. For chocolatecompanies to be able to sell a product as certified requires very little
fundamental change in the way they operate. Certification has donevery little to close the power gap between multinationals and farmers. If
a farmer is required to change most of his/her business practices to beable to sell their product, why shouldn’t the same be asked from large
multinational corporations?
Benefits of certification
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.
Advocacy
Both Fairtrade and Rainforest Alliance engage the cocoa sector in
advocacy efforts that go beyond the direct interest of promoting theirown standards. This is a necessary and welcome acknowledgement that
Voluntary Sustainability Standards (VSS) are only part of the solution andthat farm standards operate in a broader social context. In that light, it isgood that both standards are strongly advocating the need for regulation
and broader landscape approaches. At the same time, standards
engaging in advocacy also creates complexities around the businessinterests of the VSSs, 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 Nestlé Cocoa Plan. Both
Fairtrade and the Rainforest Alliance fear that large licensees will opt
for their in-house sustainability programmes and abandon the original
standards. The companies’ own programmes are much less transparent
than Fairtrade and Rainforest Alliance, potentially leading to a race to thebottom. Impact studies are only partially published, and many companies
have not even published their standard. Furthermore, the democratic
consultation processes that are in place in particularly Fairtrade andRainforest Alliance are absent in in-house sustainability programmes, thathave a much more top-down hierarchy. All standards must be third-party
verified to be credible85

Summary

86

Though the world is going through economically difficult times,
chocolate and cocoa companies are not merely stable, they are
thriving. For farmers, however, times are desperate, with cost of living
and cost of production skyrocketing while the price they receive for
their cocoa is relatively stable.
Companies
At trader/grinder level, the sector remains extremely concentrated.
The enormous market concentration in the cocoa sector puts a burdenof responsibility on the leading companies. An important part of that
responsibility is to ensure full traceability throughout the supply chain.
The levels of traceability vary strongly between companies, but all havea significant portion of indirect – and therefore untraceable – sourcing.
At chocolate company level, traceability seems to be higher, but this isbecause they concentrate their procurement on sources that are moretransparent, thereby leaving the untraceable cocoa to other market
actors.
Supply management
Globally, production of cocoa continues to increase, primarily driven
by growth in Côte d’Ivoire and Latin America. Despite chocolate andcocoa companies always pointing to supply and demand as being
the main determinant for cocoa prices, the discussion on supply
management policies is largely absent. Though it is not a silver bullet,
supply management must be part of the toolkit of policy measures toincrease sustainability in the cocoa sector.
Standards
The race for certified volumes in the past decade has not led to thebar being raised. Even though at least a third, perhaps even more thanhalf, of all the global cocoa production is grown under a certification
label or an own company sustainability label, major problems persist;
chocolate companies and retailers tend to look for the cheapest
label, neglecting the potential negative effects of this price pressure.
Claiming sustainability off the back of a certification system ismisleading. However, the terms “certified cocoa” and “sustainablecocoa” are still often – wrongly – used interchangeably. Certified cocoa
cannot be claimed to be sustainable merely based on certification.

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7. Enabling environmentLegislative environment in consuming countries

90

Public concern over the impacts of the production of cocoa on humanrights and the environment has been growing since at least the turn of themillennium. On top of the well-known association of cocoa production
with child labour, this concern has been sparked in recent years by thegrowing awareness of the impact of agriculture on the climate. Worldwide, the main driver of deforestation – with accompanying impacts on
greenhouse gas emissions – is clearance for agriculture. While other‘forest risk commodities’, such as cattle, palm oil, soy and timber are larger
contributors to global deforestation, cocoa is an important driver of forest
clearance in West Africa.
In response, consumer countries, particularly the EU and UK, aredeveloping policy measures to break the link between supply chains andissues such as child labour and deforestation. Mainly, this aims to placerequirements on industry – the companies sourcing cocoa and placing
cocoa products on the market – to improve transparency and ensure their
supply chains are free of cocoa produced with negative impacts on humanrights and/or the environment. This development is part of a broader
policy debate - at national, EU and UN level, and cutting across all sector on how to ensure responsible business conduct, in line with human rights
and sustainability agendas.
Central in this policy debate is the introduction of mandatory ‘due
diligence’ obligations for companies. In 2011, the UN Guiding Principles
on Business and Human Rights confirmed companies have a responsibility
to respect human rights. In order to meet that responsibility, companies
should put in place a continuous due diligence process to identify,
prevent, mitigate, and remediate their negative impacts on human rights.
Initially, the emphasis of policy makers was on encouraging company selfregulation, but it was increasingly clear that corporations had made little
substantive changes in their practices. In response, there is an increasing
trend towards disclosure and transparency laws as well as mandatory
human rights (and environmental) due diligence. Recently, company
support for legislation and company implementation of human rights
and environmental due diligence has also been on the rise in a numberof business sectors, including in particular financial services and foodproduction and processing. It is also now increasingly being applied bybusinesses to identify, prevent, and mitigate the risks of negative impacts
on the environment, human rights, and social and labour standards.

To date, existing or draft legislation on sustainability requirements withregard to human rights abuses and/or environmental harm has largely
taken one of two approaches:• A requirement for companies to implement a due diligence processthat covers potential negative impact on human rights, labour rights,
or the environment – ideally based on the UN Guiding Principles andthe OECD Due Diligence Guidance – applying to an enterprise’s entire
operations and value chains, not specific to any sector or product, andnot a requirement of placing products on the market.
• A product-based requirement, either on a specific issue (suchas conflict minerals, deforestation, or child labour) or a specificcommodity (such as the EU Timber regulation), for certain activities to(not) be undertaken before specified products can be placed on themarket, imported, or exported.
Some examples of each type of legislation are listed below; several othercountries are also considering introducing similar legislation.

General corporate obligation of due diligenceThis approach to due diligence in legislation covers a range of socialand sometimes environmental criteria; it is often called ‘human rights
due diligence’ or ‘human rights and environmental due diligence’. It
follows closely the concept of due diligence articulated in the UN Guiding
Principles on Business and Human Rights and various OECD guidance
documents. It is applied across an enterprise’s entire operations andsupply chains.

The UN Guiding Principles on Business and Human Rights (UNGPs)
The UN Guiding Principles on Business and Human Rights (UN Guiding
Principles) are a set of guidelines for governments and companies toprevent, address and remedy the risk of adverse impacts on humanrights abuses linked to business activity. They were endorsed by the UN
Human Rights Council in June 2011. The UN Guiding Principles outline
key three principles that should guide all considerations around humanrights in value chains. These three principles are
1. The state duty to protect human rights.
2. The corporate responsibility to respect human rights (even if states
have not protected human rights, as stipulated in the first principle)
3. Access to remedy for victims of business-related abuses
The UN Guiding Principles further explain in detail what is expected of

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states and corporations to live up to their duties and responsibility, andvarious OECD Guidance documents have further elaborated that aswell.

law to Parliament in line with the OECD Guidance and UNGPs – although
it sadly is lacking reference to living income, living wage, and purchasing
practices. The Dutch Cabinet was also developing a draft legislative
proposal but have put this on hold to discuss the parliamentary proposal.

FranceIn March 2017 France adopted the corporate Devoir de vigilance dessociétés mères et des entreprises donneuses d’ordre (Due diligenceof corporations and main contractors) law applying to companies
incorporated under French law with more than 5,000 employees in France
or 10,000 world-wide. Companies subject to the legislation (in 2021 there
were 263 companies identified by the French coalition of NGOs, FCRSE
44) must implement and publish a ‘vigilance plan’ explaining how they are
exercising due diligence in seeking to identify and avoid human rights
violations, breaches of fundamental freedoms, violations of health andsafety rights and environmental damage. This includes the identificationof risks, procedures for regular assessments of the parent company andits subsidiaries, as well as sub-contractors and suppliers with which there
is an established business relationship, actions to mitigate risks or prevent
serious harm, and mechanisms for alerts and monitoring. The companies
must also publish annual reports on progress. The state plays no role inverifying compliance, but civil liability mechanisms can be pursued bythird parties in case of an enterprise’s failure to implement the plan or if
there are weaknesses in it.

Germany
The Supply Chain Due Diligence Act was approved in 2021 and will enter
into force in 2023. The obligation will apply to companies with more than
3,000 employees, falling to 1,000 from 2024; this will ultimately coverabout 4,800 companies. But many companies are already demanding
information from suppliers about rights risks and the value chain, so thatthe law covers much more companies.

Netherlands
The Child Labour Due Diligence law, adopted in May 2019, obliges
companies to investigate whether their goods or services have been
produced using child labour and to devise a plan to prevent child labourin their supply chains if they find it; they must submit a statement to theauthorities declaring that they have investigated risks of child labourin their activities and supply chains. It applies to all companies that sellor supply goods or services to Dutch consumers, no matter where thecompany is based or registered, with no exemptions for legal form or size.
The law was anticipated to enter into force in 2022, but in December 2021,
the government announced plans to replace it with a broader requirement
for mandatory due diligence, as specified in OECD Guidelines, covering
all impacts listed there and including a remediation obligation if
prevention fails. This was partly designed to put pressure on the European
Commission to publish its own proposals (see below). In the meantime, inNovember 2022, a coalition of parties submitted a parallel Due Diligence
44 See https://plan-vigilance.org/wp-content/uploads/2021/07/2021-07-05-Radar-DDV-Rapport-2021.pdf

The law obliges these companies to fulfil their due diligence obligationsin their supply chains – including their direct suppliers – with regard torespecting internationally recognised human rights and environmental
harm which affects human rights. The law specifies a series of steps
which the due diligence obligation requires, including establishing arisk management system, performing regular risk analyses, establishinga complaints procedure, taking remedial action, and documenting andreporting. If the risk analysis leads to a “substantiate knowledge” about
potential risks further down the value chain, it has to tackle his risks.
Affected parties have the right to assert to the authorities that their rights
are being violated or directly threatened by a company’s failure to comply
with its due diligence obligations; in this case, the authorities must takeaction to investigate whether a breach has occurred and work towards its
elimination by the company.
European Union
In February 2022, the European Commission published a proposal fora Corporate Sustainability Due Diligence Directive (CSDDD). This isintended to place an obligation of due diligence on large companies
registered or operating in the EU with regard to human rights abuses andenvironmental harms in their operations and value chain. The company
size threshold is lower for enterprises operating in ‘high-impact’ sectors,
which include agriculture / forestry / fishing / food, textiles, and minerals.
SMEs are exempted from direct obligations, but many will fall into thecategory of entities with established business relationships with larger
companies. The criteria on which the due diligence obligations areproposed to be based are defined with reference to a wide range of UN
human rights instruments, ILO conventions and multilateral environmental
agreements; both child labour and deforestation are included explicitly inthe annex on human rights obligations.

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The proposed due diligence procedure is defined in six steps. Companies
are to: integrate due diligence into their corporate policies and have a due
diligence system in place; identify actual or potential adverse impacts;
prevent potential adverse impacts where possible, and mitigate actual
impacts where not; bring actual adverse impacts to an end where possible
and minimise their extent where not; establish and maintain complaints
procedures; monitor the effectiveness of their due diligence policies
and measures; and publicly report on their due diligence efforts. As a
directive, once the legislation has been agreed through the EU’s legislative
procedures (which may result in changes in the elements outlined above),it will need to be implemented through national legislation in all 27 EU
member states.
The current draft of the regulation has several critical short fallings. Firstof these, is that it does not require companies to ensure their farmers canearn a living income. It is insufficiently aligned with international standards
set out in the UN Guiding Principles on Business and Human Rights(UNGPs) and the OECD Due Diligence Guidance for Responsible BusinessConduct. The restriction of the due diligence obligation to ‘establishedbusiness relationships’ should either be removed or reworded to makeit clear that companies are obliged to conduct due diligence acrosstheir entire supply chain. Special efforts should be made to engage withparticularly vulnerable groups, including smallholders and indigenous
peoples and local communities, and engagement strategies should be
gender sensitive, a key element that is currently missing in the proposal.

• A prohibition on first placing or making available specified
commodities and products on the EU market or exporting them fromthe EU unless they are free of deforestation and forest degradation
after 2020 and have been produced in accordance with the relevant
legislation of the country of production.
• An obligation on companies placing products on the market or
exporting them to exercise due diligence to ensure their compliancewith these criteria.
• A ‘benchmarking system’ to assess the level of risk that products
from particular producer countries, or parts of them, may not be incompliance with those criteria.
The commodities and products to be covered are beef, cocoa, coffee,
palm oil, soy, and wood; this includes several semi-processed andprocessed derivatives, such as chocolate and leather. The regulation
supersedes the EUTR, so includes all the timber products listed there.
The due diligence procedure described in the proposed regulation
includes three steps: a process for collecting information about the
products (including the geographic coordinates of the plots of land on
which they have been grown), and evidence that the products are free of
deforestation and forest degradation and have been produced legally;a risk assessment step, to determine the level of risk associated with the
products; and a risk mitigation step if the company cannot be sure that
there is no risk, or a negligible risk, that the products are not compliant.

Market-related regulations

There are also regulations based on specific issues or products, requiring
companies that place specific products on the market to undertake avariety of sustainability activities. Generally, the legislation also includes
a prohibition on placing products that do not meet the criteria on themarket. Several examples now exist covering timber and wood products,
including the EU Timber Regulation (EUTR), where the underlying criteria
are the legality of production under relevant legislation in force in the
country of origin.

Companies are obliged to submit a ‘due diligence statement’ before theproducts are placed on the market or exported, stating that the products
meet the criteria, or at least that there is a negligible risk of them not doing
so. The statement must contain information about the products (including
the geolocation coordinates of the plots of land of production) andconfirms that due diligence was carried out and that no or only negligiblerisk was found. These statements will be entered in a register which will
be available to enforcement agencies in EU member states and, in ananonymised form, to the public.

European Union
In November 2021, the European Commission published a proposal for a
Regulation on Deforestation. (At the time of writing, the regulation is still
to be debated by the EU’s legislative process, and some of the elements
outlined below may change.) Building on the EU Timber Regulation, theproposed regulation contains the following main components:

United Kingdom
The Environment Act, approved in November 2021, makes it illegal forlarge businesses operating in the UK (above a turnover threshold, yet
to be specified) to use key commodities associated with deforestation
produced on land illegally occupied or used. The companies will also be
required to undertake due diligence on their supply chains to assess and

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mitigate the risk that relevant local laws pertaining to land use and landownership have not been complied with, and to report on this exercise
annually.

could greatly reduce the widespread use of Highly Hazardous Pesticides.
National child protection laws are often only partly or haphazardly
enforced.

The government has identified cattle (beef and leather), cocoa, coffee,
maize, palm oil, rubber, and soy as potential commodities to be covered(timber is covered separately in the UK Timber Regulation) and in early2022 consulted on which of them should have priority in a phased
implementation, along with other features of the legislation. Secondary
legislation will be published in due course.

Complaint and redress mechanisms
Accessible and effective complaint and redress mechanisms are also
largely absent in West African producer countries, both on environmental
and human rights abuses. These are necessary for rightsholders, as well as
NGOs, journalists, and investigators to hold power accountable, whether it
is corporate or government.

Switzerland
Though a progressive legislative proposal on due diligence was acceptedby the majority of the Swiss population in a referendum, the majorityof the cantons rejected the initiative. As such, the comprehensive due
diligence obligation wasn’t adopted. In its place, there are now reporting
requirements and partial due diligence obligations on child labour andconflict minerals only.

National traceability systems
The development and implementation of national traceability systems
to combat deforestation are essential. It is a positive development thatin Ghana, civil society has been consulted in the process of developing
the national Cocoa Management System. However, both West Africancountries are still to properly roll out these systems.

United States
Regulatory developments in the United States are lagging behind
on Europe. The Forest Act –largely in line with the EU Deforestation
Regulation described above – will most likely not be passed throughCongress. The White House, however, has stated they want to move
forward on a deforestation plan, and the US State Department in Octoberof 2022 put out a request for information to interested parties to provide
input as to what a US deforestation and due diligence regulation shouldlook like.

Legislative environment and strengthened institutions in
producing countries
Legislative gaps
In producing nations, there are the gaps in legislation that still need
to be filled or improved upon. A lack of land and tree tenure security
undermines the ability of farmers to actively engage in environmental
protection efforts. Other gaps exist on gender equality, governance ofcooperatives, and government transparency on the LID.

Lack of enforcement
There are also challenges enforcing legislation that is already in place.
Existing land use and environmental laws should be enforced much
more consistently. The enforcement of nationally approved chemical lists

Effect of regulations from the Global North
Upcoming regulations in the Global North will affect the way cocoa canbe brought to market. Their final text as well as their implementation andenforcement will determine whether they are effective. Traceability to farmlevel, ensuring the right definitions are used so there are no loopholes,
and ensuring that all companies are required to be compliant are all key
issues that are still at stake. What will also be key is the question of who
will pay. It is going to be essential to ensure that smallholder farmers
are support to comply to regulation, and that these necessary legislative
developments do not cause an extra burden for farming communities thatare already struggling.
Strengthened institutions
Existing institutions must be strengthened, both at a governmental level,
as well as in local communities. This strengthening can be in the formof capacity building and professionalisation, but sometimes also is as
straightforward as fighting corruption and inefficiencies. In producing
countries, there are no multistakeholder platforms such as the ISCOs
in Global North to collectively and inclusively set agendas and work
towards achieving sustainable cocoa sectors in origin countries. At
farming community level, Village Savings and Loans Associations (VSLAs)
should be universally rolled out, and farming communities should also
be strengthened in understanding their legal rights, both vis a vis buying
companies as well as the government and local rulers.

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Cooperatives

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Almost all efforts in cocoa reach only farmers that are already (loosely)organised in cooperatives. Most cocoa farmers, however, are notorganised, and are not being reached. Concerted strategies must be
developed to reach these ‘higher hanging’ fruits, and to help them getorganised.
Challenges
Strong autonomous farmer organizations should become the bedrockof the sector. This will require strengthening the role, functioning,
quality, and structure of cooperatives. At present, there is a wide rangeof cooperatives, from large to small, and from cooperatives created by
the government to ones that have developed organically. For somecooperatives, internal governance is weak, leading to a variety ofchallenges, including inefficiencies, corruption, and a lack of transparency.
Moreover, it means that many cooperatives are not able to act asadvocates for their members in policy-making processes. In some cases,
cooperative structures may be mis-used as fronts by local traders – or, inCôte d’Ivoire, by big landowners – to gain access to money or training.
Gender equality
Cooperatives often do not sufficiently 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 feesand strict requirements of land or tree ownership.
GovernanceFor cooperatives to play the positive role that they could play, they mustbe farmer-led, professionally run, financially independent and accountable
to their members. A first step to achieve that is for cooperatives to ensurethat they are democratic bodies which genuinely represent both theirmale and female farmer members.

There’s also an important role for governments and exporters to play here.
The small margins and - consequently - large volumes cooperatives arepressed to generate often don’t allow bottom-up cooperative structures togrow. Rather, the model works for financially strong middlemen.

Cooperatives should be supported in such a way that they can participate
effectively in multi-stakeholder policy processes. This is a process thatwill take time, resources, and potentially a review of the laws governing
cooperatives.

Inclusive deliberative approaches

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.

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 consensus building
techniques, enabling participants to work together (often with expert
input) to develop an agreed view or set of recommendations.
• 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.

Although based on a set of minimum threshold criteria that should apply
globally45 these strategies should be developed through an inclusive anddeliberative approach, bringing in not just industry and governments, but
ensuring civil society and local community representatives have a seat
45 Including but not limited to the International Bill of Human Rights (consistingof 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.

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at the table. Such an approach goes beyond mere “consultation”, to bea genuine discussion where stakeholders can respect, argue, build trust,
decide, and collaborate. This would give local civil society organisations
and farmers’ representatives a real seat at the table, addressing theirdisenfranchisement, and countering the lack of accountability andtransparency that allows politicians, companies, and others to act with
impunity. Changing such deep structural issues takes time, and theprocess 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.

Collaborative development of landscape approaches

Many sustainability initiatives are currently limited to cocoa-plot scale.
However, a landscape level perspective is needed necessary thatplaces interventions in the wider context of rural development, poverty
alleviation, human rights, and environmental sustainability, as well asclimate mitigation and adaptation strategies. A landscape approach also
integrates the interests for a variety of commodities and stakeholders.
These landscape approaches should be locally owned and locally led, withinternational actors – such as donors and multinationals – in a supporting
role, not a leading one.

Transparency & Accountability46

Transparency and accountability (T&A) are essential to make sustainability
efforts both credible and effective. They also provide a level playing field
for all supply chain actors, enable improved market access, and help
increase farmer income.
A first key step towards transparency & accountability is the setting up
of credible national traceability systems that inform risk assessment andmitigation. And though both Côte d’Ivoire and Ghana are developing
these, the process is taking very long. Once these systems are in place,companies will have to start publicly disclosing key findings, corroborated
by independent observers. In that light, the recent announcement by
ECA and Caobisco – the major European cocoa and chocolate umbrellaorganisations – to be actively working with the Ivorian and Ghanaian
traceability systems is a very positive development. For these kindof transparency systems to work properly, common definitions andmethodologies will need to be agreed on.
Most of the discourse around traceability currently focusses on
geographical data and environmental concerns. However, for true
accountability to be possible, these polygons need to be coupled toa variety of socioeconomic statistics, such as household composition,
income, farm gate prices paid, child labour data, etc.

Traceability of cocoa from Cote d’Ivoire

Traceable to cooperative
875,500 tonnes
43.6%
43.6%

Unknown
650,500 tonnes
32.4%

Indirect
480,400 tonnes
23.9%
56.3%

The black box: half of the cocoa traded without knowledge of origin
Despite all the progress made during the last years, still roughly half of thecocoa sourced by the big traders and grinders is not traceable. This meansthat cocoa produced on illegally deforested areas or bought from farmers
that aren’t covered by programs to improve the situation of the families
and reduce child labour finds a market.
46 A deeper dive on Transparency & Accountability can be found in the Consultation Paper released by the Barometer Consortium in October 2022, that canbe found here.

101This causes a downward price pressure on the whole market and penalises
companies who invest in projects to improve the situation of farmers.
Companies willing to pay higher prices compete on a price driven market
for standard chocolate and risk losing market share.

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Definitions• Transparency is the disclosure of information necessary to knowwhat is happening in the supply chain. Transparency has an outwardlooking dimension of demonstrating performance and building
trust. The Accountability Framework Initiative (AFi, 2019) provides
unified guidance to companies on reporting and disclosure practices
to increase the credibility of their claims. This includes guidanceon sources of information that are most relevant to supply chaintransparency, but also on methods and definitions that underpin
data collection and its interpretation, including supply chain
traceability and geographical information on sourcing. Supply chaintransparency is not about making all data available to everyone,
nor about widely disclosing competitive or proprietary information.
Data sharing can take various forms adapted and accessible to therelevant actors, especially to those that are ‘credibility influencers’,such as trusted independent monitoring organisations.
• Accountability means being responsible for what you do. Supply
chain accountability goes beyond transparency and includes othermechanisms – such as verification, audit, complaints mechanisms –that demonstrate a willingness to make oneself ready to answer for
one’s acts. This can include the recognition of errors and unforeseen
negative consequences and actions to rectify them.
• Traceability commonly refers to the ability to track the origin,production, processing history and distribution of a product.
Traceability plays a key role in supply chain management. Traceability
information usually remains in the ownership of supply chain actorsthat generate it, unless required by law, commercial agreements or
voluntarily disclosed.

Summary

Legislation in consuming countries
Consumer countries, particularly the EU and UK, are introducing “duediligence” legislation to try to break the link between cocoa production
and child labour and deforestation, either at generic level, or withspecific topics in mind such as on deforestation or child labour. The EU
has developed regulations on both deforestation as well as a broader
Due Diligence regulation. Many other European countries are also inthe process of setting up legal frameworks.
Legislation and institution in producing countries
In producing countries, there are two legal challenges; the gaps
in legislation that still need to be filled or improved upon, and thechallenges of enforcing legislation that is already in place. Additionally,
institutions need to be strengthened or implemented.
Cooperatives
Almost all efforts in cocoa reach only farmers that are already organisedin cooperatives. Most cocoa farmers, however, are not organised,and are not being reached. Strong autonomous farmer organizations
should become the bedrock of the sector. For cooperatives to play
the positive role that they could play, they must be farmer-led,professionally run, gender-equal, and accountable to their members.
Deliberative inclusion
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. Strategies for an enabling
environment must be developed and defined collaboratively at anational or sometimes even local level.
Transparency and accountability
Transparency and accountability are essential to make sustainability
efforts both credible and effective. They also provide a level playing
field for all supply chain actors, enable improved market access, andhelp increase farmer income. A first key step towards transparency &accountability is the setting up of credible national traceability systems.
Beyond covering geolocation data, these systems need to be coupled
to a variety of socioeconomic statistics, such as household composition,
income, farm gate prices paid, child labour data, etc.

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105

8 The path to		living income
in cocoa

106

For living income to become a reality for cocoa farmers, action isnecessary on three separate dimensions at the same time: good
agricultural practices, good governance policies, and good purchasing
practices. Any corporate or government effort that does not movesignificantly on all three dimensions at the same time will not be anadequate response to the challenge.

107

What is essential to stress here, is that living income will not be reachedby project-based approaches. Achieving a living income will require asystemic approach, a systemic change.

Good Agricultural Practices

Focussing on Good Agricultural Practices (GAP) has been the strategy thathas seen by far the most attention over the past two decades. For GAP to
be part of a path to living income in cocoa, there are still key issues to be
improved
Net income increase and risk reduction
Concepts for GAP should include calculations of changes of the net
income of farmers, and an analysis of the true costs (social and ecological)of the changes. These should include robust calculations on the impact of
the expected productivity increases, including transparency on increased
production costs, both for labour and resources.

The element of risk needs to be part of the economic analyses besides theimpact on net income. The prospect of a much higher net income coupledwith extreme dependence on highly volatile variables is the right way
forward. If we look at systemic change, we also need to look at the rightindicators for this change.
Strengthened farmer capacity
When GAP is part of the sustainability strategy, farmer capacity must be
strengthened. Each cocoa farmer should be supported to implement an
individual farm development plan (FDP), based on local specifics such as
soil types, elevation, local climate, and shade crops, rather than on genericapproaches and generic inputs. The concept of GAP should move beyond
technical trainings to include access to professionalized labour services
and quality farm inputs in order to increase adoption of GAP among cocoa
farmers.

All farmers should receive training in financial literacy andentrepreneurship, have access to loans and credit institutions, affordable
credit, and recommended inputs, so that they can invest in and develop
their farms. Financial inclusion mechanisms need to be developed
specifically for smallholders, and for youth and female headedhouseholds.
Agrochemicals and monoculture
GAP trainings should move away from a focus on monoculture and heavy
agrochemical use towards Integrated Pest and Soil Management (IPM)systems, where a shift from monoculture towards diversified production isnecessary, particularly towards diverse agroforestry systems.
Equality
There is an increasing focus on better-off farmers, ignoring the plight of
the lower income farmers. However, these have as much right to a living
income as any other. A top-down approach is adopted and there are few
farmer voices heard in this conversation, while gender equality is largely
side-lined in this conversation.

Good Governance Policies

108

Good governance is as important as good agricultural practices.
Governance provides the enabling environment within which a living
income can be achieved. All the items in this category require government
action of some sort. Many – if not most – also require corporate action. In
fact, the UN Guiding Principles on Business and Human Rights explicitly
state that even if governments do not fulfil their duty to protect humanrights this does not provide corporations an excuse to not fulfil their
obligations to respect human rights.

speculation on the terminal markets should be regulated to limit the roleof hedge funds and financial speculation.
Global funding
Governments in consuming countries, international organisations, anddonors need to make available significant funds to tackle farmer poverty.
Additionally, impact assessments are needed which prove that the money
is used for poverty reduction and not to increase productivity only, so that
only industry profits from low prices.

Supply management
It is a matter of high urgency that cocoa producing countries startacknowledging that supply management solutions are part and parcelof any successful living income policy. Instruments can range from theextremes of buffer stocks and national production quotas – such as
implemented in the cocoa sector for much of the 1970s and 1980s –through to more subtle tools such as rural development policies or land
reform. Even an announcement by the Ghanaian government that they
will no longer pursue a production target of 1.5 million tons would be a
step forward. As a global issue, governments should align on common
strategies to ensure transparent policies that put farmers first. These
strategies should be firmly embedded in national rural and agriculturaldevelopment strategies in cocoa producing countries that focus on bothfood sovereignty as well as on rural infrastructure47.

Representation and voice
The capacity of farming communities should be supported and enabled
to self-organise to have a bigger voice in political dialogues at the highest
levels of decision-making.

Improved global LID
Governments of cocoa producing countries should cooperate and work
towards a LID-like system in all producing countries, and work towards
linking the price of cocoa to the cost of production plus a living income
margin. This needs to be coupled with significantly increased transparency
and accountability of how public funds – including the LID – are collected
and directed to support a transformation in the cocoa sector. Supply chaintransparency is also an essential part of this.

Good Purchasing Practices

Living income in regulations
Governments in consuming nations need to make living income a key
part of any Human Rights and Environmental Due Diligence regulation,requiring time-bound action plans by corporations. Additionally,

47 Despite being agricultural powerhouses, both Côte d’Ivoire and Ghana are
net food importers. A just transition towards food sovereign agriculture isnecessary. Cash crops, such as cocoa can play a major role in enabling thistransition.

Competition law
Governments in consuming countries should review existing competition
laws where these are hindering the ability to agree on collective actions inorder to tackle farmer poverty (and other sustainability challenges.)
Rule of law
Governments in producing countries and multinationals should adhere toexisting regulations and standards in the cocoa supply chain.

The least developed of the three dimensions described here are Good
Purchasing Practices. Although they also deal with the farm gate price48
paid to farmers, purchasing practices range much wider.
Short term
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 long-term processes – such as diversified income,higher productivity, or a better rural infrastructure – have come to pass.

48 The European Commission recently released a report where increasing cocoa
farm-gate prices is mentioned as the first among the key solutions to reducepoverty among cocoa farmers. A decent and acceptable price is also mentioned as a “necessary but not a sufficient condition to address child labour”.

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Individual company action
Most Good Purchasing Practices do not require collective action, nor dothey require a long development process; they can be implemented ona relatively short term, by individual corporate actors. For example, theTony Open Chain and Colruyt Living Income Intervention are showing how
good purchasing practices in the cocoa sector can lead to better prices forcocoa farmers.
Risk and reward
There are two key objectives of Good Purchasing Practices. The first is toattempt to redress the unequal distribution of risks, where at present farmers
bear virtually all the risks. The second is to redress the unequal distributionof rewards, of which at present farmers receive far too little.
Time bound action plans
Every company should develop a time-bound living income action
plan that includes purchasing practices – explicitly addressing farm
gate pricing, including a living income minimum price. Methods need
to be developed to ensure that extra price payments are redistributed
throughout the community, so they can help the most vulnerable, such as
women.
Long term, asymmetric contracts
Companies generally know how much cocoa they will need on a yearto-year basis. In order to reduce the risk for farmers, buying companies
should engage in long-term relationships and contracts with their
suppliers, defining specifically that companies will commit to volumes
at specific price points for several years, and outlining the rights of the
farmer/cooperative, so that sellers are less at risk from season to season.
This also would open the possibility of spreading payment throughout theyear, creating a healthier cashflow situation for households.
Procurement
Too often, sustainability and procurement are seen as two separate
divisions of a company, leading to the dichotomy of farmers being
engaged in poverty alleviation programmes, whilst the company
procurement divisions are aggressively downwardly negotiating the pricethey are paying. The internal incentives for purchasing departments need
to be carefully looked at.
Regulation
It must be mandatory for all companies to ensure they are notundercutting the farmers, that they have put in place time bound living

income strategies that include purchasing practices, living income
reference prices, and asymmetric contracts. Time and again, company
representatives argue that the reason they are putting pressure on prices
is because it is legal. As such, any credible due diligence regulation must
include requirements to achieve a living income.
Beyond procurement practices
Beyond procurement practices, companies need to critically review
business functions and resource streams such as shareholder payouts, stock buybacks, tax avoidance/evasion practices, and marketing
expenditures. As long as a significant part of their suppliers are living
well below a living income, any such individual enrichment practices are
entirely immoral.

Purchasing and Governance first

All three dimensions – Good Agricultural Practices, Good Governance
Policies, and Good Purchasing Practices – are needed to address thechallenge of living income effectively. However, not all three dimensions
have an equal status. Good Agricultural Practices are only a worthwhile
strategy if cocoa is sufficiently remunerative.
Historically, increases in scale and gains in efficiency have not led to better
livelihoods for farmers, although they tend to benefit supply chain actors
further downstream. Better agricultural practices might be making it easier
to feed the world, they are not helping to better feed the farmer. Withouta change in the power structures first, GAP will lead to higher profits fordownstream stakeholders, not for farmers.
As such, the first step that needs to be taken to tackle the challenge ofliving income is for corporations to start taking major steps forward on theGood Purchasing Practices. In a similar manner, we need governments(and corporations) making serious work on Good Governance Policies.
Only when both the responsibilities of corporations and governments
are properly being met does it become fair to ask farmers to invest effort
and money in improving their productivity. The burden to first move lies
squarely with the companies and the governments in the cocoa sector.
We cannot ask the poorest and most vulnerable link to take the biggest
risks, with the least guarantee for reward. In that regard, the anti-poverty
approaches in the cocoa sector have had exactly the wrong chronology
for the past two decades. With an unsurprising, although unfortunate,outcome: they have failed.

111

Summary

112

Living income is a right, and should be regulated
Living income is a human right, and a necessary precondition for all theother challenges in the cocoa sector to be properly addressed. And
though it has become an accepted goal for the cocoa sector, there
is a lack of concrete and time-bound commitments towards a living
income, either by individual companies, by governments, or by sectorwide initiatives. Living income must become mandatory, and therefore
enshrined in the due diligence regulations being drafted presently.
Changed business model
In all this, there is very little conversation about the industry’s businessmodel, including about how they set the prices they pay. As a result,most farmers are still not earning a living income, and not a single
stakeholder group is currently doing what they should be doing toensure farmers achieve a living income.

The Cocoa Solution Tree

CLMRS

Women's
Empowerment

Start with governance and purchasing practices
For living income to become a reality for cocoa farmers, action isnecessary on three separate dimensions at the same time: good
agricultural practices, good governance policies, and good purchasing
practices. Any corporate or government effort that does not movesignificantly on all three dimensions at the same time will not be anadequate response to the challenge. However, not all three dimensions
have an equal status. Good Agricultural Practices are only a worthwhile
strategy if cocoa is sufficiently remunerative. Only when both the
responsibilities of corporations and governments are properly being
met does it become fair to ask farmers to invest effort and money in
improving their productivity. The burden to first move lies squarely withthe companies and the governments in the cocoa sector.

Community
Development

Traceability

Human
RightsEnvironmental
Protection

Agroforestry

Land and
Tree Tenure

LivingIncomeAccess to Finance& Infrastructure

Higher Farm
Gate Prices

De-risked Farmer
Contracts

Farmer Organisation& Empowerment

Good Agricultural
Practices

Transparency &Accountability

Holistic LandscapeApproaches

Bottom-up
Inclusion

Mandatory
Regulations

113

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115

9. Key recommendations

Key recommendations
For all stakeholders

116• Scale up efforts significantly, to reflect the size and urgency of the
problem.
• Implement a sector wide commitment to living income.
• Implement a global moratorium on deforestation.
• Ensure that the enabling environment of purchasing practices andgovernance policies are strongly improved before good agricultural
practices are emphasised.
• Involve farmers and civil society as co-decision makers in all
sustainability collaborations through inclusive and deliberative
processes.
• Develop effective transparency and accountability mechanisms.
• Support a shift from monoculture to diversified production.
• Support capacity of farming communities to self-organise and have abigger voice.
• Ensure that all sustainability approaches are tailored to include womenand youth.

For companies• Develop a time-bound living income action plan that includes
purchasing practices.
• Commit to a living income reference price.
• Engage farmers in long-term asymmetric contracts.
• Implement transparent and effective CLMRSs to cover the entire
supply chain.
• Implement full supply chain traceability to farm level.
• Implement holistic environmental and human rights Due Diligencepolicies.
• Full supply chain transparency on sustainability payments, including
Living Income Differentials, country differentials and certification
premiums.

For voluntary standards• Make Living Income and the payment of a living income reference
price a key requirement.
• Strengthen and enforce the Trader Codes of Conduct, requiring as
much change from multinationals as cocoa farmers need to.

For governments of cocoa consuming nations• Enshrine living income as a key part of any Human Rights andEnvironmental Due Diligence regulation, requiring time-bound actionplans by corporations• Support representation of civil society and farmers• Provide sustained financial and technical support to build producing
country capacity, and to tackle farmer poverty, and to facilitate
appropriate implementation of mandatory human rights andenvironmental due diligence.

For governments of cocoa producing countries• Cooperate and work towards a LID, decoupling the price of cocoafrom the commodity market to reflect the costs of production –including a living income.
• Implement supply management solutions.
• Significantly increase transparency and accountability of how publicfunds are collected spent.
• Develop and implement national cocoa monitoring and traceability
systems on both deforestation and child labour• Enforce protection of remaining forests.
• Embed cocoa plans in national rural and agricultural development
strategies that focus on food sovereignty and rural infrastructure.
• Disclose annually the tonnages of cocoa sold, price received for cocoa
sales, including all differentials, and price setup of farm gate price vs.
world market price.

117

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119

10. Colophon and  justification

Justification of tables and figures
Effects of higher yield on net income, page 15
Effects of higher yield on net income Côte d’Ivoire, page 23
120

Farm size
GPS reported polygon mapping results of the questionnaire
Estimates on workload:
350 Kg/ha: 50 labour days – median
550 kg/ha: 75 - mean
800 kg/ha: 150
1000 kg/ha: 200

Available labour days
365 days - 104 weekend days - 20 sick days - 11 days off = 230 working
days per person. These are 19 labour days per month.
Input costs per hectare
These are set higher than in existing studies due to the exploding prices
for fertiliser and pesticides and the often-missing costs for seedling forthe necessary replanting specifically if farmer should achieve permanently
higher yields at US$100 for 350 kg/ha, US$250 for 550 kg/ha, US$500 for
800 kg/ha, US$750 for 1000 kg/ha, US$11 per day as a living wage forCôte d’Ivoire, US$13,5 per day as a living wage for Ghana
Wages for hired labour
The latest calculation of a living wage in Côte d’Ivoire (see https://www.
globallivingwage.org/living-wage-reference-value-rural-cote-divoire/.)came up to XOF 137,545, which is US$ 211 per month. (conversion rate
September 2022), divided through 19 labour days add up to a daily wage
rate of US$11.
For Ghana the latest calculation of a living wage was done in spring 2022.
A living wage in a semi urban banana producing area was GHC 1,841(USD 257) per month; (see https://www.globallivingwage.org/wp-content/
uploads/2018/04/Updatereport_Ghana_2022_29032022final.pdf.)
Again based on 19 labour days per month. US$257 divided through 19
labour days result in a daily wage rate of US$13,5.

These calculations are based on publicly available data and datasubmitted for the questionnaire. The authors welcome any corrections andchallenge all actors of the cocoa sector to be much more forthcoming withpublic data.

Traders and Processors: Used Cocoa page 79(1) using ICCO conversion rates: Cocoa butter 1.33, Cocoa paste/liquor
1.25, Cocoa Powder and cocoa cake 1.18
(2) fiscal year 2020/21(3) Estimates by the authors(4) Sucden reported to souce 450,000 - -600,000 tonnes per year, we took
the middle of that range(5) 100% of the grinded beans are traceable to cooperative level and 45%of the grinded beans are traceable to farm level, but due to additional
volumes needed to produce chocolate the percentage is reduced torespectively 87% and 38%”(8) only for Côte d'Ivoire and Ghana / only direct bean sourcing

Chocolate Brands: Used Cocoa page 81(1) using ICCO conversion rates: Cocoa butter 1.33, Cocoa paste/liquor
1.25, Cocoa Powder and cocoa cake 1.18
(2) fiscal year 2020/21(6) Hersheys reported to souce 200,000 - 240,000 tonnes per year, we
took the middle of that range(7) Estimates by the authors(9) both certification schemes like Rainforest Alliance and Fairtrade as wellas cocoa supplier standards and programs such as Cocoa Horizon.
(10) Since 2020 Hershey has upheld its commitment to Source
independently verified cocoa (by volume) through: Fair Trade USA,
Rainforest Alliance and verified supplier programs(11) Based on 78.5% farm polygon mapping in program supply chain
covering 75% of cocoa

121Colophon

Citation: Fountain, Antonie C. and Hütz-Adams, Friedel (2022):
2022 Cocoa Barometer
Text: Antonie C. Fountain (Voice Network) and Friedel Hütz-Adams(Südwind Institut)
122

Additional contributors: Abdulahi Aliyu (Rikolto), Adeline Dontenville(EFI), Bart van Besien (Oxfam Belgium), Boukje Theeuwes (Solidaridad
Europe), Daniel Vallauri (WWF France), Duncan Brack (Independent),
Gert van der Bijl (Solidaridad Europe), Evelyn Bahn (INKOTA-netzwerk),
Hammond Mensah (Solidaridad West Africa), Jesse Arnon (Oxfam Novib),
Julian Oram (Mighty Earth), Juliane Bing (INKOTA-netzwerk), Kwame
Obeng-Hinneh (Tropenbos Ghana), Maaike Schoonejans (Solidaridad
Europe), Maartje de Graaf (Tropenbos International), Monica Burns(Freedom United), Pauline Zei (Inades Formation), Sarah Vaes (Oxfam
Belgium), Silvie Lang (Public Eye), Tomoko Shiroki (ACE), Uwe Gneiting(Oxfam America), Yuko Kawamura (ACE).
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 2022 Cocoa Barometer.
The final responsibility for the content and the views expressed in thispublication lies solely with the authors.
The 2022 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.
Inclusion and southern voice in the 2022 Cocoa Barometer
Consultation workshops were held in Abidjan and Accra in February 2022.
These workshops formed the basis of the content of Barometer, before thedevelopment of the structure of the Barometer could begin. Furthermore,
CSOs in Ghana and Cote d’Ivoire were actively invited to be part of theBarometer Consortium. These steps were taken to ensure the voice of the
Global South was at the table from the very first stages of developmentof the Barometer. However, lessons were also learnt, and for the next
Barometer we will include longer responses times and more space in thebudget to ensure interim versions of this paper will also be available in therelevant languages besides English.

Copyright

The 2022 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
Design: Roelant Meijer, www.tegenwind.eu
Published by the Cocoa Barometer Consortium, administered by the
VOICE Network.
The Cocoa Barometer Consortium consists of ABVV/Horval, Action
against Child Exploitation (ACE), Be Slavery Free, EcoCare, European
Federation of Food, Agriculture and Tourism Trade Unions (EFFAT),
Fair World Project, Fern, Freedom United, Green America, IDEF, Inades
Formation, INKOTA-netzwerk, Global Labor Justice/International Labor
Rights Forum, Mighty Earth, Oxfam America, Oxfam België/Belgique,Oxfam Ghana, Oxfam Novib, Public Eye, Rikolto, Roscidet, SEND Ghana,
Solidaridad, Südwind Institut, Tropenbos International, Tropenbos Ghana,
WWF France
Contact
www.cocoabarometer.org
Requests for information can be addressed to:Antonie Fountain - VOICE Network
antonie@voicenetwork.cc

With financial support from
Belgium Partner in Development
Supported by GIZ from BMZ funds

The publishers are solely responsible for the content of this publication;
the positions presented here do not reflect the position of the funding
agencies, and donors had no influence on the content.

123

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125

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