cocoa
barometer
Executive Summary

2022

2022 Cocoa Barometer Executive Summary

The Cocoa Problem Tree

Child Labour& Human Trafficking

Poverty &Malnutrition

Deforestation
Loss of& Degradation Biodiversity

2

3
Lack of Education& Healthcare

Labour Rights
Violations & Unsafe
Working Conditions

Climate Change

LivingIncomeIntroduction

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
the same issues. In fact, additionally challenges have been added over theyears.
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
and made worse by cocoa-driven deforestation, and agrochemical use iscausing 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 andhazardous labour. Gender inequality raises barriers for women, both asrightsholders and as agents for change.
The two branches of the cocoa problem tree - environmental protection
and human 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 businessHigh Use ofAgrochemicals

Environmental
Protection

Human
RightsLow Farm Gate Prices

Rising Costs of Living

Low Yields

Rising Production Costs

High Risks

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.
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 forhigher prices have so far not been answered. Instead, approaches havebeen pursued focussing on what the farmer needs to do differently, suchas higher yields and diversified production.

Cote d’Ivoire

Research from this Barometer shows that the favoured approaches so far
to raising farmer poverty are not going to bridge the income gap; higher
yields do not necessarily lead to increased net income but do lead togreater risks for farmers. Without significantly higher farm gate prices,sustainability in the cocoa sector is a pipe dream.
4

Effects of higher yield on net income (based on kiloprice $ 1,50)
farm sizes based on current GPS measurements: 3ha CIV, 2ha GHA+ 20 %The sector change that is needed cannot just come through better
farming; a key approach needs to be to look at the enabling environmentof the cocoa sector. Systemic changes and improvement are necessary ingovernance policies and in purchasing practices. Only when these are inplace is there a business case for thriving farmers.

living income+ 20 %In order for cocoa to truly become sustainable – where cocoa farming
households are able to earn a living income, where nature is protected
and flourishing, and where all rights (including those of children, women,
and other marginalised groups) are safeguarded – real change isnecessary. Systemic change.
In that light, the development of supply chain legislation in cocoa
consuming nations is a very positive development, although their level
ambition as well as the way they will be implemented will determine
whether they will have the desired outcome.

Ghana– 20 %

living income

Côte d’Ivoire

Ghana– 20 %
1000

800

kg/ha

550

350

kg/ha

150

–50
80 % 75200kg/ha
labour
days

50

1000

– 60 %

kg/ha– 80 %
1000

800

kg/ha

kg/ha

kg/ha

550
75kg/ha

–350
60 %

1000

800

350

kg/ha

550

kg/ha

kg/ha

kg/ha
350

5

– 40 %

kg/ha

kg/ha

50

800

– 40 %
550

kg/ha

5

150

200

labour dayskg/ha
75

150

200

50

labour days

75

150

200

labour days

Cote d’Ivoire
Ghana
Effects of higher
yield on net income Côte d’Ivoire (increasing kiloprice)
farm sizes based on current GPS measurements: 3ha CIV, 2ha GHA

Living Income

Living Income is a human right in and of itself, and also the necessary
precondition for all the other challenges in the cocoa sector; farmer
poverty is a driver of issues such as deforestation, child labour, and genderinequality. Living income is the minimum level of decency for a household,as such, it should be the starting point, not a finish line. Still, most farmers
are very far from earning a living income, and not even moving towards it.

price increace toprice increace to

$2,25

$3,0

$1,5

+ 20 %
living income

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. There is an unspoken
assumption that farmers of commodities are expected by default to bepoor, although many companies report record profits.

– 40 %– 60 %
350 kg/ha

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

GenderMany of the households that have been identified as ‘high risk’ for poverty
are headed by females. To tackle this, women need have the same rights
and opportunities as their male counterparts. Women do not automaticallybenefit from higher incomes. Therefore, every single programme and– 20 %

50 75

150

200

50 75

150

200

50 75

150

200

labour days

– 80 %

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

6

Productivity, labour, farm size
Increasing productivity is necessary but insufficient to raise net income.
Often the resources (labour and capital) to invest in higher productivity
are not available or affordable. The added costs of hired labour andinputs 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; the larger the farm, the morelabour is necessary, while cocoa households have a finite amount oflabour available. Increasing productivity does raise the risk for farmers,
as investments are done up front. Issues of costs, 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 forresilience.
Price
Paying a higher 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 arenecessary first steps to ensure the farm gate price goes up.

Environmental Protection

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 the Congo Basin are allunder pressure from encroaching cocoa farms. Deforestation causes lossof 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 take smallholders 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
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.
Agrochemicals
The use of agrochemicals is pushed heavily by industry to increase
productivity, however so far often with no net income increase. Farmers
run a risk of not being able to recover their investments, however.
Furthermore, health risks through exposure are high, especially to womenand children. The environmental harm is significant as well.
Agroforestry
Agroforestry is an important part of any sustainable cocoa production
landscape. Low adoption and tree survival rates as well as a lack ofcommon 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 andtransparent data sharing on deforestation hotspots, as well as regulationin both producing and consuming countries are part of a tapestry of
approaches needed to start tackling the environmental challenges incocoa. 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.

Human Rights

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.
Child labour
Understanding what does and does not constitute child labour is an
important first step in this conversation. However, there are 1.5 million
children in Côte d’Ivoire and Ghana on cocoa farms that are performing
age-inappropriate labour, most involved in hazardous labour, which also
makes it the Worst Forms of Child Labour.

7

8

On average, children are involved in 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 incocoa production, the absolute number of children involved in (the worst
forms of) child labour is still growing.

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.

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. 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 thangreenwashing and empty words. These increased ambitions must be
coupled with mandatory regulations.

Furthermore, representation matters. All too often, the conversation isabout farmers, without having farmers at the table. It is about African or
Latin American interests, without these interests being represented by
African or Latin American organisations and governments.

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.
Poverty is one of the driving forces for a long list of human rights violations
and is a key driver for child labour in the cocoa supply. Without ensuring
a living income for cocoa growing households, tackling the issue of childlabour becomes significantly harder to tackle.
Gender equality
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 the womenin cocoa growing communities. Gender agnostic interventions might evenlead to greater inequality between men and women.

Market Developments

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.

Production / Imports
Cocoa production in 1,000 tonnes 2020/21 (forecast)
Domestic imports of cocoa in 1,000 tonnes 2020/121
Source: ICCO 2022, Table 3,9177

Canada2,460

79
1,067 Rest ofEurope376

Americas811

62

196 Rest of Africa
3,665

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.

375

Ecuador

969
355

Rest of
Americas220

Brasil2,130

Côte d’Ivoire

689

Ghana

Rest ofAsia

703

Australia

112 Africa

USA

178

Turkey

108

266
180

Indonesia

86

Rest of Asia

120

China

Japan

280 Nigeria

290 Cameroon

Racism, representation, and decolonisation9

Traders and Processors: Used Cocoa 2021

Chocolate Brands: Used Cocoa 20211

61%

38%

59% 75%
1,019 OFI

400 Mondelēz International7,11

30% 40%1051%988 Barry Callebaut2

49%

66%

391 Nestlé
44% 59%875 Cargill3
25%

52%

365 Mars
46% 68%800 ECOM
50%

24%

220 Hersheys6,7
96% 100%

525 Sucden2,4
59% 100%
328 Touton

208 Ferrero2,964%
145 Lindt und Sprüngli

40%
200 Blommer/Fuji Group
76%

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

102 ETG
38% 87%80 Cemoi

5

Traceable to farm / to coop / used cocoa 2021(1)In
thousandsof metric rates:
tonnes1) using
ICCO conversion
Cocoa butter 1.33, Cocoa paste/liquor 1.25, Cocoa Powder andcocoa cake 1.18
2) 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
Companies(5) 100% of the grinded beans are traceable to cooperative level and 45% of the grinded beans

The enormous market concentration of cocoa trader and grinder puts aburden ofresponsibility
on87%
theandleading
percentage
is reduced
to respectively
38%” companies. An important part ofthat responsibility is to ensure full traceability throughout the supply chain.
are traceable to farm level, but due to additional volumes needed to produce chocolate the

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, because they
concentrate their procurement on sources that are more transparent,
leaving the untraceable cocoa to other market actors.
Supply management
Globally, production of cocoa continues to increase, primarily driven by
growth in Côte d’Ivôire and Latin America. Despite chocolate and cocoa
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 to increasesustainability in the cocoa sector.

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12

Standards
Even though at least a third, perhaps even more than half, of all the global
cocoa production is grown under a certification label or an own company
sustainability label, major problems persist; chocolate companies andretailers tend to look for the cheapest label, neglecting the potential
negative effects of this price pressure. Claiming sustainability off the backof a certification system is misleading. However, the terms “certified cocoa”
and “sustainable cocoa” are still often – wrongly – used interchangeably.

Enabling Environment

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 in theprocess of setting up legal frameworks.
Legislation and institution in producing countries
In producing countries, there are two legal challenges; the gaps inlegislation that still need to be filled or improved upon, and the challenges
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 organised incooperatives. Most cocoa farmers, however, are not organised, and are notbeing reached. Strong autonomous farmer organizations should become
the bedrock of the sector. For cooperatives to play the positive role thatthey could play, they must be farmer-led, professionally run, gender-equal,
and accountable to their members.
Deliberative inclusion
Strategies for an enabling environment must be developed and definedcollaboratively at a national and sometimes local level.
Transparency and accountability
Transparency and accountability are essential to make sustainability
efforts both credible and effective. 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.

The Path to Living Income in Cocoa

Living income is a right, and should be regulated
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 to ensure farmers
achieve a living income.
Start with governance and purchasing practices
Action is necessary on three separate dimensions at the same time: good
agricultural practices, good governance policies, and good purchasing
practices. However, not all three dimensions have an equal status. Good
Agricultural Practices are only a worthwhile strategy if cocoa is sufficiently
remunerative. The burden to first move lies squarely with the companies
and the governments in the cocoa sector.

13Key recommendations
For all stakeholders

14• 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.

Colophon:
This is the executive summary of the 2022 Cocoa Barometer, which can befound at www.cocoabarometer.org

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www.cocoabarometer.org