It's the Pricing, Stupid
Once again, on October 18th, the CLCCG stakeholders group met at the US Department of Labor to consider the persistent intractability of child labor in cocoa. (CLCCG is the Child Labor in Cocoa Coordinating Group. Don’t feel bad. I have to look it up every time). Some 22 years on since the Harkin-Engel Protocol, a voluntary public-private agreement to eliminate the worst forms of child labor in cocoa plantations, deadlines have been missed over and over again, and the price of cocoa crashed in 2016/2017 because of over-production encouraged by the cocoa industry as a painless way of increasing farmer income without actually paying more. Deforestation in Ghana and Côte d’Ivoire continues apace. The absolute number of child slaves has increased, because of family destitution. The governments of Ghana and Côte d’Ivoire have instituted various measures to take more children out of child labor and send them to school, but all in all, efforts to make cocoa farmers less poor have been woefully ineffective.
Just to give an indication of the scale of the problem, new research indicates that the average farmer makes about a third of a living income from cocoa farming in Côte d’Ivoire. Let that one sink in.
Some technical information: the world market cocoa price fluctuates according to trade price in global stock markets. Farm-gate price - the money the farmer actually receives - is a percentage of the world market price, about 70% in Ghana and about 60% in Côte d’Ivoire. Côte d’Ivoire and Ghana pre-sell part of the cocoa harvest through cocoa marketing boards the year before. But when the world market price craters, the farm-gate price is adjusted mid-year, at least in Côte d’Ivoire. Ghana held the line on the agreed farm-gate price, basically by subsidizing the cocoa plantations with funds taken from other badly needed things. How long Ghana can continue to do this is an open question. Even with the subsidies, however, cocoa farmers are not making enough to live on.
Meanwhile, the cocoa companies are contending with steady pressure from retailers (and consumers) who want to see lower prices. The fact that the raw material costs less than it did has brought in about $4.7 billion dollars more to the cocoa companies than the year before the crash (Cocoa Barometer 2018). Money spent on sustainability programs basically amounts to a rounding error. Everyone is doing extremely well, except for the farmers and hired laborers producing the cocoa, and the governments scrambling to remedy the social evils proceeding from the systematic plundering of their primary resource.
The cocoa industry has been painfully slow to come to the realization that more may be required of them. More money. Business tends to have an ingrained thought pattern of seeking the win-win, along with a very blinkered and short-term view. As Charity Ryerson at Corporate Accountability Lab has pointed out, sustainability suggests one thing to the public - respect and decent treatment for labor and care for the environment - while signifying something entirely different to industry - a steady supply (Empty Promises: The Failure of Voluntary Corporate Social Responsibility Initiatives to Improve Farmer Incomes in the Ivorian Cocoa Sector, July 2019). Emphasizing training and increasing production as a way of supporting farmer income while ensuring a steady supply of cocoa was not the win-win it appeared to be. In the aftermath of the crash, stakeholders have come to the realization that some mechanism of getting more money into farmers’ pockets must be found.
Reid Maki of the Child Labor Coalition tried to get specifics from the governments on how the farm-gate price might be increased. Sylvie Yao, of the Office of the First Lady of Côte d’Ivoire, mentioned premiums on top of the international set price that would be passed on to the producer. But as the Honorable Ignatius Baffour-Awuah, Ghanaian Minister of Employment and Labor Relations, pointed out, some cocoa farmers are in fact urban people, who hire migrant labor sporadically as needed throughout the year to do the labor on the farm and bring in the harvest. Ameliorating the lives of migrant laborers and far-flung smallholders is not necessarily going to be solved by an increase in the farm-gate price, which is merely a first step. But it is a critical one, given that both governments are starved of funds.
Moussa Sawadogo of the SCINPA Cocoa Farmers Cooperative outlined a number of initiatives to fight child labor and find durable solutions, including building classroom capacity, registering births, IT equipment to print birth certificates, scholarships for women to train them in artisanal chocolate processing and poultry farming to increase household income, repairing wells and bridges and roads. Like other representatives from Côte d’Ivoire and Ghana, Sawadogo was at pains to urge the chocolate industry and USDOL not to step away from the problem after 2020 (the final deadline provided for in Harkin-Engel) and continue to help the cocoa-producing countries fight child labor and support child protection. Jaques Bérard of USDOL affirmed that support will be ongoing post-2020, given that the problems have not been solved.
Andrews Addoquaye Tagoe of the Agricultural Workers Union of Ghana discussed applying the Torkor model (originally developed to combat child labor in inland fishing) to cocoa-producing areas, empowering community systems to respond to child labor. As of 2012, the union has included cocoa farmers as union members, and they have organized cooperatives to ensure standards for decent work. However, Tagoe conceded that the child labor problem is insidious. “When you take one child out of child labor, another child will come.” Economic structures must change.
The Torkor Model proposes a child labor-free zone, which is not synonymous with zero child labor, but which sets up community systems to get to zero. In an informal discussion group later, Tomoko Shiroki, managing director of ACE Japan, suggested tariffs on child labor-produced cocoa versus zero tariffs on cocoa produced in a child labor-free zone might actually provide a more accurate market signal on how much child labor-produced cocoa actually costs West African countries.
Besides broad agreement that the price of cocoa must rise, discussions emphasized the importance of coordination of NGO efforts with government and local community. Paul Ntim of the Ghana COCOBOD voiced frustration with the many disparate NGO projects that operate in a silo and fail to take into account how things are done on a local level. Minister Ignatius Baffour-Awuah soberly pointed out that the child labor-free zones represent a tiny percentage of cocoa-producing areas in Ghana, so small they’re not really indicative. They must be scaled up.
What will that take? Money.
After the meeting, I wandered over to the National Gallery of Art and found myself in 18th century British painting. So many serenely smiling pink-cheeked people, their exquisite clothing telegraphing wealth and power. This is where it all began – the infernal economic unfairness, the ideology of extraction. Wangari Maathai identified under-payment for Africa’s resources as the root of poverty on the continent. We do it, because we can.
Halloween is in a couple of days – an orgy of child-like dress-up and over-consumption of chocolate. Obliviousness is not innocence.
Do buy chocolate for Halloween, but also make sure it’s certified child labor-free.