"Opec for Cocoa" producers want minimum price | Economy | '
Ghana and the Ivory Coast (Côte d'Ivoire) are the largest cocoa producers in the world – around two-thirds of the world's cocoa beans come from here. Together, the two West African countries are now trying to impose a minimum price for cocoa. They are asking $ 2600 per ton from the coming sales season.
International buyers generally agreed to that during a meeting in Ghana's capital Accra last week, but details need to be clarified, said Joseph Boahen Aidoo, head of the Ghana Cocoa Board, a government-led organization that protects farmers from low prices should. The meeting was "historic," according to Aidoo, "this is the first time that cocoa producers and buyers have come together to discuss the price."
Poverty and child labor
So far, the cocoa price is determined daily at the commodity exchanges in London and New York. "It does not matter what the farmers have to pay for their plantations, or whether they earn enough money to have three meals a day and send their children to school – the price is made by the stock market," says Friedel Hütz Adams, research associate at the Southwind Institute for Economics and Ecumenism in Bonn, and lead author of a study on the cocoa price, published with the German Society for International Cooperation (GIZ).
Most cocoa farmers and their families live below the $ 2 per day absolute poverty line set by the World Bank, even says the International Cocoa Initiative (ICI), a Swiss foundation funded by chocolate companies to protect children's rights. Child labor is widespread in West African cocoa farms. "To reduce labor costs, parents have their children work in the fields instead of sending them to school," writes ICI.
But why do farmers even plant cocoa if they can not live on it? Because they can not easily change their crops, says Hütz-Adams of Südwind. Cocoa cultivation requires years of preparation: fields must be cleared, seedlings planted and raised. "After five to six years, the newer varieties bring the optimal harvest, then a plantation can be operated for 20 to 25 years." If the cocoa price falls, farmers can not just grow something else. The only hope is that the price will recover.
Minimum price too low?
A minimum price of 2600 dollars per ton of cocoa Ghana and the Ivory Coast want to enforce. That's not a big leap. Before the announcement, a tonne cost $ 2,200. "In recent years, the price was more at $ 2000, but sometimes at 3000," says Hütz-Adams of Südwind. "Adjusted for inflation, it was well over $ 4,000 in most decades of the previous century."
The planned minimum price is not very high. "It will not be enough to sustainably reduce poverty," says the researcher. "But it's the first attempt by governments to experiment with a kind of cocoa opec and set down a minimum hedge."
Because the fluctuations on the cocoa market are often extreme. It is sufficient that a good harvest and a slight oversupply loom to send the cocoa price by a third or more in the basement. That's because of the structures of the market.
Only six percent for the farmers
At $ 100 billion, the global market for chocolate products is estimated, but only six billion dollars go to the producers of cocoa beans. The millions of small farmers who live from hand to mouth face a handful of large companies that buy, process and market the cocoa beans. The complete value added takes place outside the producer countries. Chocolate companies can compensate for bottlenecks through reserves or change their recipes.
The farmers, on the other hand, have no leeway. Unlike rice or wheat, they can not even feed themselves with their crops. They have to sell, otherwise they have nothing.
Actually, everything could be very simple – if chocolate was only slightly more expensive, the poverty problem would be solved. At least one should think, if Friedel Hütz-Adams calculates that the price of a table full chocolate chocolate currently only about four cents arrive at the farmers. Four cents more would double their income.
If cocoa farmers in Ghana received only 50 percent more money, child labor in the country could be completely stopped, according to a study published in June by the US Arkansas University. Even a sales price that is only three percent higher would already have advantages, because then, at least for the most dangerous jobs, such as machetes, compensation for child labor could be paid.
Massive price pressure
"In fact, only a few cents would make a significant difference," says Hütz-Adams. "At the same time, there is a massive price pressure, especially here in Germany, and the individual companies say: If the competition does not follow, we can not enforce this alone on the market."
A fiercely contested market, where supermarkets are paying close attention to pennies in the price of their competitors, and at the same time trying to lure customers into their stores with cheaper chocolate, leaves no room for gifts.
Chocolate manufacturers contacted by ‘ were previously unavailable for comment. Hütz-Adams, who also sits on the Advisory Board of the retail chain Rewe, but has the impression that many companies have nothing against a state-fixed minimum price for cocoa, if it applies to all.
Laws instead of fair trade?
Even chocolate with Fairtrade seal brings according to the Südwind experts no fundamental solution. "The minimum price of Fairtrade was previously at 2000 dollars per ton," said Hütz-Adams. Even if an increase is now planned – "the price is not enough to bring farmers everywhere out of poverty".
Fairtrade seals and other certificates, industry commitments – all this has not changed in recent decades that cocoa farmers around the world live in poverty. Südwind expert Hütz-Adams is therefore convinced that it is time for legal pressure. Companies should be required by law to ensure respect for human rights in their value chains.
This is also what the United Nations Guidelines of 2011 provide, as demanded by the industrialized countries organization OECD. "The Federal Government has unfortunately not managed to make it a law," says Hütz-Adams. "Even at the EU level, we have no legal obligation."
Meanwhile, the federal government has submitted at least one bill, which is, however, criticized by companies. The aim is to enforce the goals of the "National Action Plan on Business and Human Rights", which has hitherto been voluntary.
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