Consumer awareness of the impact of cocoa production from a social and environmental perspective at the small farmer level are requiring actors across the entire cocoa supply chain to change their business practices. These changes are being embraced by all actors in the supply chain and are being led by the World Cocoa Federation.

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Between five and six million farmers worldwide produce an annual cocoa crop valued at around $US 5 billion. Over 70 percent of the global output comes from farmers with small land holdings in Africa. Production is concentrated in West Africa, where Cote d'Ivoire and Ghana derive a large part of their export revenues from cocoa, 25 percent and 32 percent respectively. Southeast Asia and Latin America account for smaller but significant portions of production. Demand for cocoa has seen an average annual increase of 2.6 percent over the last decade, stimulated in part by increasing demand from within developing countries themselves.  The majority of cocoa is used in chocolate production so the growing demand for higher cocoa-content dark chocolate is a welcome development for the sector. Consumer awareness of the potential cancer-fighting effects of antioxidants naturally contained in cocoa beans has also been good news for chocolate manufacturers.  There is also rising consumer demand for labeling chocolate with the country of origin.

Greater consumer awareness of the environmental consequences of food production means a growing demand for organic or sustainably produced cocoa products. The cocoa bean grows best in an agro-forestry system of cocoa trees shaded by the upper canopy of tropical rainforests.  Although this type of farming is more supportive of biodiversity than mono-crop systems, the extent is dependant on how well the system is managed as well as the health of surrounding natural habitat. Indeed, some farmers expand into natural forest in order to increase production, further jeopardizing the conditions needed for the cocoa trees to grow.

Similarly, the cocoa sector’s labor practices have received public attention, particularly since the international media began reporting evidence of child labor in West Africa during the early 2000s.  There is most likely latent demand for cocoa that is certified with regard to labor practices. However, given that the cocoa supply chain involves millions of smallholders in remote areas and many intermediaries, industry-wide product certification is proving problematic.

However, some coordinated efforts have begun to address these issues.  Nearly 60 member companies make up the World Cocoa Foundation (WCF) which designs worldwide programs that boost farm incomes, strengthens communities by encouraging safe, responsible labor practices and protects the environment.  Multinational companies have also responded on their own. Mars’ Cocoa Sustainability program, for example, promotes a responsible approach to cocoa production, carried out in coordination with research organizations, environmental groups, foundations and donors, so that the community and environment in which it is produced can thrive. In addition, Fair Trade certification partnerships between companies and smallholders provide the later a guaranteed “fair” price, a stake in the business and a share of profits, while promoting environmentally sustainable farming practices.  And although organic chocolate is still a small portion of the market, growing consumer preference for low-impact farming techniques are driving up sales.

Cocoa topic editor: Matthew Edwardsen