Your chocolate is about to get more expensive. Here’s why that’s a good thing.
Even though consumers might start paying a premium for their favorite snack, it’s not all bad news.
Top players in the cocoa production world have banded together to create a chocolate cartel, informally dubbed as COPEC. Two countries in West Africa, Ivory Coast and Ghana, produce 60% of the world’s cocoa, the main ingredient in chocolate. Despite their disproportionate fraction of the market, of the $100 billion annual chocolate market, the African Development Bank estimates the continent keeps just $5 billion.
These two countries are now hoping to change that. The cocoa cartel would use their control of the market to leverage higher prices when selling their product, and in turn, increase wages for cocoa farmers.
Although there were several proposals on how to best raise prices, it appears the countries have settled on charging an extra $400 per metric ton of cocoa, according to the Wall Street Journal. As a result, it will now cost a little bit more for Hershey to make every chocolate bar, amounting to a 16% increase in the price of chocolate for the consumer.
Yes, this might make a dent in your sweets budget, but even big names in the candy business seem to be on board with the change.
Jeff Beckman, Hershey’s spokesman, stated, “…we have long supported initiatives that improve the livelihoods of farmers. Cocoa farmers should be able to support their families and earn a decent standard of living, and we support the goal of sustainably raising farmer incomes”. Both Mars and Oreo’s Mondelez echoed this statement.
The average cocoa farmer makes only $3 per day. The extreme poverty rate in Ivory Coast and Ghana is 29.1% and 13% respectively. That comes down to more than 11 million people living on only a couple of dollars each day.
Taking advantage of market share could put more cash into farmer’s pockets, but proponents are hoping the cartel will help a potentially more dire problem — human trafficking.
For years, the chocolate industry has come under fire for rampant child labor and slavery in its supply chain, leading to several attempts to reform. Unfortunately, these issues are still stubbornly embedded. According to UNICEF, the “mosaic of small-scale growers struggle to make ends meet” and they “rely on child labour to increase the family revenue”.
Often impoverished or desperate parents in the region will sell their children to traffickers, hoping their child will find work and send part of their income home. Sadly, what happens is these young children are forced to do 80 to 100 hours of manual labor a week on places like cocoa farms.
“Thousands of boys as young as ten years old from the Ivory Coast and neighboring countries are trafficked to pick and harvest these pods. Their freedom is taken and they are forced to work long hours on the cocoa plantations without receiving any money for their work. They are beaten and work in dangerous conditions using machetes to open the cocoa beans,” says Stop The Traffik, an NGO fighting human trafficking.
Some of these children are bought for as little as $50.
Groups like Impact Forestry, an organization for experimental farmers, timber managers, and environmental workers are strongly supportive of the move, “We’re all for an Organization of Cocoa Exporting Countries to exact higher prices for producers, most of whom are poor. Otherwise, farmers will forever be at the mercy of the deep-pocketed buyers & industry”.
The hope is that higher profits for farmers will ease the pressure for cheap labor, and eventually reduce the demand for trafficking. For the farmers themselves, it would substantially increase their quality of life.
Unfortunately, some are skeptical of this outcome.
“Although necessary, a price increase will not be enough if benefits do not trickle down to all those involved in cocoa production, sharecroppers & wives farming along male partners, & workers included. We need to make the cocoa value chain more inclusive if we want real change,” claims Dafni Skalidou, an independent researcher on sustainability standards.
The results are yet to be seen. The average American eats over 11 pounds of chocolate a year, that’s the equivalent to 120 chocolate bars. There is plenty of room for consumers to make an impact on the market, whether it be supporting companies that ensure an ethical supply chain or simply by advocating for the equal distribution of these price increases.
Experts still aren’t sure if this cartel will work or not, but if it does, you might have to pay a dollar more for your chocolate. But all things considered, that’s not so bad.
