Roundtable: Cocoa Crisis and its Impact on Farmers and Consumers

Jul 1, 2024

Roundtable Discussion: Coco Crisis

Introduction

  • Topic: Global cocoa crisis and its impact on chocolate prices and cocoa farmers
  • Host: Ender Brady
  • Main Issue: Cocoa farmers face difficulties due to climate change and rising costs, yet big companies benefit

Current Situation

  • Surge in cocoa prices but benefits not reaching farmers
  • Primary cocoa producing countries: Ghana, Ivory Coast, Nigeria, Cameroon
  • Cocoa bean prices increased dramatically (from $2,700 per metric ton in Jan 2021 to $9,700 per metric ton in Jan 2024)

Key Causes

  • Climate change affecting crop yields
  • Diseases affecting cocoa plants

Impact on Farmers

  • African farmers struggling financially, some abandoning cocoa farming
  • High profits for big companies like Lindt and Nestlé
  • Farmers in Ghana often make as little as $2 a day
  • Farmers face tough manual labor, especially in tropical environments

Supply Chain Issues

  • Middlemen and international companies earn significant profits
  • Disconnect between international prices and farmer earnings
  • Some farmers benefit from fair trade or schemes, but many do not

Future Concerns

  • Potential shift away from cocoa farming by younger generations
  • The need for a sustainable business model for cocoa farming
  • No immediate potential for farmers to set prices

Potential Solutions

  • Increased investment in farmers is needed
  • Brands and companies need to commit to fair pay and sustainable practices
  • Governments need to support and issue fair policies for pricing and production

Consumer Impact

  • Shrinkflation: smaller product sizes but same prices
  • Emotional connection to chocolate: a factor in continued buying despite price increases
  • Importance of buying sustainable chocolate

Expert Opinions

  • Dr. Christy Leslie: Emphasized difficult labor conditions and environmental threats
  • Anouck Frank: Highlighted the need for higher prices and better investment in farmers
  • Evans Apiah: Called for better price-setting mechanisms and functioning of government policies

Final Thoughts

  • Importance of raising awareness among consumers about the source of their chocolate
  • The role of sustainable practices in maintaining the cocoa supply
  • The market and consumption patterns will adapt but farmer welfare needs continuous attention

Key Terms

  • Shrinkflation: Reduction in product size while maintaining the same price

  • Climate Change: Significant driver of reduced cocoa crop yields

  • Fair Trade: Certification promising fair wages and practices for farmers

  • Mass Balancing: Mixing certified and non-certified cocoa in supply chains

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