Cocoa, the key ingredient in chocolate, has been making headlines lately due to its volatile price movements.
While global cocoa prices have surged to record highs, reaching over $10,000 per tonne, the reality for West African cocoa farmers is quite different.
Oxfam’s survey of over 400 cocoa farmers in Ghana, the world’s second-largest cocoa producer, found that their net incomes have fallen by an average of 16% since the start of the COVID-19 pandemic in 2020. For women farmers, the decline was even steeper at nearly 22%. In fact, up to 90% of Ghanaian cocoa farmers do not earn a living income, meaning they cannot afford basic necessities like food, clothing, and medical care.
For women farmers, the decline was even steeper at nearly 22%The disconnect between global prices and farmer payments
The disconnect between global cocoa prices and what farmers are paid is stark. Governments in West Africa set cocoa prices based on sales from the previous year, meaning farmers are currently receiving a fixed price between $1,600 and $1,800 per tonne – a fraction of the over $10,000 per tonne global market rate.
Several factors have contributed to the declining incomes of West African cocoa farmers, including the COVID-19 pandemic, the war in Ukraine, climate change impacts, and aging cocoa farms. These challenges have led to reduced yields, crop diseases, and higher production costs for farmers.
Also read: IMF revises Ghana’s 2024 economic growth to 3.1%
A lack of reinvestment in cocoa production
The low incomes earned by farmers have also resulted in a lack of reinvestment in aging cocoa plantations. Many cocoa trees in the region are old, disease-prone, and producing less after repeated harvests. Farmers also struggle to access essential inputs like high-quality seeds, fertilizers, and pesticides.
The current cocoa supply chain is heavily imbalanced, with the majority of the profits going to chocolate manufacturers and traders, rather than the farmers who produce the raw material. To address this, a more equitable system is needed that ensures farmers can earn a living income and invest in the long-term sustainability of cocoa production.
