For Larbi Siaw, a cocoa farmer in Ghana’s western north region, this is one of the busiest times of year. Like millions of smallholders across west Africa, he and his family are chopping down ripe yellow pods, scooping out white pulpy beans and leaving them to dry on reed mats in the heat.
Ghana and neighbouring Ivory Coast produce 60 per cent of the world crop and at the December height of the main harvest, visitors to their rural heartlands are greeted by the smell of drying cocoa, seductive and familiar.
But for Mr Siaw, who has grown cocoa for more than half of his 60 years and whose father farmed the same crop, this year leaves a sour taste. For a start, the rains didn’t come as expected in July, so output may be low. Even though the government has raised the farmgate price nearly 30 per cent to $1,800 a tonne, he complains that it is still too little. “They don’t give us a good price,” he tells me.
The 2020 Cocoa Barometer report on the sector’s sustainability agrees with him, estimating that farmers need at least $3,100 per tonne to make a decent living. Governments in Ghana and Ivory Coast have long argued that farmers should earn more for their labour. By some estimates, they make just 6 per cent of the sale price of a bar of the confectionery.
With this in mind, Accra and Abidjan recently added a $400-a-tonne “living income differential” to the price of cocoa harvested from this crop year. When Hershey bought cocoa on the futures market instead — which analysts said allowed it to avoid the LID — both countries shut down the company’s sustainability programmes. In the end Hershey agreed to pay the surcharge.
But the problem of how to agree a fair price for farmers’ output rumbles on. When I was a reporter in west Africa nearly 15 years ago, I visited cocoa farms, warehouses and buyers regularly so I could file stories for Reuters’ commodity news service. Working in the world’s second-largest exporter of beans (after Ivory Coast), I grew to appreciate the popular saying “Ghana is Cocoa and Cocoa is Ghana”. It was commonly said that about a quarter of the country’s population relied on cash from cocoa.
I visited small villages, which often lacked electricity, water and decent schools, and spoke to the sharecroppers, migrants and families upon whose labour the world’s chocolate industry rests. It is back-breaking and hard, carried out with nothing more sophisticated than a machete.
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Officials were suspicious and anxious about my reports, which could move the price. Such was the sensitivity surrounding a crop that brought in much-needed foreign exchange that one request for an interview was met with the reply: “Why is it in the interests of mother Ghana for us to speak to you?”
In truth, there are a lot of reasons farmers’ incomes are low. The government sets the farmgate price and can tax it heavily. It strives to give smallholders at least 70 per cent of the price at export but at times has paid just a fraction of that.
While Mr Siaw supplements his income selling palm oil, many rely on a few bags of cocoa for their annual income. Farms are small and scattered, yields are low, productivity poor, disease can wipe out the crop. Farmers are often poorly educated and struggle with modern farming techniques. Increasing cocoa prices also encourages farmers to grow more, driving prices down in a vicious circle that it is hard to escape. And with most chocolate made close to the end market of western consumers, little value is added in west Africa.
The most pertinent question of all may be whether farmers will want to stick with the crop in the long term. Most want a better future for their children and many hope this will not involve the cocoa farm. “I can’t advise my children to do it,” says Mr Siaw, as he complains about the price. He is not alone.
Accra, the Ghanaian capital is now jazzed up by oil money, and full of energy. It is an attractive prospect for a young person in the bush. The cocoa price is an issue not just for Mr Siaw but also the global confectionery industry that relies on the output of people like him.
If farmers don’t think it’s worth their while to labour during the cocoa harvest, then the whole industry crumbles.
