Part 3: Tracing the Cocoa Value Chain – Who Earns What?

Previously, I argued that calling our farmers “independent businessmen” is more convenient fiction than reality. Now, let’s follow the money: from the cocoa bean in my father’s hand to the chocolate bar on a shop shelf in London. This is a story of value – who adds it, who captures it – and it lays bare why a cocoa farmer in Ghana remains poor while chocolate multinationals thrive. My aim here is to map the cocoa value chain and spotlight the power dynamics at each step. In doing so, we will see how the absence of value addition at origin and the monopoly of COCOBOD leave farmers with crumbs (often cited at around 5–6% of the final product’s value)

Farm Level (Origin): Imagine a kilo of cocoa beans harvested in Ghana. For that kilo, my father is paid a fixed farmgate price set by COCOBOD each season. As of the last main crop season, the price was increased to help farmers, reaching roughly GH¢20,000+ per tonne (approximately $1,800) following a recent hike. In practical terms, for a 64kg sack, he might get around GH¢1,280 (about $110). This is his gross income before he subtracts costs like fertiliser, hired labour, or land rent. That sack, once sold, is weighed and graded by the licensed buying company (LBC) agent and trucked off. At this point, the cocoa’s journey has just begun, but the farmer’s role – and reward – is essentially finished. Out of a £2 chocolate bar, only a few pence are attributable to the cocoa itself and, by extension, to the farmer’s effort.

It’s startling but true: cocoa farmers earn only about 6% of the value of a chocolate bar on average. Just a few decades ago, in the 1970s, when the world market was different, Ghanaian farmers could get up to 50% of a chocolate bar’s value. But today that share has dwindled to almost nothing – around a twentieth. Why? Because almost all the subsequent steps that add value (and cost) happen away from the farm, often outside Ghana, and those who perform them take the lion’s share of the income.

Export and Trading: After leaving the village, cocoa beans are accumulated in warehouses and eventually sold by COCOBOD (or its subsidiary) to international buyers. Here, commodity traders and international buyers enter the scene. They purchase beans at an auction or via contracts, paying a price that includes freight and insurance. These traders often have significant leverage – they operate in an oligopsony (few buyers, many sellers) and can negotiate country differentials and contract terms. They also benefit from hedging on futures markets. By the time the beans are loaded on a ship in Tema, some value has been added in terms of transport and handling, but not much. However, the pricing power is already tilting away from Ghana. For instance, Ghana and Côte d’Ivoire recently introduced a $400/ton Living Income Differential (LID) – basically a premium to help farmers earn more. In theory, this should increase what farmers ultimately receive. In practice, news emerged that major buyers attempted to avoid paying this premium when market prices surged by pressuring origin countries to waive it. Companies engaging in this behaviour are guilty of hypocrisy of the highest order, said one civil society report, noting how firms that spoke of sustainability were unwilling to pay a bit extra to farmers. The key takeaway: traders and big manufacturers have the clout to decide whether a few hundred dollars reach the farmer or not, by virtue of controlling purchasing.