The Illusion of Profit in the Chocolate Industry
How Power Drives the Chocolate Industry and Crushes Smallholder Cocoa Farmers"
It's a common belief that the driving force behind any business is profit. Yet, in the cocoa industry, it's not money that motivates the lead firms and elites. Rather, it's power. The power to control, monopolise and dictate the industry's direction, regardless of the human cost. As the son of a cocoa farmer, I believe that every business should profit, but not at the expense of the vulnerable. This article focuses on how the cocoa industry's pursuit of power has been used to strip smallholder cocoa farmers of control over their livelihoods, turning them from creators of fulfilling lives to beggars for the bare minimum.
"Power is not given; it's taken."
Smallholder cocoa farmers have always been at the mercy of lead firms in the chocolate industry, who are more motivated by power than money. This is the reason why extreme mergers and acquisitions have occurred, leading to only five companies processing over 75% of the world's cocoa beans. One such example is Olam, which has gained control of over 100 cocoa processing factories through acquisition, and as an ingredients trader, gives it the power to control procurement and processing. Money is just a consequence for these firms, and their ultimate goal is to wield power over the sector. Olam again partnered with Mondelez to create commercial cocoa farms in Indonesia. Again leaching into the territories of smallholder farmers to dominate the entire cocoa-chocolate value chain. From farm to cocoa processing (Olam) to Chocolate manufacturing (Mondelez). A perfect partnership right? Hmmmm
Furthermore, sustainability initiatives and government policies are often developed without meaningful consultation with smallholder cocoa farmers. This lack of inclusion perpetuates the power imbalance within the industry and ensures that the voices of those who are most affected by the policies are not heard. As a result, the policies that are developed often fail to address the root causes of the problems faced by smallholder cocoa farmers.
An example of this can be seen in how Mondelez, one of the largest chocolate manufacturers in the world, used their sustainability initiative called CocoaLife to gain a competitive advantage. They used this initiative to acquire data from farmers, which they then used to develop farming technologies for commercial cocoa farms in Indonesia. While this may seem like a positive development, the ultimate goal was to impact cocoa prices in the long run and take back the little power left in the hands of farmers. Cargill's alleged historical writing of global agricultural policies, as highlighted by Vanda Shiva, demonstrates the furthest the industry is willing to go to gain power. This, coupled with the Dutch farmers' historical political win affirms the assertion that power is not given; it's taken.
Even sustainability initiatives are used by lead firms or chocolate industries to gain a seat at policymaking tables, hence reducing the policy space of producing countries. These initiatives are often driven by the need to create a positive public image and to ward off potential regulation. The problem is that these initiatives are rarely farmer-centric and often result in further disempowering smallholder cocoa farmers.
Governments also play a role in this power imbalance hence perpetuating the inequalities within the cocoa industry to the detriment of Smallholder Cocoa Farmers In Ghana, for example, the government serves as the de facto buyer and seller of farmers' cocoa beans, with the price being determined solely by the government. The government also decides what percentage of the sales price to give to farmers. This lack of transparency and accountability means that farmers have little say in the pricing of their crops, leaving them at the mercy of the government and other actors in the supply chain.
As Kofi Annan once said, "Farmers are the backbone of the cocoa industry. We need to put them at the centre of the discussion about how to create a sustainable cocoa sector."
By giving farmers the power they need to succeed, we can create a more sustainable, equitable cocoa industry.
Remember the words of American civil rights activist Ella Baker, who said, "Give light, and people will find the way."
It is time for smallholder cocoa farmers and their allies to take back the power. The first step is to organise themselves and hold governments accountable for their actions. Farmers should demand transparency in pricing and be given a seat at the policymaking table. They should also work to strengthen their collective bargaining power by forming cooperatives or joining existing ones.
The second step is to create farmer-centric sustainability initiatives that prioritise the needs and well-being of smallholder cocoa farmers. Instead of relying solely on lead firms or chocolate industries to develop these initiatives, farmers should be at the forefront of the development process. This will ensure that these initiatives are truly beneficial for farmers and not just a tool for lead firms to maintain their power.
In conclusion, no one has the interest of smallholder cocoa farmers at heart except for the farmers themselves. t's time for a shift in power dynamics. Organised farmers must hold both corporations and governments accountable. While external assistance can be helpful, true power must come from the farmers themselves. They must have the ability to make decisions that affect their lives and livelihoods. It's about giving them the tools and resources they need to take control of their own futures.