Unraveling Embeddedness in Cocoa-Chocolate [Part 1]
How an intentional implementation of Global Division of Labour Impacted and disenfranchised Cocoa farmers and cocoa producing countries
The cocoa-chocolate industry is a complex and intricate web of processes, from the cultivation of cocoa beans to the consumption of delectable chocolates. Yet, to truly comprehend the nuances and challenges within this industry, one must delve into the concept of embeddedness – a term that encapsulates the concentration of various nodes within the supply chain. Embeddedness is not a term to be taken lightly; it's the cornerstone of how the cocoa-chocolate industry operates. In this first article of our series, we will dissect the profound effects of embeddedness, tracing its historical roots and the implications it has on the cocoa industry today.
Embeddedness is more than just a logistical arrangement; it's a concept deeply rooted in the global division of labor. This concept suggests that countries should focus on their core competencies within a value chain to maximize efficiency. However, what this theory often neglects to mention is the artificial nature of such arrangements. Take, for instance, cocoa production being concentrated in West Africa. This wasn't merely due to the region's arable land; it was a result of historical dynamics.
To dissect embeddedness, we can break down the cocoa-chocolate supply chain into four pivotal sectors:
1. Dried Cocoa Beans Production
2. Cocoa Processing or Grinding
3. Chocolate Manufacturing
4. Chocolate Consumption
Cocoa production, the very foundation of this industry, predominantly resides in West Africa. Ghana and Ivory Coast alone account for over 70% of the world's cocoa beans. Geographically, West Africa's lush tropical rainforests create an ideal environment for cocoa cultivation. However, the primary driver behind the concentration of cocoa farming in this region wasn't its natural suitability for cocoa growth. Instead, it was the legacy of colonization that compelled West African countries to produce cocoa.
Colonial powers directed the cultivation of cocoa to serve their own interests, diverting vast swaths of West African land to feed processing and manufacturing plants back in the colonizers' homelands. Cocoa swiftly became a "Cash Crop," intended to generate cash for the colonizers' economies, not necessarily for the farmers who toiled the land. In essence, the cocoa farmer transformed into a laborer for the government, a scenario that persisted even after these nations gained independence.
Following independence, many West African governments retained the colonial trajectory by adopting cocoa production as a poverty alleviation strategy. Their primary focus was to earn foreign exchange from cocoa, catering to the interests of cocoa processors and manufacturers who lacked the arable lands to produce cocoa themselves.
Notably, the Federation of Cocoa Commerce (FCC), the entity controlling the cocoa trade, was established not by independent cocoa-producing countries but by the colonial powers during their occupation. Even today, with independence, the FCC remains in place, necessitating that members trade among themselves. Remarkably, Ghana, an independent nation with significant cocoa production, retains its membership in the FCC, and Ghana Cocoa Board, the governing agency, controls the buying and selling of cocoa beans.
As we conclude this first article, we've scratched the surface of the curse of embeddedness in the cocoa-chocolate industry. We've seen how historical factors, from colonization to post-independence dynamics, have embedded cocoa production in West Africa. In our next article, we will explore the enduring impacts of this embeddedness on cocoa farmers and the broader industry. Prepare to delve deeper into the complexities of an industry marked by historical legacies and contemporary challenges.
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