The hidden price of loving chocolate

We spend a collective 400 million dollars* on chocolate in the run up to Valentine’s Day. To ensure our love affair with the candy is sustainable, industry stakeholders are beginning to take measures to protect cocoa farmers and their communities.

By far the majority of the chocolate consumed worldwide is produced from cocoa beans from the Ivory Coast, Ghana, Nigeria and Cameroon. Cocoa is cultivated by farmers on small plots of agricultural land measuring no more than a few hectares. Although a large number of farmers have formed cooperatives, these are often poorly managed and underfunded. That makes it difficult to implement sustainable agricultural practices. As a result, the soil becomes depleted and farmers move to the rainforest, where they cut down trees to grow cocoa plants and other crops in order to eke out a living for themselves.

Multifaceted problems

The extent of the resulting deforestation is not the only point of concern. These communities are faced with a range of issues including child labor and unequal treatment of women. One major social problem in the cocoa-producing regions of the Ivory Coast is that there are roughly 200,000 people without a birth certificate. These people are highly vulnerable to exploitation, as they do not officially exist. They have no access to social security benefits or financial support from official institutions and they cannot open a bank account or apply for a loan. This leaves them at the mercy of shady traders and moneylenders known as middlemen. As long as their illegal status continues, they cannot build a life for themselves.

“Both the farmers and the sector benefit from sustainability”

- Joseph Larrose, Director Group Sustainability at Touton

Touton: “See sustainability as a business case”

To make the cocoa sector in this part of the world more sustainable, different parties have come together, often in public-private sector partnerships. One company that has always played a leading role in this respect is international cocoa producer Touton. Touton works with agricultural specialists and regional authorities and has set up a multi-stakeholder platform to take sustainable cocoa production to a higher level.

Joseph Larrose, Director Group Sustainability at Touton says, “We see sustainability as a business case – it benefits both the farmers and the sector as a whole. By advising on agricultural practices and motivating farmers to use high-quality seeds and sustainable products, they learn how to produce more and better cocoa. That not only means an increase in income, but farmers can also start to provide for themselves by growing other crops, such as vegetables, which in turn leads to more jobs. The increase in knowledge and skills on farms and in communities also has social-economic benefits. Ultimately, it will lead to less deforestation and better landscape management.”

Touton is part of the World Cocoa Foundation which has worked for a sustainable West African cocoa sector for many years. (Image: WCF)

Cashless banking in the bush

To develop their sustainability efforts, Touton has called on the expertise of Rabo Partnerships. Larosse explains, “They have extensive experience in assessing the supply chains that run through smallholdings. We need this external insight to further scale up and streamline our sustainable activities.”

Although Rabo Partnership’s priority lies in increasing access to financial services, its advisors assess all the challenges faced by cocoa farmers and how these influence each other.“We are talking about tens of thousands of smallholdings, which may or may not be organized in cooperatives,” says Corné de Louw, Project Manager of Agribusiness & Cooperative Development at Rabo Partnerships.

As an example, De Louw mentions a cashless banking pilot in Ivory Coast. This country has a cash economy where cooperatives collect cash from the bank and travel back to the bush, where it is divided among the farmers through the various sections.

“Opening bank accounts for farmers has had unexpected benefits”

- Corné De Louw, project manager Agribusiness & Cooperative Development at Rabo Partnerships

De Louw elaborates, “Each year the money transports are robbed, often violently. So we came up with the idea of opening bank accounts for the farmers. They have had unexpected benefits. The bank accounts serve as a barrier for farmers to spend their money. The cash they previously spent on drinking in bars, for example, now remains in the account. All of a sudden there is money to pay the children’s school fees, money that they previously had to borrow from loan sharks at interest rates of up to 100%. Something as simple as a bank account can achieve all that!”

Read more about the work of Rabo Partnerships on the Rabo Development website.