Economics

Selling beans in Cameroon. Courtesy of World Cocoa Foundation for the National Confectioners Association.Around the world, 5 million to 6 million cocoa farmers—and 40 million to 50 million people total—depend on cocoa for their livelihood. The World Cocoa Foundation (WCF), which provided these estimates, puts annual cocoa production worldwide at 3.8 million tons valued at $11.8 billion. For the past century, demand has grown 3 percent per year.

Cocoa is an especially critical export for the West African nations such as Ghana and the Cote d'Ivoire that source more than 70 percent of the world’s cocoa.

Cocoa is traded on the world market as a global commodity. Its price can fluctuate daily, depending on—and affecting—supply and demand around the world. Supply and demand depends on many factors. For example, too many beans on the world market can cause prices to drop, leaving farmers without the cash needed to cultivate their crops, which ultimately lessens supply. Adverse weather or tree disease can shrink supply as well.

Cocoa beans come to the market when farmers sell to buying sheds in their local communities. Their beans are mixed with their neighbors’ beans and sold through contracts to larger traders, then to exporters or processors. Beans brought to a local market today may have been bought while they were still on the tree.

Schools teach farmers how to support their families. Courtesy of World Cocoa Foundation.Farmer Economics

Sustainable growing methods in use today, such as growing cacao in shade and using low-cost biocontrol measures to cultivate the trees, enable farmers to be more self-sufficient—from their own farms, they can harvest fruit and meat, build shelters, procure fibers for weaving and produce enough cacao and other products to supply income for the family.

Shade cacao farmers make more money than they would by growing cacao alone, because they gain additional income from the shade tree crops. These crops also provide a backup source of income should the cacao crop fail or world prices drop.

In addition, this system eliminates the need for the farmer to clear more land, saving the rainforest and enabling the farmer to reap diverse harvests from the same land for years to come.

Industry supports education in cocoa communities. Courtesy of World Cocoa Foundation. Industry Assistance

Given the significant benefits that sustainable growing presents to farmers, the global chocolate and cocoa industry conduct on-the-ground programs in cocoa-growing regions. There, they share with growers the methods that can produce more income and security.

These programs convey to small farmers the company knowledge gleaned from research in bio-control and bio-technology—to the benefits of the trees, the farmers and consumers the world over who desire a steady supply of chocolate.

For example, farmers are now earning between 20 percent and 55 percent more from their crops through the WCF programs. One such effort is the Farmer Field Schools, which support cocoa farmers with practical on-the-ground assistance and agricultural best practices that help them grow a better quality cocoa crop and more of it.  Farmers also learn how to diversify their crops to and how to get them to market easier.

Community members learn about growing cocoa. Courtesy of Sustainable Tree Crops Program.In addition, the WCF’s Cocoa Livelihoods Program is reaching at at least 165,000 smallholder, cocoa-growing households in West and Central Africa, in partnership with the Bill & Melinda Gates Foundation and numerous branded manufacturers. The overall goal of this program is to increase farmer income while strengthening local service capacity, through improved marketing, farm production efficiency and quality and farmer competitiveness on diversified cocoa farms.

These programs are valuable because increasing cocoa farmers’ incomes improves communities and supports better nutrition, health care and children’s education—and makes a positive difference in the family’s quality of life.

For nearly a decade, the industry has been working together to bring about positive and sustainable change to the way cocoa is grown and harvested in West Africa. During this time, the industry has invested more than $75 million on education, farmer training, agricultural improvement programs, health programs and more.

In 2009-2010 alone, industry will have spent more than $40 million on projects across West Africa and impacted more than three million direct and indirect beneficiaries, including hundreds of thousands of cocoa farming families and more than one million children.

Individual companies also are encouraging sustainable cocoa farming through their own efforts. Learn about certifications and farmer programs from ADM, Barry Callebaut, Blommer Chocolate Company, Cargill, Ferrero, Guittard Chocolate Company, The Hershey Company, Kraft Foods, Mars and Nestle that govern how a chocolate product is produced. 


Did You Know?
Benjamin Franklin sold chocolate in his print shop in Philadelphia.
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