Cocoa

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Overview

It is estimated that 5-6 million smallholder households produce 90 percent of the world’s cocoa. Some 50 million people worldwide are dependent on the cocoa supply chain for their income or employment. 

The cocoa supply chain is a typical hourglass shaped supply chain with a large farmer base, only a few exporters and processors, and millions of consumers. Just nine traders and processors handle 75 percent of the world’s cocoa trade and have a large influence on cocoa prices and the sustainability of the industry.

Cocoa farming is often labour-intensive and heavily reliant on hand labour with low financial rewards.

Salient issues

Many cocoa farmers and cocoa farm workers live in extreme poverty. In four out of the world’s five biggest producing countries – Ghana, Côte d’Ivoire, Cameroon, Indonesia and Nigeria – the earnings of the majority of cocoa farmers are below the international extreme poverty line.

Low incomes threaten the future of cocoa: Around the world, youth are leaving cocoa farms for urban areas, while farmers and workers increasingly shift to other better-paying products, including illegal mining.

It takes concrete collaboration among cocoa and chocolate companies, governments and civil society to change these risks and root causes.

The salient issues in the cocoa sector (in the order of saliency):
Living Income, Living Wage

In Côte d’Ivoire, a typical male-headed cocoa farmer household is estimated to earn just 1/3 of a living income. Sharecroppers and farm workers earn still less.

Child Rights

In Ghana and Côte d’Ivoire, children constitute a third of the total workforce in cocoa production: Some 1.56 million children – or 45% of the children living in the area – are engaged in child labour.

Climate and Deforestation

Globally, an estimated 70% of cocoa is grown in agroforestry systems, which can support reforestation. But full sun production threatens several tropical rainforests, from Amazon to West Africa and Southeast Asia.

Health

Major health concerns in cocoa production include injuries, exposure to pesticides and fertilizers, malnutrition, and poor access to health centres.

Gender

Women cocoa farmers are disadvantaged in accessing credit, training, extension services, leadership positions at farmer organisations and cocoa labour groups. As workers, they earn less than men.

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Root causes

Unequal value distribution: Cocoa farmers have little bargaining power. Brands are retailers are estimated to capture a whopping 90% of the value in cocoa supply chains, while just 7.5% accrues to bean exporters, smallholder farmers and workers.

Poverty: Poverty contributes to almost every challenge facing the cocoa sector. From child labor and deforestation to malnutrition and gender inequality, these challenges will be impossible to address if farm households continue to live in poverty.

Dominance of monoculture production: In full sun cocoa production, intensive use of agrochemicals causes health risks, climate impact and biodiversity loss on cocoa farms. Organic and agroecological production sidestep these problems.

Climate change: Cocoa is a highly drought sensitive crop. Yields are reduced and whole production areas become unsuitable for cocoa, as tempetures rise and droughts, tropical storms and hurricanes become more frequent and intense.

Background data on cocoa (*Global Volume / **Fairtrade Volume)

Largest producer countries*

  • Côte d’Ivoire (44%)
  • Ghana (14%)
  • Ecuador (8%)
  • Cameroon (6%)
  • Nigeria (6%)
  • Others (22%)

Estimates 2021/22, ICCO

Dominant production model*

90%

of all cocoa is produced in smallholder farms

Global Production*

4,820

million metric tonnes

estimate 2021/2022, ICCO

Fairtrade certified producer organisations**

353

23 January 2023

Fairtrade certifiable production**

699,000

metric tonnes, 2021

Farmers in Fairtrade organizations**

457,000

2021

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