Bitter Chocolate
Cocoa supply chain and child labour behind confectionery majors.
Summary
Off, a Canadian journalist, investigated the cocoa supply chain, focusing on Cote d'Ivoire, which produces a large share of the world's cocoa, and on the conditions under which it is grown.
The reporting covers the labour question directly. Off documents child labour on cocoa farms, including trafficked children from Mali and Burkina Faso working without pay, and the conditions on the farms she visited. She traces the industry's response to the exposure of this in 2001, including the Harkin-Engel Protocol under which manufacturers committed voluntarily to eliminate the worst forms of child labour by a set date, and documents the repeated postponement of that deadline.
The economic analysis explains why the labour conditions persist. The farm gate price a grower receives is a small fraction of the retail price of chocolate. Growers have no market power, sell into a chain of intermediaries, and cannot afford paid labour at the prices they receive. Off traces where the value sits: in the grinding and processing companies, in the manufacturers, and in the retailers, all concentrated among few firms while production is fragmented among a very large number of smallholders. She covers the abolition of the Ivorian marketing board, which had stabilised prices, and the effect of liberalisation on growers' incomes.
The political sections cover the role of cocoa revenue in Ivorian politics and in financing the conflict that divided the country after 2002.
The book is advocacy journalism with a clear position. The economic analysis of value distribution along the chain is accurate and is the part that transfers. Certification schemes have expanded since publication with contested evidence about their effect on grower incomes and on labour practices.
Key takeaways 7
- The farm gate price a cocoa grower receives is a small fraction of the retail price of chocolate.
- Value in the cocoa chain concentrates in processing, manufacturing and retail, all of which are concentrated among few firms.
- Production is fragmented among very large numbers of smallholders with no market power against concentrated buyers.
- Growers cannot afford paid labour at the prices they receive, which is the economic condition that sustains child labour.
- The Harkin-Engel Protocol committed manufacturers voluntarily to eliminate the worst child labour and its deadline was repeatedly postponed.
- Abolishing the Ivorian marketing board removed the price stabilisation that had protected grower incomes.
- Cocoa revenue financed the political conflict that divided Cote d'Ivoire after 2002.
Who should read it
Operators and investors in agricultural commodity chains who need to see how value distribution along a chain determines conditions at its origin.
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Where it sits in the reference 4
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