On June 9th we left for Amsterdam to attend the World Cocoa Conference, a 4-day conference on the future and sustainability of the cocoa sector. More than 1400 participants attended, coming from 55 countries worldwide, representing all stakeholders in the value chain: governments of producing and consuming countries, cocoa processors (Mars, Cargill, Callebaut,….), traders (ADM, ECOM,…), cocoa farmers, chocolate makers, civil society actors, journalists …
It’s more complicated than that…
After the opening ceremony, governments of the most important cocoa-producing and cocoa-consuming countries and the cocoa and chocolate industry reported on the progress made in the first two years of implementing the Global Cocoa Agenda. This agenda was set two years ago at the first World Cocoa Conference, held in Abidjan in November 2012, as a roadmap for achieving a sustainable world cocoa economy.
Governments of the cocoa-consuming countries also shared their engagement for the coming years. Ms. Dijksma, Minister for Agriculture of The Netherlands, put strong emphasis on the importance of Amsterdam as the largest cocoa port in the world. She informed that the Dutch cocoa sector ensures that cocoa consumption in the Netherlands is fully sustainable by 2025. At the same time she made the interesting statement that certification is not THE solution, it has contributed to change, but there is need for a holistic approach through which farmers’ position in the chain is improved.
All participants at the conference agreed that progress has been made so far, but that all actors need to step up their efforts to tackle the existing challenges, in particular in the area of improving cocoa farmer’s incomes and increasing their resilience in the face of price volatility, while ensuring their food security.
Today’s prospects are that by 2020 there will be a shortage of 1 million ton cocoa on the world market. This is a direct result of the increasing demand for cocoa products by growth markets as China and India, and declining production because of climate change and producers converting their cocoa trees to other crops like oil palm and rubber, which are more profitable.
Today 80% of cocoa is grown by smallholder farmers, but cocoa farming is not profitable. Returns are low and it’s a risky business for small-scale farmers because of the aging trees, soil depletion, and pests and diseases (often occurring more because of climate change). Also the availability of land should be taken into account when wanting to boost production. Productivity per hectare needs to increase as converting more tropical forest is not an option! Considering all this, it’s not surprising to see that youngsters don’t feel attracted to become cocoa producers, don’t see a future in cocoa and leave for the cities.
At the conference you could really feel the urgency for change. We need to act today! As having enough cocoa in the future is for the benefit of all... both for consumers not wanting to miss their daily chocolate, as for the industry… not wanting to go bankrupt!
“Price is the best fertilizer”
Looking at the price of a chocolate bar in the supermarket, we can state that only 3% of the value goes to the farmer. Some of the stakeholders present put forward as part of the solution to increase the price of cocoa. But a sustainable solution for the problem is more complicated than that… A higher price would indeed increase the income of farmers, stimulating at the same moment production. According to some the latter could have a destabilising effect on the world market, a so-called ‘boom and bust’ scenario in which prices plunge when more cocoa is available on the market… this needs to be avoided at all time. So, key is to increase production not too fast… so prices don’t fall. But all this does not redistribute the cake… To be able to give a higher share of the cake to the producers, industry will need to be willing to gain a little less, while consumers pay a higher price.
Richard Quest (Journalist and broadcaster at CNN), facilitator of the most dynamic session at the conference expressed his frustration about the fact that all too often at this conference panellist say that “it’s more complicated than that…”. Even when debating about the eradication of child labour in the sector... Does this then give reason for pessimism?
Well, many elements of the solutions were mentioned at the conference. Now it’s key to bring the pieces of the puzzle together, which is only possible through close collaboration between all actors in the supply chain. Therefore, we welcome very much initiatives like Cocoa Action, created in 2010, a platform that brings together all national cocoa plans and the programmes of the industry, to align and bundle knowhow and efforts in both producing and consuming countries. The sector needs to move as a whole… individual small programmes by private actors or nations will not make the difference!
For us, it was an interesting week with a lot of new contacts and a better insight in the sector. We did go home with mixed feelings, as it was not all that clear whether the nice words and good intentions of the private sector are mere window-dressing activities, or if they really have the intention to transform the cocoa sector, so to strengthen the small-scale farmer and giving them a fair share in the profit. To be continued…
- by Caroline Huyghe and Leo Ghysels -