Sustainability efforts in cocoa farming is an extensive topic, one that cannot be fixed overnight and certainly can’t be discussed fully in this feature; but when asked what the issue is in the cocoa industry at present, Original Beans Founder, Philipp Kauffmann summed it up: “The current cocoa and, by extension, chocolate industry is an exploitative industry, making money on the lowest social, environmental and quality denominators.” 

Original Beans founder Philipp Kauffmann represents the 7th generation in a family of recognised nature explorers and conservationists who coined the term “sustainability”. One of them advised in 1795 to preserve nature in such a way that future generations can experience her as we do today. Philipp gave up his job at the United Nations in New York to grow Original Beans as a brand for a world in which we regenerate what we consume. 

He says: “I am an optimist and know from our business experience at Original Beans that it is possible to build a thriving cacao sector. The most important lever to achieve this are higher prices for chocolate which get distributed more fairly and evenly through the value chain to the cocoa farmers. The cocoa commodity market needs to be reined in. I can see a future in which the big chocolate players will move to support this, because the risks of financial speculation, reputation loss, climate costs and consumer protection laws will become too high.” 

Cocoa farming is unsustainable in very crude ways: farmers are so poor they have no alternative to the little cash that cocoa earns them, often involving their children in the work more hours and in physically harsher work than children should do. Rainforests are cut down to make place for negligently managed, cash-starved micro-farms that are cheap fodder for their governments and industry. “Picture this,” says Philipp, “in craft chocolates such as ours, on-farm fermentation and drying of beans is perhaps the most important step to make a very healthy and tasty chocolate product. In commodity cocoa, fermentation and drying is almost non-existent, because it costs money and skills.” He adds: “Most of the burden of chocolate is paid by West Africa, the countries of Ivory Coast and Ghana. That’s also the trade in which most of the money is being made. A recent report by one of the world’s ‘Big Candy’ giants, Mondelez, put the amount of money we in the West would need to pay back to the cocoa farmers in these two countries each year to be “fair” enough to allow 3/4ths of them a minimum living income at $10 billion per year. That’s the help they deserve. It would need to come from consumers paying more and cocoa businesses profiting less.” Not only this, but over the next few decades, climate change is expected to threaten many regions across the world, including those where cocoa is grown. Forests play a critical role in mitigating climate change, while at the same time providing important benefits to soils, water, biodiversity and providing livelihoods for millions of farmers, as well as a secure food supply for a growing global population. However, increasing pressure from a wide range of sources, including logging and other crop production, threaten the ecological integrity of forests. Kate Clancy, Group Sustainability Lead at Cargill Cocoa & Chocolate, tells us: “Cocoa farmers are often exposed to a variety of external variables that make it hard to secure stable livelihoods and may push them to expand further into forest areas, converting new lands in order to meet the increased demand for cocoa and meet their livelihood needs, trapping them in a vicious cycle that creates long-term problems for forests and farmers alike. 

“Mitigating the impacts of climate change and ending deforestation are crucial to our ability to produce enough food for everyone. The interrelated socioeconomic factors include market prices of cocoa, policies on land use and enforcement of forest protection laws. This challenge must be addressed holistically to ensure a sustainable, secure supply of cocoa for generations to come.” 

From their perspective 

We reach out to David Finlay, Senior Supply Chain Manager for cocoa at the Fairtrade Foundation, who gives us further insight into the farmers’ lives. He tells us that Mile Désirée is a widow from Ivory Coast, who lives in a modest homestead with her five children. She belongs to CAVA cooperative and farms on a small plot of land, growing chilis and mangos to supplement her income from cocoa farming, alongside cassava for home consumption. For Mile, her life is centred around ensuring the necessities of day-to-day life are covered for her and her children, with little remaining money to invest back into her home or towards savings for healthcare and other needs. 

Digbeu Alphonse is a cocoa farmer from the same cooperative, who manages a much larger plot of land and grows five tonnes of cocoa per year, compared to Mile’s less than two tonnes. Although his revenue is higher, Digbeu struggles with the rising costs of seasonal labour and access to long-term credit lines needed to replenish his ageing tree stocks. 

“The stories of Mile and Digbeu are the stories of millions of small-holder cocoa farmers in West Africa today. They point to the common challenges which farmers are facing – decreasing yields as a result of climatic changes and poor input use, rising costs of labour and the need to diversify beyond cocoa farming to help ends meet,” David explains. 

“At the same time, they also point to the reality that ‘no two farmers are the same’; each farmer has a different combination of farm size, productivity, labour and other costs which make their situations unique, and call for tailored responses to their individual situations.” 

Around 40% of the world’s cocoa comes from 1.2 million smallholder farmers in Cote d’Ivoire, with the average farmer continuing to earn less than $1 a day, well below international benchmarks to cover the full cost of living (also defined as a ‘living income’).   

David adds: “Over the last five years the theme of ‘living income’ has grown in prominence – both among certification schemes, such as Fairtrade – and for industry actors, such as Nestlé and Mars who have each made recent pledges to further invest in solutions which drive improvements in farmer income.” 

Fairtrade believes that all farmers deserve a living income, in exchange for the hard work which goes into growing the cocoa we enjoy.  A living income is an income sufficient to cover the cost of sustainable production as well as everyday expenses like a nutritious diet, children’s education and healthcare. The Fairtrade Living Income benchmark for Cote d’Ivoire is $7271 a year for an 8-member household or $2.49 per person per day. Farmers will need to more than double their incomes to reach this.    

Fairtrade’s experience during recent years has generated three core insights in relation to considerations for improving farmer income, David says: “Firstly, no single company, trader, certification scheme or government body can support a thriving cocoa sector in isolation. Any support provided should factor in the role that different organisations, institutions and groups can play, including towards planning and cost sharing. This line of thinking should support responses for both cocoa and non-cocoa income streams, which are each needed to move farmers towards living income benchmarks.  

“Secondly, no two farmers are the same and therefore solutions should – as far as possible – be flexible towards individual farmer realities. In practical terms, support should factor in both pricing and non-price interventions, with farmers positioned as ‘customers’ of relevant solutions that meet their specific needs, rather than passive recipients of generic training.   

“Finally, efforts to improve farmer incomes should look to affect the wider environment within which farmers operate; both on farm and off farm. For example, in looking to improve farmers’ access to finance, long term partnerships with lenders to grow their menu of lending options will be needed, in place of one-off provisions of subsidy,” he concludes. 

What solutions have been presented? 

Over the past 40 years prices for cocoa at large have trended down, not up. In other words: our societal discourse around fairness in chocolate – all those conferences, reports, and brand claims – has not yet shifted the paradigm. “It is the same for deforestation,” says Philipp. “But change is coming. Satellite monitoring, cellular telephones and craft chocolate makers. These are important trends that empower cocoa farmers, end-consumers and the civil society whilst increasing pressure on the dangerous business-as-usual mindsets,” he prophesies.  

Kate Clancy at Cargill says: “For us, cocoa sustainability has been a long-term journey, with many important milestones. For example, in 2012, we launched the Cargill Cocoa Promise to formalise and solidify our long-time sustainability efforts in our direct supply chain, and in this way execute on improving the lives of cocoa farmers and their communities, while securing a thriving cocoa sector for generations to come. As part of our holistic approach to sustainability, we are committed to building full transparency, traceability, and trust in our cocoa supply chains. One important aspect of this relates to making traceability the standard in our direct sourced cocoa supply chain. That is why we are committed towards 100% digital farm-to-factory traceability for all our cocoa beans in our direct sourcing network by 2030.”  

Kate goes on to explain how it is important to invest in technology to better support farmers and to continue to build trust through transparency with customers and consumers. “We launched and expanded CocoaWise™, our digital suite of tools – an important enabler of achieving our goal of 100% digital traceability to the farmer. We scaled up the use of digital payments in all our sourcing countries to ensure accurate and secure payments to farmers. Beyond our own supply chain, we continue to focus on leveraging accurate and secure technology for sector-wide transformation. More open-source innovation and precompetitive sharing of data are key in making this happen – initiatives such as cross-sector reporting or national farmer registration and traceability systems are examples of how technology can help drive a positive impact for all.”   

“we are committed towards 100% digital farm-to-factory traceability for all our cocoa beans in our direct sourcing network by 2030”

Kate Clancy, Group Sustainability Lead at Cargill Cocoa & Chocolate

At an industry level, it’s important to connect the dots and provide a systematic approach for a better cocoa future. Sustainability challenges in the industry have prevailed and are highly interconnected. This underlies the need for a systemic approach across the sector. Only by driving improvements at all levels – economic, environmental and social – can structural change be achieved.   

Kate tells us some aspects that need to be taken into consideration:  

Growing consumer demand for sustainability: Consumer demand for sustainable chocolate is growing, and consumers want to know about the impact of their purchases.  

Digitising the cocoa chain: A digitised cocoa supply chain provides companies and their consumers with granular transparency, such as end-to-end traceability of cocoa, remote-sensing of landscapes to assess deforestation risks, and digital tracking of school enrolment and attendance to monitor potential child labor risks. In these efforts, it is crucial to ensure that the tools increase rather than reduce farmers’ autonomy.  

An enabling environment, global to local: Governance structures between and within companies and cocoa-producing and consuming countries are important enablers of progress in the cocoa industry. 

Cocoa for a living: Cocoa is an important source of employment and income for rural populations, yet too many cocoa farmers do not earn a living income. Profitability for households depends on multiple factors, such as productivity, business skills, access to resources and farm gate prices, which all need to be taken into account. 

Deforestation out, regeneration in: Climate change and biodiversity loss are serious threats to nature, and therefore also to industries. Aligned with the EU Green Deal and the global UN Conference of the Parties (COP) as key collective agendas for climate neutrality and nature regeneration, we need to rapidly scale nature-based practices so that nature and people – especially farmers – reap the benefits.   

Social equity and justice: Progress is only made when we forge social justice, respect human rights and drive equality. Strong communities are a key factor in preventing challenges such as child labor. Here, women leaders are a promising, yet often forgotten, force of change. At Cargill, we believe that advancing women’s leadership advances the sector at large. It’s time to make gender parity the norm, throughout the cocoa chain.  

Cocoa for a living: Cocoa is an important source of employment and income for rural populations, yet too many cocoa farmers do not earn a living income. Profitability for households depends on multiple factors, such as productivity, business skills, access to resources and farm gate prices, which all need to be taken into account. Access to tailored farm management coaching, finance, such as micro loans, and market linkages is key for a farmer’s business case and a crucial element of the Cargill Cocoa Promise. 

Looking ahead  

Sustainability is becoming an increasing driver for consumers who see their product choices as a reflection of who they are and what they value. Consumers want to see the issues they care about reflected in the brands they buy. Cargill’s proprietary research suggests consumers are hungry – and willing to pay – for products made with responsibly sourced cocoa. In a survey of more than 7,000 consumers across 10 European countries, we found 66% of consumers factor sustainability into their food and beverage purchase decisions, with an even higher percentage of frequent chocolate purchasers, nearly three-quarters, reporting they prefer to buy sustainable products. 

Companies like Cargill, while not consumer facing, have a unique role to play in enabling our customers to be successful. ”Together we can innovate to bring new products and solutions to market, and build trust with consumers,” Kate says. 

Climate and environmental degradation is the future. It will make cocoa farming even more marginal and exacerbate the social dilemmas in chocolate. “But it will also offer giant opportunities for an industry that could deliver net benefits to climate and environmental regeneration. At Original Beans, we run a nearly 100% climate-positive chocolate business in all three so-called scopes climate emissions. We protect precious forests. We pay our growers stable living incomes. It is possible and that’s the great virtuous promise of chocolate. To regenerate what we consume, as we put it in our company’s mission statement,” Philipp says positively. 

In order for effective partnerships to flourish, the sharing of learnings at an industry level will also be key. This will involve honest dialogue, and a profiling of successes and failures to ensure that cocoa farmers as a whole stand to benefit from improvements to their income, regardless of the specific trader, brand or retailer they happen to be selling into. 

Editorial contact:
Editor: Kiran Grewal kgrewal@kennedys.co.uk