University of Manchester Beyond Fairtrade: Chocolate companies & socially sustainable cocoa sourcing Stephanie Barrientos University of Manchester s.barrientos@manchester.ac.uk

Research Questions Why are companies mainstreaming socio-economic sustainability and fair trade in the value chains? Changing profile of cocoa-chocolate value chain Socio-economic challenges in cocoa farming How are chocolate companies addressing challenges of socio-economic sustainability in cocoa? Concluding Remarks

World Cocoa Producing Countries Cocoa is the strategic raw material for Chocolate manufacturing grown 8° north and south of equator. Cocoa: IDPM, University of Macnhester

Changing Global Cocoa-chocolate Value Chain Dismantling Cocoa Marketing Boards - SAPS 1980s Concentration of Chocolate confectionary industry Production – Fragmentation 70% from W. Africa – 90% smallholder farmers Decline Quality (except Ghana – COCOBOD) Price volatility and secular decline (-13% 1993–2005) Market segmentation: niche, quality, volume Future growth in Chocolate Demand in South Average rate of growth 2 -3%, BRICS much higher (8-10%) Estimated 2020 cocoa shortage of 0.5 m tons + (Amarjaro)

Challenges to socio-economic sustainability (Ghana) Profile: ageing smallholder farmers (51 years) Low yields (40% of potential) Poverty (Mean per capita daily income $0.42 cocoa alone, $0.63 from all sources) Child labour Poor social infrastructure (water, health, schools, transport) Youth aspiration - to leave cocoa Risk to long term socio-economic sustainability of cocoa sourcing

Promoting socio- economic Sustainability in Cocoa Responses on child labour Harkin-Engel Protocol Industry/IUF/NGO initiatives (eg. ICI) Government plans (eg. Ministry of Manpower Ghana) Growth of Certification Schemes Fairtrade, Rainforest Alliance, Utz Company-civil society Initiatives: Farmers’ and cooperative group support - companies (including Kraft & Cargill) + NGO Care (since 2006) Cocoa Partnership (Cadbury/Kraft) Founded 2007 - UK£45m Alliance with civil society organisations (north and south) Nestlé Cocoa Plan (2009) Gates Foundation (2009) with World Cocoa Foundation, GTZ, Mars, Hershey, Kraft etc. – cocoa and cashew programme Africa ICCO est. 60 producer initiatives

Kuapa Kokoo Cooperative of

Concluding Remarks KEY FINDINGS KEY RECOMMENDATIONS Value chain (dis)articulation: companies v. producers Sustainable cocoa supply no longer assured Development shift at producer level KEY RECOMMENDATIONS Rebalance value chain – companies, certifiers, trade Building capabilities at grass roots - stakeholder initiatives (inc. government, donors, NGOs, TUs) Vision - farmers and workers organised and empowered as productive value chain actors

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