Why is it so difficult for poor countries to break out of poverty by extracting higher prices for raw materials like cocoa and controlling the supply chain?
It’s June, which means that we have the longest day of the year to look forward to this month.
The chocolate industry has been accused of more than keeping its adult farmers in poverty. As long ago as 2001, chocolate makers, including Mars, Nestle and Hershey, signed an agreement to eliminate child labor from their supply chains in Ghana and Ivory Coast where the problem is most acute. The determination of producer countries to squeeze more value from chocolate might appear to be putting them on a collision course with industry. Business logic suggests that manufacturers, such as Nestle and Ferrero, and trading houses, including Cargill and Olam, are not keen to pay more for ingredients.
A combination of self-interest and reputational risk is forcing manufacturers to clean up supply chains that are linked to grinding poverty, child labor and environmental degradation. Some, includingthat is the world’s biggest cocoa buyer, have cautiously welcomed the $400 premium. Companies say these efforts represent a step-change in their thinking. “It’s getting away from old-fashioned corporate social responsibility and creating real impact,” says Nicko Debenham, Barry Callebaut’s head of sustainability. He criticizes what he regards as the piecemeal certification programs. “We can’t just hit replay on what we’ve done and what other people have done. To create impact, we’ve got to do this at scale.
Debenham has been banging his head against the problem for years. Since 2016, he has been overseeing Barry Callebaut’s Forever Chocolate initiative. He describes it as the industry’s best effort yet to tackle structural problems that, he says, can be solved only by cooperation between governments in producer and consumer countries as well as nongovernmental organizations and the industry.
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