Bitter Chocolate

The cocoa embargo initiated by Ivoirian farmers (see my earlier post) has come to an end. The action itself probably did not push traders and exporters to pay farmers the suggested minimum farm gate price, but the action has certainly slowed down the delivery of cocoa to Ivoirian ports.

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Last week, the Payson Center of Tulane University published its second annual report evaluating public and private initiatives to combat the worst forms of child labor in the cocoa sectors of Ghana and the Côte d’Ivoire. These reports are produced under a contract with the U.S. Department of Labor.

The report concludes that

• Children in the rural areas continue working in cocoa production and in other agricultural and economic activities, some as young as 5 years of age.
• A large percentage of the children working in cocoa report involvement in hazardous work and injuries while performing agricultural tasks, including the use of tools and equipment, carrying heavy loads, and exposure to environmental hazards. Some children are also involved in spraying pesticides and in the application of other chemicals. Some of these activities have been classified worst forms of child labor by the Governments of Côte d’Ivoire and Ghana.
• There is little evidence of the unconditional worst forms of child labor in the cocoa sector – child trafficking, forced labor, etc. – as a percentage of the population. However, there is evidence of child trafficking to Côte d’Ivoire from neighboring countries.
• Of note in the Tulane’s population-based survey of Nov/Dec 2007 was that the vast majority of children in the cocoa-growing areas – 95% in Ghana and 98% in Côte d’Ivoire (weighted data) – do not report exposure to any intervention projects in support of children in the rural areas. While these children may still benefit from interventions indirectly and without their knowledge, these percentages are low enough to merit further field validation (Second Annual Report, page 10).

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I reported a couple of weeks ago that the new management committee for the cocoa sector in the Côte d’Ivoire set a new indicative price of CFA700 ($1.48) per kilogram for the 2008/09 cocoa season. That represented a forty percent increase over the indicative price of the previous season. I also reported that this indicative price is not a mandatory price. That is, traders and other middle men can pay more or less depending on the quality of the cocoa and market conditions. But that’s not how Ivorian cocoa farmers see it.

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Last week, the committee that has taken over the management of the cocoa sector in the Côte d’Ivoire took a first step toward reform. The committee decided to lower the one of the cocoa levies from CFA25.26 to CFA 10.06 per kilo. The proceeds of that levy were used to fund the three cocoa agencies at the center of the corruption scandal.

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The 2008/09 Ivorian cocoa season began five days late due to the reform efforts that are to weed out the corruption in the cocoa sector. The management committee that now runs the key cocoa sector institutions opened the season on Sunday and also set a new indicative farm gate price of CFA700 ($1.48) per kilogram for the next quarter, up from CFA500/kg during the past quarters.

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