The emergence of the child labor issue in West African cocoa economies coincided with the historical low of cocoa prices at the end of the 1990s. While there are other factors that contribute to child labor, poverty is a significant part of the problem. Yes, there are cultural predispositions, but they are not sufficient in explaining the entire phenomenon, especially in light of alternatives for children, i.e., schooling. So dealing with child labor means addressing poverty. There is no way around that.
Once we accept that, all kinds of possible strategies emerge. One simple solution would be to increase the price farmers receive for their crop. Unfortunately, that is not easy in countries where the internal cocoa market has been completely liberalized – CÃ´te d’Ivoire, Nigeria, for example.
In Ghana, on the other hand, the farm gate price is set by the Cocoa Board, so the government does have control over the price farmers receive. Interestingly, the current presidential candidate for the National Democratic Congress, John Evans Atta Mills, has promised to reintroduce the 70% rule if elected. As Modern Ghana reported on May 16, Mills told cocoa farmers that the percentage of the world market price given to farmers had slipped from 70% during the current administration.Â But even in Ghana, the world market price is still the standard that determines everything else and the industry is, of course, quick to point out that it does not control the world market price.
One exciting option for poverty reduction that focuses on ending child labor is the Minimum Income for School Attendance Initiative jointly developed by the International Labour Organization and the United Nations Conference on Trade and Development. Â The program is rather straightforward and offers a cash grant to families conditional upon their children attending school a specified number of days per month. The program achieves two goals at once. It reduces family poverty while at the same time increasing educational achievements of the family’s children.Â
At a minimum, the cash grant reimburses the family for the direct and indirect cost of sending children to school. Given the opportunity cost of schooling – the family has to pay school fees and the income of the child is no longer available to the family – MISA has a direct impact on increasing school enrollment. But the grant can also be increased to achieve poverty reduction effects beyond the opportunity cost of schooling.Â
The positive experiences in Latin America (Brazil and Mexico) show that the impact of the program goes even further. MISA creates a push for better educational services in areas that are traditionally under serviced.
There is little doubt that such a program would have a significant impact on child labor in West Africa. The ILO estimates that schooling cost per student cost for families are more than twice the public expenditures per student. In other words, families pay twice the amount to send their kids to school than the government does. Yet, a bare-bones MISA program implemented in 22 African countries would cost only $721 million per year and result in an increased enrollment of 6.3 million children.Â
Here is an opportunity for the chocolate industry to put its money where its mouth is. The industry could underwrite a MISA program just for the families in the cocoa sector in Ghana and the CÃ´te d’Ivoire and have a direct and significant impact on the issue of child labor. The industry already offers benefits other than wages to its employees. All that is required is that the cocoa farmers are seen in the same light. It’s cheap and, with the help of the ILO and Ghanian government, could be implemented in a short period of time.Â
- Child Labor in West Africa: Roads not taken – Part 1
- Speculation and Cocoa Prices – again