The Gates Foundation Discovers Cocoa Farmers

With much fanfare, many news outlets announced the decision by the Bill and Melinda Gates Foundation to donate $23 million to the World Cocoa Foundation. The usual supporters of the WCF have pledged to chip in a similar amount in the form of cash and in-kind contributions bringing the total up to $40 million. That’s a lot of money and more than has been spent on cocoa in West Africa by the industry since the Harkin-Engel protocol was signed in 2001.

Bill Guyton, President of the WCF is quoted as follows: “We know from experience that cocoa can play a significant, positive role in improving farm family incomes in the developing world. However, many cocoa farmers today lack the practical knowledge and organizational support needed to grow this unique crop profitably and sustainably. Thanks to our new partnership with the Bill & Melinda Gates Foundation, we will be able to dramatically expand our efforts to reach these farmers in West Africa and to promote economic and social development as well as environmental conservation in cocoa-growing communities.”

And here is Dr. Rajiv Shah, Director of Agricultural Development at the Bill & Melinda Gates Foundation: “Agriculture offers powerful pathways out of poverty, but without access to knowledge, tools, and markets, millions of smallholder farmers – most of whom are women – aren’t able to prosper from their land and labor. We’re excited to support this partnership, which will create opportunities for these farmers to sustainably boost their incomes and lift themselves and their families out of hunger and poverty.”

So we are back to the ignorant farmer model. The reason farmer income is low lies with their own ignorance of the modern ways of doing things. If we teach them, they will become more efficient, produce more cocoa, earn more money and live better lives.

If it were only this simple.

Here are some questions apparently not asked when this donation was negotiated:

Why are cocoa farmers in poverty in the first place? Historically, they have not been. As a matter of fact, during the 1970s, cocoa farming was a very profitable career. What happened? Why is it that cocoa today only fetches about 36% of what it fetched in 1979? Might that have something to do with the poverty of cocoa farmers? But apparently, blinded by the light of science, the people at the WCF and the Gates Foundation can’t see that question.

Can the world market absorb the output of “millions of farmers” who are now extremely productive? Of course not.  More efficiency will mean lower cocoa prices. Why else would the chocolate industry put its money into this project.  The unspoken subtext, clearly revealed in the recent comments to my earlier post, is driving “marginal” farmers out of the cocoa sector, leaving the “modernizers” in charge of a much more concentrated and efficient system.

So the goal is not to lift millions of farmers out of poverty, but to modernize and rationalize the West African cocoa sector so that fewer, efficient farmers can guarantee cheap cocoa for the chocolate industry.

So what will happen to those who can’t make it in cocoa? Surely no one can reasonably expect them to find employment in the industrial sector as proposed by one commenter. That sector has been evicerated by the structural adjustment programs of the 1980s and 1990s. I guess they will end up selling TIGO or MTN phone cards in the markets of Accra and Abidjan.

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2 thoughts on “The Gates Foundation Discovers Cocoa Farmers

  1. Johan van Schagen

    Mr. Niemann,
    I agree that a focus on the livelihoods of cocoa farmers – that you note to be of 36% when compared to 1979 – is important. I do not agree with the suggestion you make that this would be a result of investment in enhancement of the internal capacities of the business that is cocoa farming (and increasingly in the South, processing). Rather it was a product of corrupt regimes and IMF/World Band liberalization policies that together destroyed any form of price protection for farmers.

    In addition, I agree with you that the top-down presentation of the B&MG Foundation is overtly simple (I do hope stewardship of the investments is at least shared in some degree) – you call it stigmatization as ‘ignorant farmers’.
    Ironically, you later deny ‘marginal’ cocoa farmers the capacity (capacity in which additional investments will be made!) of using newfound infrastructure and skills to diversify their portfolio of activities, possibly vertically (downstream processing) but more importantly horizontally (with new types of crop).

  2. Michael Post author

    Thanks for the comment. Actually, I don’t imply that improved productivity _has_ been the reason for the decline in prices for the simple reason that there hasn’t been much improved productivity in the past decades. I agree that the IFI policies had a significant negative impact in prices. The other reason has been the expansion of production into regions that were not large producers–like Indonesia the 1980s. That’s extensification, not intensification.

    Also, I don’t deny that “marginal” farmers have the capacity to do many things, I just don’t believe that the image of farmers moving to the manufacturing sector is a likely development for the very reason that the IFI policies have decimated that sector.