The government of Ghana says it is committed to implementing and adhering to the European Union Sustainable Cocoa initiative. Speaking at the Qatar Economic Summit ahead of the law coming into effect, the president of Ghana Nana Addo Dankwa Akuffo Addo said the government is doing its best to address some of the issues that have been raised by the European union.
The sustainable cocoa initiative was passed into law and came into effect at the end of June. The law will ensure that agricultural commodities including cocoa are not grown on deforested land. Further, the law seeks to protect minors by policing and rooting out child labor in the supply chain.
“Several meetings have taken place in Accra and Brussels to explain the topography of the Ghanaian industry. We are confident that the allegation of child labor forms the basis of our policy in Ghana. When the legislation is enacted, we will meet the requirement but there is a lot that still needs to be done for us to enjoy the full economic benefit of our cocoa beans.”
The objective of the law is to promote ethical practices up the agricultural value chain while protecting the environment and curbing labor abuse. According to Bloomberg, the law is trying to cut down on harmful environmental practices. It seeks to protect the farmers and the environment. However, the new changes will come at a cost which will likely be passed on to the consumers.
The new law builds not only on responsible business practice but also decent income for cocoa farmers. While cocoa is a 110-billion-dollar industry, Ghana and ivory coast who produce 65 percent of the world cocoa beans do not make up to 10 percent revenue. Farmers in the respective countries make less than 6 percent of every chocolate bar sold.
To address the financial inequality at the international market, Ghana and ivory coast initiated a dialogue aimed at increasing the price of cocoa beans. This process led to an agreement with Traders and Cocoa Industry on the Living Income Differential, a 400USD/t premium paid on top of the price on future markets. However, farmers in Ivory coast are yet to see the new prices reflect on their bottom line.
“I am angry. We work hard. Even when the government set prices for cocoa, buyers do not respect it. These big groups steal from us. They do not respect the contracts and nether do they respect the farmers,” several farmers’ lament.
In hindsight, Alex Assanvo, Executive secretary Cote d’Ivoire Ghana cocoa initiative says until farmer poverty is addressed ethicacy in the value chain is wishful thinking. “Sustainability is not about deforestation. Any form of abuse up the value chain is because of poverty. That is what we need to address.”
In a bid to tap into the profitable chocolate industry, some local investors have taken it upon themselves to add value to cocoa beans and export chocolate products. According to the Co-founder of 57 chocolate, a local chocolatier in Ghana, value addition is the only way to ensure better returns for cocoa farmers and the economy. She says becoming a local chocolatier means fetching better prices for cocoa farmers, training local talent, and creating jobs for the youth.
With 18 months to fully implement and adhere to the sustainability law, Fiifi Boafo, the public affairs officer at Ghana Cocoa Board says the country will do everything to comply. “We must protect the environment. If you look at the geography of our country, cocoa production is within our forest zones. That is where the rainfall pattern is better. In situations where we cut down our forest, it will affect our production capacity.”
Deforestation is becoming a growing concern. Satellite maps of ivory coast and Ghana showed that cocoa production was linked to 360,000 of a total 962,000 hectares (37.4%) of the deforestation since 2000 of protected areas in Côte d’Ivoire. In Ghana, 26,000 out of a total 193,000 hectares (13.5%) of the deforestation was converted into cocoa plantations.