Cocoa (Theobroma1 cacao) is harvested primarily for its purplish beans, which are used to create cocoa liquor, butter and powder, the primary ingredients in chocolate. The origins of the crop are rooted in the Americas, where the Mayans and Aztecs consumed the beans in the form of xocolatl, a cold chili pepper–flavoured cocoa drink. Today, however, most of the world’s cocoa is produced in Africa (72 per cent in 2012), specifically in Côte d’Ivoire and Ghana, which alone account for 58 per cent of global production. Cocoa is unique in that it remains a major agricultural commodity produced almost entirely by smallholders.2 Cocoa is harvested by 5 to 6 million cocoa farmers worldwide, and between 90 and 95 per cent of the production is from smallholders on 3 hectares of land or less (World Cocoa Foundation (WCF), 2012) (see Table 7.1).
In 2012, 4.1 million metric tons of cocoa beans were produced in more than 50 countries on 0.2 per cent of the world’s agricultural land, for a total export value of US$8.4 billion (Food and Agriculture Organization of the United Nations (FAO), 2013). This is a small fraction of the total value of the chocolate market, estimated at more than US$83 billion.3 Due to the concentration of large cocoa buyers and in some cases taxation and fixed low payments to farmers by national cocoa marketing bodies or other intermediaries, farmers may receive as little as 40 per cent of the world market price (Ryan, 2011). In addition to poverty, however, child and forced labour, deforestation, pesticide use and biodiversity maintenance are all important sustainability issues facing the sector. Major sustainability standards active in the sector include Organic, Fairtrade, UTZ Certified and Rainforest Alliance. Together, these standards certified an estimated 22 per cent of the world’s cocoa production in 2012 (see Figure 7.1),4 of which about one-third was sold as compliant (accounting for 10 per cent of global exports). Côte d’Ivoire, Ghana and the Dominican Republic supply the vast majority of the world’s cocoa compliant with a voluntary sustainability standard. Figure 7.2 breaks this down by voluntary sustainability standard.
1. [From Greek: “food of the gods.”]
2. [According to one industry expert cocoa is one of the few crops that is cheaper to grow in smallholder rather than plantation systems (Ryan, 2011).]
3. [As a general rule, the total value of the global chocolate market is approximately 10 times that of the value of the cocoa market itself. For example, the value of the chocolate market was estimated at US$75 billion (figure cited by Paul Davis, Federation of Cocoa Commerce Dinner, May 2009 [Ryan, 2011]) in 2008 at a time when cocoa bean exports were worth US$7.6 billion. The total value of the global chocolate market was estimated at US$83 billion in 2010 and is forecasted to grow to US$98.3 billion by 2016 (MarketsandMarkets, 2013).]
4. [This figure is adjusted for multiple certification. Globally, the minimum amount of certified production, assuming 100 per cent overlap in every country, is about 14 per cent. To make the multiple certification adjustment, there is an assumed 50 per cent overlap in each country, which roughly falls in line with available data. Forty-four per cent of UTZ Certified cocoa was double-certified as Rainforest Alliance or Fairtrade in 2012 (UTZ, 2013c).]