Behind the wrapper: Poverty, Inequality and deforestation in every bite

By: Samarveer Singh; Edited by: Shagun Khetan

If you are a chocoholic, you ought to know the bitter truth behind your sweet chocolate bar. That delicious square of joy might be hiding more than just caramel. Ever wondered what really goes into making your favourite treat? Every bite of chocolate carries a hidden cost that is far beyond its price tag. Behind the glossy packaging and innumerable flavours the cocoa industry is built on economic hardships, volatile prices, unsustainable practices and climate challenges. The rise of ethical consumerism has forced major chocolate brands to rethink their sourcing strategies. Companies like Ferrero and Nestle have introduced Corporate Social Responsibility (CSR) initiatives, pledging to improve wages and reduce deforestation for sustainable production. But are these efforts truly making a difference, or are these just branding exercises?

Economic Challenges in the Cocoa Industry:

Cocoa farmers around the world work under gruelling conditions; on average, they just earn 6% of the final value of a chocolate bar.

Let’s explore the lives of cocoa farmers through the examples of two countries: Ivory Coast and Ghana, the two largest producers of Cocoa in the world. Ivory Coast hosts about 1 million cocoa farmers that support a population of about 5 million. However, these farmers are not rewarded in the same way; their average wage for a day in Ivory Coast is less than $1.2. A typical cocoa farming family in Ghana with six family members and up to four hectares of land earns an average income of $191 per month, against $395 per month required for sustenance.

Besides low wages for cocoa farmers, there is another ingrained issue facing the cocoa industry: gender inequality. Female cocoa farmers perform an essential role in the industry by forming a significant share of the labour force and play a key role in the process of maintaining the quality of cocoa, which is one of the critical stages in cocoa production. Women constitute 25% and 68% of the labour force in Ghana and Côte d’Ivoire, respectively. Studies have indicated that in Ghana, the retailers tend to buy cocoa from women as compared to male farmers, as female farmers produce a higher-quality cocoa than men because of their careful early crop care and fermentation. Yet women farmers in Ghana face gender inequality not only in terms of low payments but also social issues that restrict them from the markets and prevent them from earning a sustainable income for themselves. In Ghana, women are disadvantaged in earning land rights, which restricts them from participating in the production of cocoa. Research indicates that women only comprise 20% of cocoa farm operators, and their land holdings on average are half the size of men’s and are less fertile. Women's lack of land ownership in Ghana prevents them from being recognised as a “formal” cocoa producer, restricting access to economic services provided by the state to landowners. If women had the ownership of their own cocoa farms, then it would be easier for them to have access to credits for inputs, allowing them to have their own bank accounts and access to training for further improvement. There also exists a kind of social bias in Ghana where tasks associated with women tend to be paid less than those assigned to men.

The bitter cost of chocolate:

Roughly 70% of the world’s total cocoa beans grow in West Africa. Cocoa farmers usually clear tropical forests to plant new cocoa trees rather than growing cocoa on the same land and reusing it. In Ivory Coast, this practice has spurred a massive scale of deforestation, with estimates suggesting that about 70% of the country’s illegal deforestation is linked to cocoa production.

The above graph was obtained from a study conducted to derive the impact of cocoa production in Ivory Coast and Ghana on deforestation in protected areas. Cocoa farms make up about 13.8% of the land area in the Ivory Coast and about 11.4% of Ghana. In this land being used for cocoa plantation, about 30% of the farms in Ivory Coast and 7% in Ghana were planted in protected areas reserved for the forest, creating disruptions in the biodiversity of the region. This has caused extreme levels of deforestation in both countries, leading to about 37% of the forest loss in protected areas of Ivory Coast and about 13% of the forest loss in Ghana. The heavy loss of forests in Ghana and Ivory Coast is posing a risk not only by disturbing these countries' ecological balance but also threatening other countries in Africa. Experts fear that the increased loss of forest area in these two countries could push cocoa production to other countries in Africa, like Cameroon and Liberia. This could harm the ecological balance of other countries, thereby leading to deforestation in many of these countries. A study has suggested that in Democratic Republic of Congo cocoa farms have already started contributing to deforestation.

Sweet promises or bitter truths?

In a report published in 2023 by the Ethical Consumer Organisation, some of the major named chocolate companies like Nestle, Mars and Ferrero were classified as “inadequate” when it comes to sourcing cocoa production. Some of the key reasons were the presence of child labour, unequal pay to farmers and unjust profit distribution. Majority of the world’s cocoa is produced by farmers in West Africa, however as discussed, they earn extremely low unsustainable wages from this production. Nestle responded to the claims made by the UK-based organisation that the report has ignored the company’s sustainability efforts. The report highlighted that the CSR schemes implemented by the companies only cover a portion of the company’s cocoa suppliers and do not benefit the cocoa farmers who are suffering from low and unsustainable wages. Ferrero also refuted the claims made in the report, calling the claims “outdated”, highlighting that some of the companies mentioned in the report are not part of the Ferrero group. The company underlined its commitment to its cocoa sustainability programme, which involves securing sustainable livelihoods, increasing the wellbeing of women and children and helping protect the environment.

The claims in the report were also refuted by other major chocolate brands like Lindt, Mars and Mondelez. Though these companies have highlighted their sustainable initiatives, the question remains whether their actions have actually provided fruitful results. The studies that were quoted in this blog conducted by independent organisations, and the data reveal that the case is otherwise; the cocoa farmers continue to suffer from unsustainable living standards exacerbated by low incomes for their households, and the environment continues to suffer from large-scale deforestation while the chocolate companies continue to profit.

Conclusion

Despite the sweet taste of chocolate, a dark truth underlies its production that consumers rarely acknowledge. The cocoa industry, built on impoverished labourers in West Africa, where meagre wages and systemic gender inequality have hindered progress. Even as global cocoa prices soar, the benefits rarely reach the hands of the farmers who are key to the production of this sweet. Unsustainable farming practices have led to rampant deforestation, further compounding environmental degradation and putting the ecosystem at risk.

Efforts by major companies to address these challenges through corporate social responsibility and ethical sourcing have sparked debate on whether such measures are genuinely transforming the supply chains or are just mere branding exercises to influence the consumers. The bitter truth is clear: the chocolate industry stands at a critical juncture, where widening economic disparities and ecological crises demand bold steps to pave the way for a sustainable future. As ethical consumerism is on the rise, it is worth asking: whether you, as a chocolate consumer, will continue to savour the flavour of your favourite treat when its price is not just monetary but in human and environmental cost too?