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Potentials for Improving the Socioeconomic Situation of Ghanaian Cocoa Farmers: The Role of Sustainability Initiatives

Hannes Grohs / Jan Grumiller / Andreas Peham

Wien, March 2023

Based on a longstanding colonial history of unequal exchange between the Global North and South, cocoa-based products and in particular chocolate nowadays belong to the staples of household consumption in many countries of the Global North, including in the European Union (EU). But only since the late 1990s has a public debate emerged that raises critical questions about the economic, social and ecological sustainability of cocoa production in the producer countries, located mostly in Africa and Latin America. Civil society organizations in particular raised the issue of child labor in cocoa bean cultivation, the low income of cocoa-producing smallholders and the lack of social infrastructure, and started to exert pressure on companies. At the same time, chocolate-producing companies became concerned about declining cocoa production against the backdrop of strongly increasing demand. Since then, some 25 years have passed and the cocoa and chocolate sector has seen many initiatives aiming both to increase productivity, to tackle sustainability issues, and to enhance the quality of life of cocoa farmers and people in cocoa communities. According to a variety of studies and evaluations, achievements – especially when measured against the aspirations – so far have delivered mixed results at best. Particularly critical voices even speak of two decades of failed interventions. Civil society initiatives, but also many corporations have increased their advocacy for the introduction of binding public rules with respect to the due diligence responsibilities of companies active in the cocoa-chocolate global value chain (GVC). Given similar problems in many other global value chains (e.g., in textiles & apparel, coffee, palm-oil etc.), an initiative for the introduction of a Europe-wide due diligence regulation has recently resulted in a legislative proposal on corporate due diligence by the European Commission, presented to the public in February 2022. With the discussion on the legislative proposal still ongoing at the time of writing this report, the legislation will undoubtedly have important consequences for the cocoa-chocolate GVC. An assessment of the successes and failures of initiatives to promote the sustainability of the cocoa-chocolate GVC with the aim to identify key conclusions and recommendations might thus be both timely and useful for the current policy discussion on binding rules for corporate responsibility in global value chains.

Based on an overview of both the global cocoa-chocolate value chain and the specifics of the cocoa industry in Ghana as well as the associated sustainability issues, this report provides a comprehensive review of sustainability initiatives in the cocoa-chocolate GVC initiated during the last 20 years with a specific focus on the socioeconomic situation of cocoa farmers and their communities in Ghana. The review includes both civil society and private sector-led initiatives, as well as state-led initiatives, both in Ghana as one of two major global producer countries and in the EU as a major global consumer. On the basis of this overview, we then proceed to assess the relative successes and shortcomings of the initiatives. We point to limitations, while also identifying best-practices and promising developments. In methodological terms, the assessment is based on expert interviews and a literature review. The report concludes with four recommendations.

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