Volatility in the chocolate market has increased the price of commodities, but has it increased the revenue of small-scale cocoa farmers as a result? The Ivory Coast is home to an estimated 7 million people dependent on the cocoa industry, yet political unrest in the region could leave them without income. Alassane Ouattara is the internationally recognized winner of the November election in the Ivory Coast, after 10 years of civil unrest. Yet, Laurent Gbagbo refuses to step down from power. As part of Ouattara’s strategy to out Gbagbo, he ordered a month-long halt on cocoa exports, causing skyrocketing cocoa prices and increased division among Ivory Coast residents.
The ban was scheduled to end February 23rd. Some officials state that agricultural companies never observed it in the first place, while others claim to have been severely affected by the stop in the market. Cargill and other US and European companies are believed to have observed the ban, causing Gbagbo supporters to openly claim they are seeking new buyers in China and Russia. Gbagbo’s people claim the ban was both unenforceable, and irrelevant since foreigners depend on the cocoa, coffee, and rubber from the area.
The small-scale farmers tell quite a different story. A cocoa farmer in Petit Pedro reports having a bumper cocoa crop this year, yet without means to store the cacao beans, they are toeing a dangerous line between surviving and bankruptcy. Black market men are working cocoa farmers to buy the beans for half the price and illegally export the commodity through Ghana, Guinea, and Liberia. Activists tried to help the farmer’s cause and the political tension by boycotting chocolate, yet the impact was marginal and the internal unrest has risen in the Ivory Coast.
Companies like Cafédirect have resorted to diversifying their suppliers to better protect their company from future market volatility. Although they admit this can never truly be avoided, they turned to a small community to both help a new community and better protect their assets, for their new instant hot chocolate. São Tomé is an island state in West Africa where the criollo bean, a rare and highly prized cacao bean, grows plentifully. After two years of infrastructure investments and relationship building, Cafédirect has increased the cocoa crop farmer’s income by 500%. They have input the infrastructure for the farmers to harvest and ferment their beans so they are ready for the international market, without the middlemen. For the São Tomé farmers, this is a sweet beginning, and for the Ivory Coast farmers, a bitter taste of politics.
This level of infrastructure investment and relationship building may help Ivory Coast cacao bean farmers going forward, as they navigate the political minefield that hinders their crop exportation and marketplace stability.