Like Wages for Chocolate

Exploited by capitalists of the West, some farmers of Africa may eventually be tempted by the Chinese communist model or even worse, radical Islam as their ideology, says Humphrey Hawksley, a BBC correspondent and the author of “The History Book,” as he presents a case study of cocoa production in African countries. With stagnant prices of cocoa in international commodity markets, the real earnings from farming today are not enough to provide basic necessities of life for Africa’s poor. The chocolate industry tries to acquit itself by pointing to the invisible hand in the pricing of raw materials, but the slave children working relentlessly are bound to see Western democracies as the source of their deprivation. Stubborn about re-setting the minimum-price ceilings, the free-market right threatens the future of liberal democracy in Africa. – YaleGlobal

Like Wages for Chocolate

Failing to pay living wages to African farmers growing cocoa risks turning them against the West
Humphrey Hawksley
Tuesday, August 21, 2007
Bottom of the supply chain: Ivory Coast child farmers Marc and Fabrice Kwame (both 12) get 60 cents for a kilogram of cocoa. (Photo: Humphrey Hawksley)

SOUFRE, IVORY COAST: In recent years the question of Africa has shifted from a moral and humanitarian challenge to a strategic one. Since the end of the Cold war in the early 1990s Africa has relied mostly on the free-market system for its economic development. But the continent has slipped backwards, and the UN estimates that between now and 2015 the number of those workers living with their families on less than US$1 a day will actually increase by 20 percent.

While the causes are multiple, alternatives to the Western democratic model are beginning to push their way through. Economically powerful, yet authoritarian China offers its own definition of human dignity which, it maintains, should be measured not by holding elections but by dragging people out of poverty. And extreme Islam spreads an inspirational anti-Western doctrine designed specifically to draw in the poor.

Almost half a century ago, Africa found itself similarly courted as newly independent nations chose between the ideology of the West and that of the Soviet Union. In 1960, Harold Macmillan, then British prime minister, declared that “winds of change were sweeping through Africa.” He argued that one of the great issues of the 20th century was whether the “uncommitted peoples” of Africa would swing away from the Western powers.

Now, his latest successor, Gordon Brown, has taken up the baton. Addressing the United Nations July 31, Brown spoke of “the dignity of individuals empowered to trade and be economically self sufficient.”

A key difference between 1960 and now is that half a century ago the commodities such as cotton, cocoa and coffee were largely seen as a source of wealth for Africa. Now because of globalization of media and the rise of non-governmental organizations, they have come to be seen as a symbol of exploitation.

Many multinational corporations stand accused of taking huge profit while those who farm their raw products become poorer.

African poverty, therefore, has become a test for economic globalization. One of its pivotal concepts is that whether you work in Shenzhen, China, sewing jackets, or in Soufre, the Ivory Coast, farming cocoa, you can improve your standard of living by hooking up to the international supply chain.

Globalization based on supply chain is an outgrowth of the economic systems of Western democracies. Therefore, its failure to deliver becomes the West’s failure, too. A reversal requires a sea change of thinking from big business.

One example of the link between globalization and African poverty is the chocolate industry that accepts the use of child labor to farm cocoa, chocolate’s raw product. Children are kept out of school and forced to work on farms to meet the world’s craving for chocolate and profit-drive by the multinationals. Some are sold as child slaves, but most are put to work because cocoa farmers are too poor to hire adult labor.

Down a barely passable road, about two hours drive from the town of Soufre, Sanogo Lamine, 70, said he had been growing cocoa for more than 30 years. In his first harvest, in 1974, he was paid 300 West African francs, about 60 cents, a kilo. This year, his cocoa beans sold for exactly the same – 60 cents a kilo.

When he began farming, Lamine saw a bright future. Now, his extended family barely makes a subsistence living. Of his seven children, three have gone to the cities to try to earn enough for the family to survive. Had the cocoa price kept pace with inflation, members of his family could have earned enough to build proper houses, go to college and progress from generation to generation.

Instead, they live in mud huts and remain illiterate.

When asked how much he needed to live on, Lamine totted up the present-day costs of farming equipment and fertilizers. “About three times what we are paid now,” he replied.

That figure roughly matches the 325 percent increase of US inflation between 1974 and 2007, a rise that would be reflected in the wages, marketing costs and product price in selling a bar of chocolate. The benefits, therefore, reach almost every stage of the supply-chain stage except the farmer himself.

The industry does not reveal its total annual revenue, but it’s thought to be between US$50 and $70 billion. According to some independent estimates, an allocation of between 0.5 and 1 percent of revenue would be enough to ensure community development such as the building of roads, schools and clinics.

It should be delivered not as aid, but in the price actually paid for the cocoa, which would, as Brown put it, speak toward the “dignity of individuals empowered to trade.”

Yet this is precisely what the chocolate industry refuses to do.

When challenged about cocoa prices, the industry claims helplessness because prices are dictated by unpredictable international commodity markets. It cites free-market doctrine with an ideological fervor comparable to that of Red Guards waving Mao Zedong’s Little Red Book – as if minor reform to the commodity markets would ruin Western life as we know it.

The Ivory Coast produces almost 50 percent of the world’s cocoa and derives 90 percent of its foreign earnings from the trade. From independence in 1960, under the pro-Western authoritarian regime of President Félix Houphouët-Boigny, it became a jewel of Africa. The president ensured cocoa prices did not drop below a minimum level and many Ivorians felt secure and prosperous.

Houphouët-Boigny’s death in 1993 coincided with the post-Cold War call for free-market democracy – and with the removal of cocoa price guarantees. This led to increased poverty and ethnic tension exploited by new and weaker leaders. By 2000, the Ivory Coast was heading for civil war.

Having put their trust in Western trade, millions from the Ivorian cocoa belt and tens of millions elsewhere in Africa feel let down. They see themselves at the bottom of an international supply chain that refuses to spread wealth to the poorest and weakest. It is only natural that they seek alternatives.

Similar feelings were prevalent in 1940s China, 1930s Germany and turn-of-the-20th-century Russia. The alternative systems that took control then shook the world.

Today, a confident China bankrolls bad government in the Sudan and Zimbabwe and in the scramble for natural resources, has aspirations to control politically uncommitted swathes of the African continent. Extreme Islam has taken grip in Somalia, Nigeria and beyond and creeps toward cocoa farms of the Ivory Coast.

While inflexible thinking about state control over the economy by the hard left contributed to the collapse of communism, it may be the inflexibility of the free-market right that threatens the future of Western liberal democracy.

The chocolate industry could set an example by taking steps to move away from this fraught course. They could at least ensure that the income of those farming cocoa is enough for a family to live on.

Humphrey Hawksley is the author of “The History Book,” a novel about corporate social responsibility. His film on the cocoa industry, “Bitter Sweet,” is broadcast on BBC World.

© 2007 Yale Center for the Study of Globalization