A cocoa pricing agreement designed to protect farmers in Côte d’Ivoire and Ghana from destitution is being circumvented by multinationals, the main buyers of cocoa beans. The US multinational Mondelz, for instance, was recently accused of paying a negative country differential. Last year another US firm, Hershey, bought from futures exchanges to avoid paying the differential and other companies are changing their buying patterns as well. Cocoa is the plant from which chocolate is made. Côte d’Ivoire and Ghana together account for 65% of global cocoa production, but farmers in these two countries earn less than 6% of the chocolate industry’s total revenue. The cocoa bean value chain has five major segments. The first is cocoa bean production, which involves local farmers. The second is sourcing and marketing, which involves local and international traders and exporters of cocoa beans and semi-processed products. The third is processing, which involves grinders and chocolate manufacturers. The fourth is distribution, which involves retailers. And finally, there are the consumers.
SOURCE: THE CONVERSATION
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