Creating Africa’s Cocoa Cartel

Big commodity buyers do not usually pay their suppliers to produce something that they will never buy. Yet Nestlé, one of the world’s biggest chocolate-makers, is paying 10,000 cocoa farmers in Ivory Coast to do exactly that. Cocoa farmers’ woes are painfully clear in Ivory Coast, the world’s biggest producer. The country has roughly 1m cocoa farmers, who support about 5m people, or one-fifth of the population. More than half of Ivorian cocoa farmers and their families subsist on less than $1.20 a day. In Ivory Coast and Ghana, which between them grow about 60% of the world’s cocoa, some 1.5m children do dangerous work in cocoa-growing areas. Many of Ivory Coast’s forests have been destroyed to make way for cocoa trees. This is not the first time cocoa-producers have banded together. Attempts to form cartels and other price schemes began as early as 1945. Ivory Coast and Ghana hope that by enlisting other producers they will get more sway over the market. Nigeria and Cameroon are talking of joining copec, which would raise its share of production to 75%.

THE ECONOMIST