Ghana: Chocolate makers steadily record profits while cocoa producers barely earn a living

While world's biggest chocolate companies see their profits soar, they fail to keep their promises to improve the wages of the farmers who grow cocoa in Ghana, one of the main producing countries, NGO Oxfam denounced in a report.

In a report published Thursday (May 11) Oxfam said earnings for US companies Hershey, Mars and Mondelez in addition to Italy's Ferrero and Swiss peers Lindt & Spruengli and Nestle had increased since the onset of the pandemic in 2020, a period when inflation has skyrocketed.

The world’s four largest public chocolate corporations [Editor's Note: Hershey, Lindt, Mondelēz and Nestlé] together made nearly $15 billion in profits from their confectionary divisions alone since the pandemic broke. THis amount was up by an average 16 percent since 2020.

The giants paid out on average more than their total net profits (113 percent) to shareholders between 2020 and 2022.

At the same time, an Oxfam survey of more than 400 cocoa farmers in Ghana -- the second-largest global producer of the commodity -- found their net incomes had fallen by an average of 16 percent since the same period.

For women, the average drop was 22 percent, it added.

No big money for farmers

"There's big money in chocolate -- but definitely not for farmers," said Oxfam International's interim executive director, Amitabh Behar worded plainly.

"Cocoa farmers work extremely hard, under gruelling conditions, yet can't always feed their families."

The charity claimed that up to 90 percent of Ghanaian cocoa farmers do not earn a living income, "meaning they cannot afford enough food or other basics such as clothing, housing and medical care. Adding that "many of the 800,000 farmers in the country survive on just $2 a day."

The NGO also noted that while Ghana produces about 15% of the world's beans, it receives only about 1.5% of the sector's estimated $130 billion annual global earnings.

We 'do everything we can to help'

Giant Nestlé said that while it "cannot influence the farm-gate prices due to the cocoa-trade structure in Ghana" the company does "everything we can to help cocoa-farming families close the living income gap".

It told AFP that it strives also to help improve incomes for farmers in Ivory Coast, the world's biggest producer of cocoa.

Ivory Coast and Ghana, both located in West Africa, together produce about two-thirds of the world's cocoa.

Ferrero said farmers in the countries receive a cash premium on top of the commercial price for cocoa.

"We have been among the first companies to fully support the Living Income Differential (LID)," it said in a statement.

Ivory Coast and Ghana introduced the LID in 2019 to fight poverty among cocoa farmers in the global $130-billion chocolate market.

But their trade boards say the scheme is being undercut by buyers who depress the price of another premium based on bean quality.

Mars, which said it was the first major manufacturer to publicly support the LID, added that its direct financial support to cocoa farmers goes beyond the poverty-fighting initiative.

"We also work on diverse initiatives... with women and their families in cocoa growing communities to improve their livelihoods."

A Lindt & Spruengli spokesperson said its support also extended beyond LID to help improve farmers' earnings.

The group's own sustainability programme also offers extra cash or in-kind premiums as well as funds for local supply-chain actors and other measures to increase productivity.

Hershey meanwhile said it "has had a long-term commitment to supporting increased incomes for cocoa farming households".

The company said it was investing in education in cocoa growing communities, and wanted to "address the underlying factors that contribute to low farmer incomes.

Oxfam's Behar added on Thursday that chocolate giants needed "to put their money where their mouth is".

"They must rid themselves of their colonial legacy of extracting raw materials and keeping farmers in poverty while making astronomical profits for their rich shareholders," he added.

Mondelez was also approached for comment but have yet to respond to AFP.