According to the Cocoa Barometer, a biennial report published by a global network of non-governmental organizations (NGOs) and trade unions, regulations are needed to end poverty, human rights abuses and deforestation in the cocoa sector. 

The report comes after top producers Ivory Coast and Ghana stated in a letter that they will be cancelling cocoa sustainability schemes which U.S.-based chocolate maker, Hershey runs in their countries. The cocoa producers also accused the company of trying to avoid paying a cocoa premium aimed at combating farmer poverty. However, Hershey responded that it is fully participating in the scheme to pay West African farmers a living wage and will continue to do so.

After two decades of voluntary interventions that have produced minimal impact, the report calls on governments of major consuming nations to introduce laws that hold companies accountable for environmental and human rights abuses in their supply chains.

According to the report, a fair price for cocoa farmers is crucial and chocolate companies must find a way to deliver this is by making farmer income a key part of their sustainability schemes. Current schemes make use of auditors who certify cocoa as ethically sourced, allowing companies to market their chocolate as such and charge a premium for it. This has created a volatile earning structure for farmers within the cocoa ecosystem.

While chocolate manufacturers derive high profits from cocoa, cocoa farmers only receive a fragment of the world market price for beans. This is largely due to local trading structures, taxes and also the quality of the beans – a report shows. 

Within the global value chain, most of cocoa’s revenue is derived after the beans have reached the West, leaving cocoa farmers and workers across Africa to survive on less than $1.25 daily.

As chocolate companies continue to compete for higher market shares and  profits, millions of cocoa farmers bear the costs by getting little to no share from revenue generated. The report indicates that in 2014, the total global retail value sales of chocolate confectionery reached 100 billion dollars, an increase of 20 billion. 

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