Introduction to environmental and resource economic

INTRODUCTION TO ENVIRONMENTAL AND RESOURCE ECONOMIC

TOPIC:  TENSIONS ON THE COCOA'S MARKET

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PLAN

INTRODUCTION

1. Social  and  Ecological  Problems  of  the  cocoa  market

1. Social  Problems  :  

• Low income and lack of infrastructure
• Working conditions

1. Environmental  Problems  :

• Deterioration  of  ground
• Culture  of  excess

1. An  unstable  market

1. Price  :  

• Inequality
• Instability

1. Imminent shortage:

• Sector in crisis         
•  Decline in exploitation

SUMMARY

REFERENCES

INTRODUCTION

The  whole  world  loves  and  consuming  chocolate,  it  is  often  associated  with  happiness  and  festivity.  But  cocoa,  the  main  ingredient,  is  often  produced  in  remote  human  rights  conditions.

Cocoa  is  an  extremely  important  source  of  income  for  many  farmers  and  cultivators.  Worldwide, some 5.5 million small farmers grow cocoa.  First  exporter,  Ivory  Coast  produces  about  a  third  of  the  cocoa  grown  in  the  world.  Ghana is second, with 20% of production.  Then come Indonesia, Nigeria, Cameroon, Brazil and Ecuador.

The  families  of  small  farmers  sell  cocoa  to  companies  which  turn  it  into  semi-finished  products  for  chocolate  manufacturers.  The  global  market  for  cocoa  processing  and  chocolate  manufacturing  is  dominated  by  a  handful  of  companies.  As  with  many  other  products,  the  value  created  throughout  the  chocolate  production  line  mainly  benefits  the  North.  Thus,  the  overall  production  costs  of  a  chocolate  bar,  only  6%  goes  to  the  South  (from  cocoa).

In  West  Africa,  in  regions  where  cocoa  is  grown,  the  situation  is  alarming:  low  incomes  and  uncertain  due  to  price  fluctuations,  unfair  working  conditions.  Many children are still exploited in cocoa plantations.

The  responsibility  of  the  cocoa  and  chocolate  industry  in  these  indecent  conditions  is  at  the  heart  of  the  debate,  because  of  its  market  power.  Instead  of  conducting  checks  on  their  supply  chain  and  to  take  measures  to  remedy  the  abuse,  chocolate  manufacturers  take  advantage  of  the  weak  state  structures  and  producing  countries  are  guilty  of  human  rights  violations.

1. SOCIAL AND ECOLOGICAL PROBLEMS OF THE COCOA MARKET

Cocoa  is  a  speculative  product,  like  many  raw  materials,  from  oil  to  banana.  But  the  price  of  raw  materials  is  not  in  the  hands  of  producers,  but  in  those  of  international  trade.  

1. Social Problems

• Low incomes and lack of infrastructure

Most cocoa farmers receive an extremely small part of the chocolate production profits. These incomes do not allow them to reach the two dollar poverty line per person per day. They live therefore in very precarious conditions.

The situation of farmers in Ivory Coast is particularly difficult: the life of Ivoirians has seriously deteriorated over the last twenty years - in 2012, the country ranked 168th on 195 in human development Index (HDI) of the United Nations. Civil wars and their aftermath have drained and dried up the rural market. Territorial conflicts continue to smolder, even after the last civil war, and corruption is still widespread. In parallel, the state collects high taxes which it forms an opaque use. These will probably not feed always the state budget.

Ivory Coast is not an isolated case. The families of small producers in other cocoa-exporting countries (eg Ghana, Nigeria or Cameroon) also live in great poverty. This is why the new generation often doesn't see the future in cocoa plantations and prefer to move to the cities or to concentrate on a more profitable agricultural sector.

Small cocoa farmers themselves mention the lack of infrastructure as one of their main problems. The very high taxes levied on cocoa exports are not a benefit to regions where it's growing. Public infrastructure is deficient. Many villages do not have access to a drinking water system and electricity supply. They are not accessible all year by road and find themselves in isolated and private of health care.

• Dangerous working conditions

Planting cocoa, harvesting and fruit processing is done by hand. The working conditions in cocoa plantations are weak and pose risks to the health of those who work there. These people rarely have health insurance:

•  Back problems due to carrying heavy loads - growers and cultivators bear fruit on the back,
• Breathing problems and skin diseases due to the lack of protective clothing against pesticides, which the children are also exposed,
• High risk of injury when opening the cocoa fruit with machetes,
•  Migraines often because of long working hours.
• Low level of education

A solid basic education is essential for small cocoa farmers to organize themselves and improve their flexibility in the negotiations. Now, as they often do not know how to read or write, they have more difficulty to organize themselves to negotiate with buyers.

Besides the lack of schools, low level of education of families of small cocoa farmers is explained by their economic and social situation. To survive, families make their children work, instead of to go to school. In addition, the large cocoa harvest often falls during the school year.

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