Fair Trade Cocoa in Ghana

The fair trade movement came out of a desire to sustainably support farmers through livable wages, reduce child labor, and address environmental factors – among many other admirable goals. Ghana, one of the worlds top producers of cocoa, began implementing fair trade practices in 1995. However, it wasn’t until later that multi-national chocolate companies began to see the increasing demand for fair trade chocolate. Due to this increase in demand, from 2009-2014 the share of fair trade cocoa produced by Ghana jumped 6%, with Ghana holding 38% of the market share of fair trade cocoa worldwide.

Cocoa farmers are at the beginning of the supply chain, and fair trade practices are intended to benefit them. However, these intentions often fall short. The increase in costs of production to fair trade cocoa farmers is not equally balanced out by an increase of wages. Fair trade cocoa has a set price floor, yet from 2008-2019 the world market rate for all cocoa never fell below that floor price. This means fair trade cocoa farmers had increased expenses while experiencing no advantages to being certified fair trade.

In response, FairTrade sought to increase the price floor by $400/ton, but Ghana and the Ivory Coast proposed a $600/ton increase to the price floor for all cocoa sold. Since this increase would apply to all cocoa farmers, there is still little personal incentive for cocoa farmers to become fair trade certified. Until price advantages can be established, using fair trade to address climate change and child labor will have to drive the farmers to participate in fair trade cocoa.