C for Chocolates

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Out in the markets today, florists and chocolate shops were seen doing brisk business...tomorrow, after all, belongs to them - its Valentines Day.

The rush for tiny bits of sweets packaged like jewelery brings to mind a nagging old question: why is it that West Africa produces over 70% of the worlds' cocoa, and yet, it is the Swiss and Belgians who take all the credit for making the finest chocolates?

In 1957, when Gold Coast became an independent country called Ghana, it supplied two-thirds of world cocoa. Today the largest exporter is another West African country - Côte d'Ivoire - but still, Ghana continues to hold the second position at 379,000 tonnes (1997/98). And the irony is that even while companies like Meiji-Japan maintain a brand-line of chocolates named "Ghana", its customers are assured (on the wrappers) that a fraction of the retail-price is being sent back to Ghana... as charity.

Why does the second-largest producer of cocoa need charity from chocolate manufacturers?

A part of the answer is that cocoa producing countries are poorly governed, leaving their agriculture-commodity traders rather disorganized. Gervase (2000) points out that it was the planters in tropics who did the most to reduce returns from cocoa exports, through misguided attempts to force up prices in the short term.Their governments worsened the problem through harmful policies which included:

...failing to protect the forest, favoring estates, allowing labor coercion, discouraging savings, restricting immigration, allowing cartels, and interfering in marketing. Over and above all this, many governments taxed heavily and indiscriminately, while failing to provide essential public goods.

Ghana, in fact, figures as a typical case where, in addition to all the above problems, ethnic and tribal rivalries (Akan-Ashanti) killed the proverbial goose that laid golden eggs. Now the country just figures on chocolate wrappers while international commodity traders rake in all the profits.

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REFERENCES / LINKS

• Federation of Cocoa Commerce - http://www.cocoafederation.com/education/produce.jsp
• Easterly, William (2002). The Elusive Quest for Growth (MIT Press)
• International Cocoa Organization (ICO) - http://www.icco.org/
• Gervase, William Smith-Clarence (2000). Cocoa and Chocolate, 1765-1914, Routledge-London (preview on Google Books)
• World Bank - Ashanti Region Cocoa Project (2000)
• Richard Asante & E.Gyimah-Boadi (2004). Ethnic Structure, Inequality and Governance of the Public Sector in Ghana. UNRISD.
• Fair-Trade International - Cocoa. http://www.fairtrade.net/cocoa.html