The income of a cocoa farmer, per chocolate bar

The matter about the low income for farmers in the cocoa industry is widely discussed. We will have a look at this topic from a caribbean-european perspective. We will make a calculation with the current market price for cocoa farmers in Grenada and looking at a typical bar of milk-chocolate in europe.

We know that the Grenada Cocoa Association pays 1.50 XCD per pound of wet cocoa beans in 2015. That means the farmers pick the cocoa pods from the tree, open the pod and take out the beans.  These beans are sold to the  cocoa association. There it will be fermented an dried, during this process the cocoa beans loose about 30% of weight. Hence, one pound of wet cocoa is approx. 0.7 pound of dried cocoa.

Now, let's calculate what this means for a standard bar of milk chocolate in european supermarket shelfes, which contains about  30% of chocolate.

One bar of milk chocolate 100g

=

30g of dried cocoa

=

43g of wet cocoa

=

0.1 pound of wet cocoa

=

0.15 XCD revenue  per bar for the cocoa farmer = 0,06 USD = 0,05 EUR

This blog from makechocolatefair.org states that the percentual infome per bar ist stagnation. We think this is quite suprising since the worldwide cocoa supply is scarce.

The farmer provides 30% of the raw material and get's about 5 percent of the sales price. If that is fair or not is hard to say,  taking into account that  it is still a long way from the bean to the bar and into the supermarket shelfes.

But this raises an interesting question: Compared to the other raw material providers of a typical chocolate bar, milk farmers and sugar providers, is the six percent a good value? I will start thinking about this, but not answer it in this post.

Still, the absolute revenue for the cocoa farmers is not satisfying. What can they do to increase their turnover?

There are three ways to increase the income: 

1. Go organic. 

In Grenada, you can sell wet cocoa for 2.50 XCD instead of 1.50 XCD per pound when your land has an
organic certification. That is a huge difference!
But what is the cost of that?
There is a three years process to get the certification.  For three years in a row, the land will be visited by an inspector. He will check wether no pesticides have been used during that time.
Grenada farmers don't use much pecticides anyways. Usually they just spray the ground to prevent the weed from growing too fast. But nothing is applied directory onto the trees. Therefore it is not a long way to become organic.
To sum up, the certification process costs some money and the manual labor for cultivating the land will increase, but the revenue will be significant higher. The demand of organic beans is very high at the moment.

2. Dry the cocoa

The cocoa assiciation buys dried cocoa as well. The farmer gets around 3.75 XCD per pound in 2015.
But there are three thinks to keep in mind:

1. One pound of wet cocoa is not one pound of dry cocoa, but merely 70% of the weight of the wet cocoa.
2. The drying process takes space and time. The beans are spread on drying floors. They must be raked on a regular basis and quickly covered when rain starts. Therefore it is necessary to have some spare space, to build a proper drying facility and to always have somebody close by to protect the beans from the rain. 
3. Not to forget, the fermentation is before the drying. I could not explain it better than this blog post. The fermentation is a complex process and crutial to the quality of the coca. Manufacturers of high quality chocolate will not buy chocolate beans with inconsistent fermentation processes.

3. Do your own thing

There are various ways of getting a bigger peace of the cake by taking more steps of the value added chain into your own hands.
After fermenting and drying the cocoa, the farmer can create a product and sell it / export it. This, of course, requires. knowledge, patience and machinery.
And in case you are wondering why we aren't suggesting to sell the cocoa to other organisations than the cocoa assosiation; well it is illegal.  Doesn't sound like a free market and it isn't. But this is a whole new story.