Widespread poverty, forced labour, child labour, gender inequality and deforestation are all persistent problems in the cocoa sector. Cocoa grows in only 22 countries, as it is a tropical plant that only grows in hot and humid regions near the equator. In total, about 14 million rural workers directly depend on cocoa for their livelihoods. Over 60% of all cocoa comes from Côte d'Ivoire and Ghana and is produced by 2.5 million farms. On these farms, 1.560.000 children work under illegal conditions.
As is the case with the banana industry, a handful of companies have most of the power and profits of the cocoa industry. Voluntary agreements such as the Harkin-Engel protocol aim to improve these companies' standards, in the case of the Harkin-Engel protocol mainly in relation to (forced) child labour. However, these voluntary agreements do not prove to be very effective, as child labour is still a persistent problem in the cocoa industry.
Cocoa was the fastest-growing fair-trade product in 2017. There were 263.825 certified fair-trade farmers and 263 certified producer organisations in 2017. The number of fair-trade producer organisations increased by 39% since 2016. Moreover, cocoa sales increased by 57% in volume to more than 214,000 metric tonnes (MT). Certified fair-trade cacao farmers benefit from a Fairtrade Minimum Prize and a Fairtrade Premium.
New fair-trade cocoa initiatives, such as Tony's Chocolonely and the bean-to-bar movement aim to go a step further than Fairtrade. Tony's Chocolonely uses five sourcing principles (traceable beans, a higher price, strong farmers, improved quality and productivity, and long-term commitments) to enable cocoa farmers to earn a living income and to eliminate modern slavery. Tony's shares these sourcing principles with other chocolate companies in their 'Open Chain' to help them change their supply chains. Bean-to-bar chocolatiers often use 'direct trade' to buy their cocoa directly from cooperatives, which means that they have to pay less for intermediaries and can pay farmers more for their cocoa.
Fairtrade International, Monitoring the Scope and Benefits of Fairtrade: Cocoa – 10th Edition (2019).