Securing higher prices for cocoa

The document assesses six policy options to raise cocoa prices and farmer incomes to combat poverty, deforestation, and child labour. It concludes that most trade-based interventions, such as export price regimes or import duties, are unsustainable in the long term due to risks of over-supply, reduced consumer demand, and WTO compatibility issues. The author identifies bilateral partnership agreements as the most promising approach to create the governance and sustainability standards necessary for a comprehensive sector reform.

• Poverty among smallholder cocoa farmers in West Africa drives deforestation and child labour, with some households earning only 37 per cent of the minimum living income in rural Côte d’Ivoire as of 2018.
• The 'Living Income Differential' (LID), a premium of US$400 per tonne introduced by Côte d’Ivoire and Ghana in 2019, initially raised farmgate prices but faced challenges from falling pandemic-related demand and buyers switching to non-LID origins like Ecuador, Brazil, Nigeria, and Cameroon.
• Raising cocoa prices risks triggering a cycle of over-production and subsequent price crashes, as higher farmgate prices incentivize farmers to expand production areas or replace other crops.
• Consumer-country measures, such as import duties, are deemed highly unlikely because the UK and EU have committed to bound tariff rates of zero on cocoa beans under WTO rules, and such measures would harm the competitiveness of domestic processors.
• A consumption tax on chocolate products is more feasible than import duties as it avoids WTO bound tariff breaches and protects domestic processor competitiveness, though it may be unpopular with consumers.
• Bilateral partnership agreements, potentially modeled on the EU's FLEGT Voluntary Partnership Agreements, are identified as the most hopeful option to establish sustainability standards, improve governance, and implement national traceability systems.
• International commodity agreements (producer cartels) for cocoa are theoretically possible due to the high concentration of production in a few countries, but they are practically difficult because agricultural production is harder to regulate than oil extraction.
• The Economic Partnership Agreement (EPA) between the EU and West African states prohibits the introduction of new export duties or taxes, blocking this route for countries without centralized export price control.

APA

Brack, D. (2021). Securing higher prices for cocoa. ClientEarth. https://www.clientearth.org/media/un1bznfi/cocoa-price-and-trade-paper-duncan-brack.pdf

Chicago

Brack, Duncan. Securing higher prices for cocoa. ClientEarth, 2021. https://www.clientearth.org/media/un1bznfi/cocoa-price-and-trade-paper-duncan-brack.pdf.

Wikipedia

{{cite report |last1=Brack |first1=Duncan |title=Securing higher prices for cocoa |publisher=ClientEarth |date=April 2021 |url=https://www.clientearth.org/media/un1bznfi/cocoa-price-and-trade-paper-duncan-brack.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{brack2021securing, author = {Brack, Duncan}, title = {{Securing higher prices for cocoa}}, institution = {ClientEarth}, year = {2021}, month = apr, url = {https://www.clientearth.org/media/un1bznfi/cocoa-price-and-trade-paper-duncan-brack.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }