Ghana Grows Our Cocoa, So Why Can’t It Make Chocolate? | Big Business

ghana is the world's second biggest producer of coco but the country only earns about two percent of the hundred billion dollar industry cocoa growers here export most of their cocoa beans to europe and north america where they're turned into chocolate we are shipping out the cocoa in its raw state and if you look at the value chain of cocoa money is made in the finished product while big chocolate companies rake in billions a year many cocoa farmers live in poverty earning just two dollars a day and ghanaian entrepreneurs like michael have struggled to open chocolate factories in their home country we are trying to decolonize chocolate this time around we are saying that it can be done right here in ghana now the government is funding efforts to grow a domestic chocolate industry but can ghana's entrepreneurs get a bigger share of the profits we visit a cocoa farm and processing plant to find out ghana together with ivory coast grows over 60 of the world's cocoa the countries sell to all the big chocolate companies from hershey's to mars to nestle which process the beans abroad in mostly europe and north america paco your friend joseph bacha amaya coco farming for 18 years ago joseph grows 11 acres of cocoa and it isn't easy farmers battle more extreme weather due to climate change plant disease and fatigued land every october he and his family begin harvesting the yellow pods it takes just four days semi joseph collects the pods and takes them to the breaking ground here workers crack them open and remove the beans by hand joseph uses the leftover pods as compost under his trees joseph then dries the beans for another week in total he packs 75 bags of beans a year his income is about 27 a day it's a high wage for a guinean farmer because joseph grows organic cocoa without pesticides but many farmers in ghana live at or below the poverty line earning less than two dollars a day that's because the majority of farms are small and aren't certified organic according to christy a cocoa scholar nicknamed the doc of chalk we were talking about really small plots and this is part of the reason why cocoa farmers are so poor but that's not the only reason farmers make so little coco's been armed in ghana for over 100 years there are many parts of the country where the land is really fatigued now and the trees are old in the 15th and 16th centuries portugal and spain monopolized cocoa controlling production and trade from their colonies in latin america and the gulf of guinea europe's elite were the biggest customers the crop arrived in what's now ghana in 1876. around the same time the british declared the southern region a colony and began invading north locals own and ran all the small farms but the raw product was exclusively exported to europe a lot of what we know today as like contemporary chocolate really grew out of this this trading relationship between ghana and britain including the flavor of chocolate itself although ghana gained its independence in 1957 its one-way cocoa trade with europe still exists today and it's kept farmers at the beginning of the supply chain in poverty for generations to help raise farmer wages ghana and its neighbor ivory coast teamed up in 2019. the two largest cocoa producing countries in the world and so when they get together on something everyone has to pay attention they introduced the fixed price system which set a price floor for coco in 2020 ghana set the price floor at twenty six hundred dollars a metric ton that included a four hundred dollar premium added to every ton of coco and this value goes directly to the farmers the premium is called the living income differential or lid it was the first of its kind in the chocolate industry and it meant farmers took home nearly 30 percent more money than the year before at first big chocolate companies agreed to pay the lid you can't really not buy ghanaian and ivorian cocoa so the big buyers really had no choice the lid's markup may seem like a lot but the millions it's raised to combat farmer poverty is a fraction of big chocolate makers sales but soon after it launched reports surfaced accusing hershey's of buying cocoa without paying the premium it's sad to to note that these companies who have the resources and may not want to abide by this simple appeal in an email to business insider the company said hershey supports and is fully participating in the living income differential when the corporations do pay the lid has helped farmers it's pushing farmers to even increase their yield that's how come last year were able to hit a record 1.2 million tons of beans after farmers dry the beans they're bagged up about 70 of these beans will be sent overseas ghana processes only 30 of its cocoa beans domestically but in 2020 at a press conference in switzerland the president announced he wanted to change that we intend to process more and more of our cocoa in our country with the aim of producing more chocolate ourselves and he said it right in front of the top commerce ministers of switzerland one of ghana's biggest customers that statement in in switzerland caused a lot of controversy i must say he clearly mentioned our intentions to put in efforts to also add value within ghana to support cocoa processing inside ghana the government created a free zone outside across any factory operating inside gets a tax break floyd ashley runs niche cocoa industry in the free zone in the freezer enclave you are getting 10 years free duty on your imported parts for equipment so it gives you the opportunity to also increase capacity niche has become ghana's second largest cocoa manufacturer the company says it processes ten percent of the country's cocoa a niche processes two tons of it an hour the cocoa beans arrive here from farms all over rural ghana workers stack the bags high then cut them open one by one the beans funnel into this grate on the floor and the rest of the process is controlled digitally from roasting the beans to grinding them into cocoa mass that's then sent to get mixed with milk and sugar and from there it comes here for a different process a cooling process and then a packaging process mitch has been pretty successful but for small companies outside the free zone it hasn't been as easy to get up and running hello michael runs farah freak a cocoa maker that opened in amanasi to be closer to cocoa farmers but since it's outside the free zone it didn't get the tax breaks berafrik also had trouble buying cocoa beans as shocking as that may sound you know it's really hard in ghana to procure cocoa beans another hurdle keeping ghana's chocolate industry from taking off well it's very hard to make chocolates in ghana for one there's no dairy industry anybody producing chocolate in ghana is definitely importing large volumes of milk from either europe or other continent chocolate makers also have to import sugar mostly from brazil and finally it's hot in ghana chocolate by its nature is very sensitive to temperature any rise in temperature may cause the chocolate to melt there's not the kind of cold chain that you need to distribute chocolate effectively within ghana or you know much of west africa and building out that cold chain has been expensive we have used insulated building materials for some sections of our building some sections of the building is completely insulated roofing sheet also ghana's power grid is sometimes unreliable electricity for example is another issue here although there's power it's never stable fairfreak's top sellers are finished chocolate bars inside temperature controlled rooms this machine pumps the chocolate into molds so our installation capacity is 10 000 bars of chocolate every hour that's a fraction of what a hershey's or mars factory can do this machine wraps the chocolate bars with 68 workers the company's scaling up to produce 50 million bars a year the practice has always been that the raw materials are sent to europe for processing but this time around we are saying that it can be done right here in ghana but christie says the country still has a long way to go definitely no silver bullets for sure when you have a whole system like colonialism it doesn't shift quickly while there are five times more processing facilities in ghana today than a decade ago most only process cocoa into intermediate products like cocoa butter cocoa mass you know cocoa liquor cocoa powder not to chocolate 96 of niche's business are these intermediate products most of the finished bars are still made abroad we need to increase the export of cocoa in a summer finish and also in the finished state lloyd wants to create demand for finnish chocolate within ghana cocoa consumption is very very low in africa i mean compared to europe where you have an average five kilograms per person consumption you're talking about 0.4 in africa that's because historically finnish taco bars had to be imported from europe so they cost a lot to create new demand in ghana niche is making a chocolate drink lloyd hopes to sell in schools he also hopes to source ingredients from inside africa dairy from egypt and sugar from south africa to train talent in ghana farrah freak started this lab and hired locals to develop new flavors and for farmers advocates want to raise the cocoa price floor to about 3 100 a metric ton and they want big chocolate companies to foot more of the bill nearly every big chocolate producer has programs set up to lift farmers out of poverty but by some estimates 73 to 90 of ghana and ivory coast cocoa farmers are still below living income standards if you're the ceo of these big companies it's time to come down and look at these yourself as the industry is set to grow about five percent in the next six years canadian cocoa farmers and processors are vying for a larger stake in the big business of chocolate cocoa companies can we also be allowed to add value it will be changing the lives of the people that play real rules and growing the beans [Music] [Music] you

Channel: Business Insider

Views: 2,735,087

Keywords: Business Insider, Business News, Cocoa, Ghana, Chocolate, Europe, Cocoa bean, Africa

Id: 5X7wAKMNBXI

Length: 12min 30sec (750 seconds)

Published: Sun Mar 20 2022