The structural problem

70 per cent of the world's cocoa comes from West Africa. The majority of this cocoa is produced by millions of family farmers with small plots of land and low yields. For example, the cocoa producers we work with in Togo cultivate around 1.5 hectares of land and achieve yields of just under 400 kilos per hectare.

Given these conditions, it is impossible to earn a living wage at the current price of cocoa – even fair trade prices. Accordingly, the people who grow cocoa live in deep poverty. The consequences of this poverty: illegal forest clearance for more cultivation area, widespread use of pesticides for higher yields and often child labour.

To learn more about what these farming practices mean and who sets the price of cocoa, read our blog post: The value of cocoa

No law is holding corporations accountable – yet

The counterproposal to the Responsible Business Initiative has been in force in Switzerland since 1 January 2022. It requires companies to submit a sustainability report. But there are no consequences for violating this law.

Things may soon be different in the EU. The European Commission adopted a proposal for an EU-wide law on due diligence in February 2022. Its aim is to ensure that companies comply with human rights and environmental standards.

This proposal is inspired by the Swiss Responsible Business Initiative but goes even further in some respects. For example, it requires a European supervisory authority to handle enforcement and ensure compliance with the directives. Moreover, it calls for corporations to be held accountable for offences committed by their suppliers.

However, the proposal has not yet passed into law. The European Council, Parliament and Commission need to debate the draft, amend it and ultimately jointly adopt it. This is where things get difficult.

The Council, composed of ministers from the EU member states, announced its proposed amendments to the future law on 1 December. These amendments create loopholes in the law that allow companies to evade legal responsibility for clear misconduct. For example, the Council proposes that, in future, EU member states should be able to decide individually whether or not the financial sector will fall under the new law. Furthermore, companies that produce pesticides will not be held liable for any damages caused by their products.

The Trialogue, in which the European Parliament, Council and Commission will determine the final legislative text, is due to begin in the spring. This agreement process is expected to take three to six months, depending on how quickly the three institutions can come to an agreement.

Cocoa at gebana

We've calculated that the price of cocoa would need to be around double the current market price to improve the living situation of family farmers. The problem is that no one wants to buy such expensive cocoa wholesale.

Using our gebana model, we supplement this regular price that everyone who buys fair trade and certified organic cocoa on the market pays. This model provides family farmers with a direct share of the revenue. In the case of Togo, this means that certified organic family farmers receive 10 per cent of the final retail price of our chocolate.

In the interest of fairness, we pay this additional premium to all organic family farmers and not just to the 15 families that actually supply the cocoa for our chocolate. We buy 180 tonnes of cocoa per year, but we only use around 7 tonnes to produce our own chocolate. The rest of the cocoa is sold to wholesalers.

So when you buy chocolate from our online shop, you are already giving the family farmers a much better deal than, say, buying fair trade chocolate in the supermarket. But this price is still too low. For our gebana model to really make a difference in Togo, we need to sell a lot more chocolate and get wholesalers on board. The good news is that we've already started to make inroads. Find out more in our blog post The rocky road to fair chocolate.

Order chocolate made with cocoa from gebana Togo