The critical missing info here is that governments in both places set the cocoa price that farmers can sell at so that they can borrow against coca futures. The government buys up all the cocoa and acts as middle man and faux cartel. They know farmers will produce at least a certain amount no matter what, and so they try and guess the rate during harvest, and then borrow against it.
So when they guess wrong on global prices during harvest or production levels, or when they accidentally over-steal from the loans, or get a bad rate from some large bank, they end up cutting the rate to the farmers, because now they need to pocket the difference between what the farmers sell at and the global price per ton to pay back the loans. Except that governments are increasingly bad at this game (IMO, through negligence), and climate change is hitting the fringes of the coca growing areas.
Farmers are the only ones getting screwed here. Well, farmers, and then the children that many employ at slave wage levels in order to meet the margins on all the cocoa trees they have and can’t just replace with another cash crop.
threaded - newest
i was like yay cheaper chocolate
noo not like this!!
Why don’t we grow our own Cocoa? FNQ has the climate for it.
we do a little: www.abc.net.au/listen/programs/…/106009506
but basically cocoa (and iirc coffee bean) farming requires lots of super cheap labour, and we are thanks to our mining industry just too expensive
The critical missing info here is that governments in both places set the cocoa price that farmers can sell at so that they can borrow against coca futures. The government buys up all the cocoa and acts as middle man and faux cartel. They know farmers will produce at least a certain amount no matter what, and so they try and guess the rate during harvest, and then borrow against it.
So when they guess wrong on global prices during harvest or production levels, or when they accidentally over-steal from the loans, or get a bad rate from some large bank, they end up cutting the rate to the farmers, because now they need to pocket the difference between what the farmers sell at and the global price per ton to pay back the loans. Except that governments are increasingly bad at this game (IMO, through negligence), and climate change is hitting the fringes of the coca growing areas.
Farmers are the only ones getting screwed here. Well, farmers, and then the children that many employ at slave wage levels in order to meet the margins on all the cocoa trees they have and can’t just replace with another cash crop.