Chocolate vrs. Cocaine: Colombia’s Struggling Cacao Industry

Colombia has suffered extreme levels of violence for decades. Drug lords, leftist rebels, rightist paramilitaries and government troops are constantly engaged in disputes, while 4 in every 5 casualties are civilians or bystanders. Since the conflict began, over 220,000 people have been killed, making Colombia one of the most violent countries in Latin America.

Nevertheless, throughout the ongoing conflict, many of Colombia’s agrarian economies have been growing rapidly, with farmers working hard to gain access to global markets. While Colombia comes in third as the worlds leading supplier of high quality coffee beans, an agricultural sector that continues to grow, the country only contributes to a fraction of the global cacao exports. Given that Colombia is one of the few regions in the world that has a climate suitable for growing cacao, along with many government-sponsored programs which aim to support cacao farmers, it would seem plausible that more farmers should be taking advantage of the rising global demands for raw cacao, especially given that the demand will only increase in the future. In fact, recent studies have estimated that by 2020, there will be a 1 million metric ton global chocolate deficit.

Yet, the amount of cacao produced by Colombian farmers is still considerably less than their neighbors in Ecuador and Brazil, and programs to encourage farmers to take up cacao farming in Colombia, including lucrative tax incentives, have faltered over the past decade. Cacao is not unknown to Colombians, and the raw product is used to make chocolate is enthusiastically consumed domestically in Colombia. The raw cacao or locally made chocolate can be found in every community throughout Colombia and it has been enjoyed in region for centuries, and Colombia chocolate manufacturers have a distinct presence in the local economy.

luker choc
Chocolate produced by the Colombian company CasaLuker

The reason most often cited as the cause of the lagging cacao industry has been at the center of trade agreements and security talks between the United States and Colombia for decades. Namely, that the cultivation of the coca plant, the raw material used to make cocaine, is economically more attractive to Colombian growers than cacao. However, the explanation for why Colombia’s cacao industry is failing to take off is much more complex. Rather, the true impediments are more closely linked to the global structure of international trade and security that have created the conditions for Colombian farmers to prefer planting coca instead of cacao.

Coca cultivation does not require the time commitment and investment that growing cacao does: it grows in direct sunlight, does not required the type of biodiversity and shaded environment that the cacao tree does, it can be harvested in as little as six months, and it is more resistance to disease than the cacao tree. Besides being one of the foundations of the illicit drug market, coca also causes major deforestation in Colombia because of the slash and burn techniques employed to clear land to plant it, leading to growing concerns over environmental degradation.

Joint projects run by the U.S. and Colombian governments have sought to encourage cacao farming instead of coca cultivation by funding cacao production to replace illicit operations. The Colombian government, with assistance from the United States and the United Nations Office on Drugs and Crime, has funded new cacao plantings on over 58,886 hectares in the country over the course of a decade. While these programs have been marginally successful, the production of illicit coca has increased regardless, with export quantities estimated to have increased by 44% in 2014.

A U.S. government security program, offered as an aid package dubbed “Plan Colombia” has dedicated substantial financial resources (surpassing billions of dollars since the 1990’s) to combat the coca industry in Colombia, which is currently supplying the majority of the raw material for the global cocaine market.

Plane fumigating crops in Colombia.

In 2002, the United States expanded the plan with sponsored aerial fumigation of coca crops. This pesticide mixtures (containing glyphosate), paid for by the United States and delivered using U.S. aircraft, successfully kills the coca plants on contact.

However, these two combined drug war policies, namely the efforts to expand the cacao sector and the aerial fumigation, have managed to cancel each other out, and the policies have contributed to large scale damage to human life and agriculture in Colombia. Besides killing legal crops planted near or downwind from what is suspected to be illicit coca plants, glyphosate is also considered to be carcinogenic to humans, and communities have reported cases of blindness, miscarriages, sickness, physical deformities, and cancer.

fumigation damage to cacao
Cacao damaged by fumigation. Source: CPT International

In particular, the arbitrary spraying has considerably damaged the nations cacao sector. The pesticides not only kill off the vegetation that create the biodiversity crucial for the germination, growth and maintenance of cacao trees (Presilla, 96), it also contaminates local water supplies and is significantly detrimental to soil fertility. Further, the fumigation efforts have targeted small farms and rural regions, areas where over 90% of Colombia’s cacao is grown. Testimonials from small farmers confirm the dangers of the pesticides, and the resulting damage has left many farmers with no other choice but to abandon their farms.

For example, in Putumayo, the cacao trees have ceased to produce fruit and in the San Juan River basin of Chocó, entire crops of cacao trees were completely destroyed. In Guaviare, the very same cacao trees that were funded by the anti-drug programs were destroyed by the fumigation. Reports of damaged and destroyed cacao trees continue to emerge, with fears of that the long term spraying over the course of the past decade may have irrevocably damaged agricultural production in the areas that have already been sprayed.

caco damaged
Cacao damaged by fumigation. Source: Advocacy for Human Rights in Latin America

In August of 2015, the government of Colombia voted to cease fumigation because of the substantial health associated risks to people, livestock and crops, despite protests by United States officials who continue to urge the Colombian government to continue spraying. Both American and Colombian advocates of fumigation are continuing to press the Colombian government to resume spraying, citing that the pesticides are not detrimental to human health. Further reports state that even while the government has pledged to halt spraying, at least temporarily, due to public protests, farmers continue to report fumigation over their land. Even while the Colombian government has seemingly suspended aerial fumigation, other efforts to eradicate coca plants on the ground continue, including localized burning and hand-sprayed pesticide application. These efforts contribute to the destruction of both the biodiversity and the small farms that are crucial to cacao cultivation. Startling reports of contaminated products also raise concerns over pesticide contamination in the cacao that does manage to survive, which could damage Colombia’s slowly growing repertoire as a quality cacao grower.

However, these programs, though immensely destructive, are not the only barriers that cacao farmers in Colombia face. Colombia’s economy is largely dependant on agricultural exports, but the structural impediments of global market make the agricultural sector highly unpredictable and difficult to access for small farmers. The structure of international trade has historically been unfair towards countries situated in the Global South, with richer countries trapping less developed countries in unfair trade agreements that favor the market interests of the Global North (Sylla, 30-43).

In 2011, the U.S. pushed through a trade agreement with Colombia that left Colombian farmers at a significant disadvantage. The agreement allows the U.S. to flood the Colombian market with subsidized agricultural products at such low prices that local and small scale farmers cannot compete with. Because of this agreement, 400,000 farmers stand to lose between 48%-70% of their income over the next few years. Further, the trade agreement allows U.S. companies to import their finished goods into Colombia duty free, while barring similar goods from entry into the United States by tariff escalation schemes. In other words, the more processed a material is, the higher taxes the exporter must pay when exporting finished products out of Colombia.

Further, these raw products have the highest levels of price instability on the global market, and these fluctuations, “can sometimes have a devastating effect on production and income” (Sylla, 39-40). The price of cacao on the global marketplace depends on supply and demand, and the price of agricultural products has been steadily decreasing since the 1960’s as global consumption has increased. As farmers struggle to produce more cacao to meet the growing demand, the prices will only continue to fall. Since 90% of cacao comes from small farms that are between 2-5 hectares, fluctuating market prices have an even greater impact on cacao farmers, who often are unable to recover from sudden drops in market prices.

With the new trade agreement, local companies in Colombia, such as Nutresa and CasaLuker, which once absorbed 80%-90% of local cacao production (Oxford Business Group, 195), now face substantial local competition from the major candy manufacturers, who are able to market their chocolate products at lower prices than the national brands. Companies such as Hershey, Cadbury, Nestle, Mars and Ferrero, dubbed the “Big Five,” account for the majority of the global chocolate market and have considerable control over the chocolate industry (Allen, 21). Small businesses cannot match the the resources and efficiency of these larger chains, and they are often integrated into these multi-national conglomerates. This concentration of the market in the hands of only a few companies further decreases the power of the cacao growers to negotiate fair prices and standards, who currently only receive between 3%-6% of the retail price of the finished product.

With overall global cacao production down due to disease, farmer attrition, and issues stemming from climate change, and with a looming cacao deficit in the near future, Colombian farmers have the opportunity to fill the growing demand. But with the current damages already incurred by the long-term use of pesticides, and the possibility of continued air fumigation, along with the unequal trade partnerships with major developed countries such as the United States, the Colombian cacao industry has been substantially impeded from gaining any ground. Since the U.S. flooded Colombian markets with cheap agricultural products, most farmers cannot rely on traditional crops to make a living, and the current volatile state of the cacao market is not an attractive alternative. Until fair trading standards are established between Colombia and the United States, and the chocolate industry develops a modicum of income stabilization for cacao farmers (Gibson, 26-32), the cultivation of coca will continue to be the only means of survival for the majority of Colombian farmers.

Works Cited:

Allen, Lawrence L. Chocolate Fortunes: The Battle for the Hearts, Minds, and Wallets of China’s Consumers. New York: American Management Association, 2010. Print.

Gibson, Jason. Consistently Inconsistent: Addressing Income Volatility Among Cocoa Producers in Ghana and Côte d’Ivoire. International Institute for Sustainable Development. May 2007. Accessed May 3rd 2016. Available Online. 

Oxford Business Group. The Report: Colombia 2014. London: Oxford Business Group, 2014. Print.

Presilla, Maricel E. The New Taste of Chocolate: A Cultural and Natural History of Cacao with Recipes. Berkeley: Ten Speed, 2001. Print.

Sylla, Ndongo Samba., translated by David Clément Leye. The Fair Trade Scandal: Marketing Poverty to Benefit the Rich. Athens: Ohio UP, 2014. Print.

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