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Chilld Labor in Chocolate

Chilld Labor in Chocolate

Hello and good day!

Is life fair?

In some ways, very much so. In other ways, not at all.

Consider the following.

 In the United States, on October 31st of every year, millions of kids put on costumes and walk around their neighborhoods asking neighbors for candy.

Across the Atlantic Ocean, on October 31st, in the African country of Ivory Coast, millions of kids sweat profusely under a harsh tropical sun, swatting away blood sucking mosquitos that carry malaria, hacking cacao pods off of trees and cracking them open with machetes for 16 hours.

October is one of the big cacao harvest months in western Africa.

One child does the labor.

Another eats the fruit of the labor.

What determines who does what?

Blind luck.

You are born where you are born.

Your parents are who they are.

You have no choice in the matter and those two things determine much of your life's trajectory.

I think it is important to stop here and consider the philosophical and ethical implications of luck being such an important determining factor in the outcome of a human life.

The first thing that comes to mind is gratitude.

If you caught the lucky break of being born to good and loving parents, in an economically prosperous and peaceful place, thank your lucky stars every single day.

You had nothing to do with that. It was an undeserved gift.

I believe that philosophical gratitude is a required accompaniment to good luck.

It is unhealthy to be proud of something you received through no effort of your own. It is self-delusion and deluding oneself snowballs easily.

The second thing that comes to mind is the ethical requirement to be charitable and correspondingly, the political necessity of social safety nets.

A lot of folks have the deck stacked against them through no fault of their own.

It is only right to even the playing field to the extent possible.

Charity and government handouts should be means tested of course, but I think you can logically reason your way into their necessity from the starting point presented above.

All that being said, each human being also has free will and gets to decide how they feel about their circumstances and how they will act in response to their given environment.

Along this path lies effort and accomplishment, the things which we all deserve to be proud of, because we were the ones who made them happen.

If you have two people who were both born into favorable circumstances, and one strives to achieve, while the other languishes in effortlessness, I think you will be hard pressed to show how the former owes any ethical obligation to the latter.

As such, in this direction is where the moral obligation for charity and the political necessity of a social safety net probably fizzles out.

This applies to chocolate in particular, shopping in general, and even more broadly to all money expenditures, because one of the ways in which we can satisfy our ethical obligations is through how we choose to allocate the resources under our control.

You can do any number of things with ten dollars.

You could buy cheap grocery store chocolate or make a donation to a charity that researches childhood cancer.

Acting ethically isn't always convenient. Sometimes it is a big sacrifice.

To the extent that you will yourself to act correctly, your action can be slotted under the category of things you made happen and therefore ought to feel proud of.

To hone in on chocolate and child labor.

It is important to understand that children have been working on family farms for time immemorial.

My 11-year-old son works the cash register in our chocolate shop. It's our family business and he is perfectly capable of doing the work.

Also, he loves it.

And we know from 15 years of firsthand experience that many cacao farm children enjoy chipping in to help out with farmwork.

There is a distinction between child labor and child slavery.

Very unfortunately, child slavery is rampant in Ghana and Ivory Coast, the world's two biggest cacao producing countries.

Kids are kidnapped or lured onto farms and kept there against their will, hacking open cacao pods all day, while kids in other countries are dressing up to go out trick or treating.

Understanding how and why something happens is not the same as justifying it.

There is no justification for kidnapping kids and forcing them to work against their will.

And conscientious people probably shouldn't spend money on products produced in this way.

Here is how and why it happens and why the situation is extremely intractable.

In the two biggest cacao producing countries in the world, farmers are required to sell their cacao at a government set price. The official rationale given is that this sets a floor underneath cacao prices.

In addition to setting prices, the government boards are also in charge of selling a limited number of licenses for the right to purchase cacao in their countries.

A hundred or so licenses are issued per year.

Think of that. Only one hundred buyers for 70% of the world's cacao.

To put that in perspective, we have tens of thousands of customers here at Fortunato Chocolate and we are a very small family business.

It was Lord Acton who said that power tends to corrupt and absolute power corrupts absolutely.

Who has the power there? The government boards.

How are they corrupted? By the license buyers.

They are corrupted first when deciding who should get a license.

They are corrupted a second time when it comes to setting prices.

License buyers are buying the licenses for one reason only, to make money.

As such, they want farm buying prices low enough to lock in guaranteed profits.

The prices that cacao farmers receive for their crop must always be low enough to permit profits at every step of the chocolate supply chain.

In the case of industrial chocolate, there are 8 or 9 players between customers and cacao farmers.

Every single one of them has to make money along the way.

That is the burden placed on most cacao farmers.

They carry the profit of 8 or 9 other players on their backs.

Since the price per kilogram that a farmer receives has to be low enough to support the entire supply chain, the only way to get ahead in life is to bring more land under cultivation.

Cacao harvesting is labor intensive. It's never been successfully mechanized.

Once you and your family are tapped out, you need more labor if you want to farm more land.

You can't afford to hire labor because that would nullify the extra income brought in from working the additional land.

You'd be spinning your wheels.

The unscrupulous ones go hunting.

If you are looking for a choke point in this whole thing, it is government boards.

We could never take our model into Ghana or Ivory Coast, because we couldn't afford a license.

A company like ours is precluded from doing business.Only big, strongly capitalized companies can operate.


Peru has a relatively free economy.

That is how three gringos could show up unannounced, gut it out over the years, and shake things up with a new model.

This is an argument in favor of freedom and free market economics by the way.

Little guys can show up and compete against entrenched powers and over time, through perseverance, bring about important changes.

I am running very long now and need to sign off.

I leave you with three concluding thoughts.

We have a moral obligation to help those who are less fortunate than we are.

Doing the right thing is something to be proud of because it takes will power and conscious action.

It isn't right to allocate our hard-earned resources to companies who don't do the right thing.

Thank you so much for time today.

I hope that you have a truly blessed day!


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