Abstract
Concerns about the use of child labor in West African cocoa production became widespread in the early 2000s in many high-income countries. In 2015 in Ghana, 91.8% (or a total of 878,595) of the children working in the cocoa sector were involved in a form of hazardous work. Child labor in cocoa production is not just a symptom of poverty but also a contributing factor, as children often forgo a formal education to work in cocoa orchards. Current Ghanaian law prohibits child labor, but, with many cocoa households living in poverty, child labor becomes a necessity for survival, and as such, current child labor laws are rarely enforced. Therefore, an effective policy that eliminates child labor could compensate farmers by providing an economic incentive. In this paper, we develop and calibrate a farm household model to estimate the cocoa price premium necessary to eliminate child labor from cocoa production while leaving the farm household welfare unchanged. This welfare-neutral price premium removes the negative effects of eliminating child labor for the farm household. Varying degrees of child labor exists, with certain forms posing a greater risk to children’s wellbeing. The results show that eliminating the worst forms of child labor would require a cocoa price premium of 2.81% and eliminating regular work (non-hazardous work but over the maximum hours allowed for a child) and the worst forms would require an 11.81% premium, which could be paid for by the well-established Ghanaian Cocoa Marketing Board. An incentive for the Cocoa Marketing Board to pay the price premium and monitor and enforce this policy would be the ability to differentiate their cocoa as child-labor free and not lose market share to countries who cannot currently certify this practice.
Highlights
In the early 2000s, concerns about child labor use in cocoa production became widespread in the United Kingdom and other high-income countries following newspaper and documentary allegations of the use of child slaves in West Africa [1, 2, 3, 4]
The results showed that the number of children aged 5–17 years working in cocoa production, participating in child labor in cocoa production, and doing hazardous work in cocoa production grew by 24%, 21%, and 18%, respectively, between the 2008/09 and 2013/14 cocoa growing seasons [12]
Given that legislation of informal farming in Sub-Saharan Africa has proven impractical from an enforcement sense, this paper contributes to the existing literature on child labor in cocoa production by calculating the necessary economic incentive in the form of a fair-trade price premium to entice cocoa producers in Ghana to eliminate hazardous child labor
Summary
In the early 2000s, concerns about child labor use in cocoa production became widespread in the United Kingdom and other high-income countries following newspaper and documentary allegations of the use of child slaves in West Africa [1, 2, 3, 4]. Without tangible economic incentives, cocoa producers in Ghana and Cote d’Ivoire may not have the time or capacity to respond This could lead to increased demand from consumers in high-income countries for cocoa from other producing regions globally that have reduced or no child labor issues. Given that legislation of informal farming in Sub-Saharan Africa has proven impractical from an enforcement sense, this paper contributes to the existing literature on child labor in cocoa production by calculating the necessary economic incentive in the form of a fair-trade price premium to entice cocoa producers in Ghana to eliminate hazardous child labor. If the estimated premium is relatively small enough, activists and consumers could incentivize the reduction of child labor via price premiums paid to producers, instead of relying on political enforcement that has historically been less effective given the informal nature of the cocoa market
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