Narrator: Ghana is the world's second-biggest
producer of cocoa, but the country only earns about 2%
of the $100 billion industry.
Cocoa growers here export most of their cocoa beans to Europe
and North America, where they're turned into chocolate.
Lloyd: We are shipping out the cocoa in its raw state,
and if you look at the value chain of cocoa,
money is made in the finished product.
Narrator: While big chocolate companies
rake in billions a year, many cocoa farmers live in poverty,
earning just $2 a day.
And Ghanaian entrepreneurs, like Michael,
have struggled to open chocolate factories
in their home country.
We are trying to decolonize chocolate. This time around,
we are saying that it can be done right here in Ghana.
Narrator: Now, the government is funding efforts
to grow a domestic chocolate industry.
But can Ghana's entrepreneurs get a bigger share
of the profits?
We visited a cocoa farm and processing plant to find out.
Ghana, together with Ivory Coast,
grows over 60% of the world's cocoa.
The countries sell to all the big chocolate companies,
from Hershey's to Mars to Nestle,
which process the beans abroad
in mostly Europe and North America.
Narrator: Joseph grows 11 acres of cocoa. And it isn't easy.
Farmers battle more extreme weather due to climate change,
plant disease, and fatigued land.
Every October,
he and his family begin
harvesting the yellow pods.
It takes just four days.
Narrator: Joseph collects the pods and takes them
to the breaking ground.
Here, workers crack them open and remove the beans by hand.
Joseph uses the leftover pods as compost under his trees.
Narrator: Joseph then dries the beans for another week.
In total, he packs 75 bags of beans a year.
His income is about $27 a day.
It's a high wage for a Ghanaian farmer,
because Joseph grows organic cocoa without pesticides.
But many farmers in Ghana live at or below the poverty line,
earning less than $2 a day.
That's because the majority of farms are small
and aren't certified organic, according to Kristy,
a cocoa scholar nicknamed "The Doc of Choc."
We are talking about really small plots.
And this is part of the reason
why cocoa farmers are so poor.
Narrator: But that's not the only reason
farmers make so little.
Kristy: Cocoa's been farmed in Ghana for over 100 years.
There are many parts of the country
where the land is really fatigued now,
and the trees are old.
Narrator: In the 15th and 16th centuries,
Portugal and Spain monopolized cocoa,
controlling production and trade from their colonies
in Latin America and the Gulf of Guinea.
Europe's elite were the biggest customers.
The crop arrived in what's now Ghana in 1876.
Around the same time,
the British declared the southern region a colony
and began invading north.
Locals owned and ran all the small farms,
but the raw product was exclusively exported to Europe.
A lot of what we know today as contemporary chocolate
really grew out of this trading relationship
between Ghana and Britain,
including the flavor of chocolate itself.
Narrator: Although Ghana gained its independence in 1957,
its one-way cocoa trade with Europe still exists today.
And it's kept farmers at the beginning of the supply chain
in poverty for generations.
To help raise farmer wages,
Ghana and its neighbor Ivory Coast teamed up in 2019.
The two largest cocoa-producing countries in the world.
And so when they get together on something,
everyone has to pay attention.
Narrator: They introduced the fixed price system,
which set a price floor for cocoa.
In 2020, Ghana set the price floor at $2,600 a metric ton.
That included a $400 premium
added to every ton of cocoa.
And this value goes directly to the farmers.
Narrator: The premium is called
the Living Income Differential, or LID.
It was the first of its kind in the chocolate industry.
It meant farmers took home nearly 30% more money
than the year before.
At first, big chocolate companies agreed to pay the LID.
You can't really not buy Ghanaian and Ivorian cocoa.
So the big buyers really had no choice.
Narrator: The LID's markup may seem like a lot,
but the millions it has raised to combat farmer poverty
is a fraction of big chocolate makers' sales.
But soon after it launched,
reports surfaced accusing Hershey's of buying cocoa
without paying the premium.
Michael: It's sad to note that these companies
who have the resources may not want to abide
by this simple appeal.
Narrator: In an email to Business Insider,
the company said, "Hershey supports
and is fully participating
in the Living Income Differential."
When the corporations do pay, the LID has helped farmers.
Lloyd: It's pushing farmers to even increase their yield.
That's how come last year,
we're able to hit a record 1.2 million tons of beans.
Narrator: After farmers dry the beans, they're bagged up.
About 70% of these beans will be sent overseas.
Ghana processes only 30% of its cocoa beans domestically.
But in 2020, at a press conference in Switzerland,
the president announced he wanted to change that.
We intend to process more of our cocoa
in our country, with the aim of producing
more chocolate ourselves.
Narrator: And he said it right in front
of the top commerce ministers of Switzerland,
one of Ghana's biggest customers.
That statement in Switzerland caused a lot of controversy,
I must say. He clearly mentioned our intentions
to put in efforts to also add value within Ghana.
Narrator: To support cocoa processing inside Ghana,
the government created a free zone outside Accra.
Any factory operating inside gets a tax break.
Lloyd Ashley runs Niche Cocoa Industry in the free zone.
In the free-zone enclave,
you're getting 10 years' free duty
on your imported parts for equipment.
So it gives you the opportunity to also increase capacity.
Narrator: Niche has become Ghana's
second-largest cocoa manufacturer.
The company says it processes 10% of the country's cocoa.
And Niche processes two tons of it an hour.
The cocoa beans arrive here from farms all over rural Ghana.
Workers stack the bags high, then cut them open, one by one.
The beans funnel into this grate on the floor.
And the rest of the process is controlled digitally,
from roasting the beans to grinding them into cocoa mass
that's then sent to get mixed with milk and sugar.
And from there, it comes here for a tempering process,
a cooling process, and then a packaging process.
Narrator: Niche has been pretty successful.
But for small companies outside the free zone,
it hasn't been as easy to get up and running.
Michael: Hello, come on, everything OK?
Crew Member: Yeah, everything is OK.
Narrator: Michael runs fairafric,
a cocoa maker that opened in Amanase
to be closer to cocoa farmers.
But since it's outside the free zone,
it didn't get the tax breaks.
Fairafric also had trouble buying cocoa beans.
As shocking as that may sound,
it's really hard in Ghana to procure cocoa beans.
Narrator: Another hurdle keeping Ghana's
chocolate industry from taking off?
Well, it's very hard to make chocolate in Ghana.
Narrator: For one, there's no dairy industry.
Anybody producing chocolate in Ghana
is definitely importing large volumes of milk
from either Europe or other continents.
Narrator: Chocolate makers also have to import sugar,
mostly from Brazil.
And finally, it's hot in Ghana.
Chocolate, by its nature,
it's very sensitive to temperature.
Any rise in temperature may cause the chocolates to melt.
There's not the kind of cold chain
that you need to distribute chocolate effectively
within Ghana or much of West Africa.
Narrator: And building out that cold chain
has been expensive.
We have used insulated building materials
for some sections of our building. Some sections
of the building is completely insulated roofing sheet.
Narrator: Also, Ghana's power grid
is sometimes unreliable.
Electricity, for example, it's another issue here.
Although there's power, it's never stable.
Narrator: Fairafric's top sellers
are finished chocolate bars.
Inside temperature-controlled rooms,
this machine pumps the chocolate into molds.
Michael: So our installation capacity is 10,000 bars
of chocolate every hour.
Narrator: That's a fraction of what a Hershey's
or Mars factory can do.
This machine wraps the chocolate bars.
With 68 workers, the company is scaling up
to produce 50 million bars a year.
Michael: The practice has always been that the raw materials
are sent to Europe for processing.
This time around, we are saying that it can be done
right here in Ghana.
Narrator: But Kristy says the country
still has a long way to go.
Definitely no silver bullets, for sure.
When you have a whole system, like colonialism,
it doesn't shift quickly.
Narrator: While there are five times
more processing facilities in Ghana today
than a decade ago, most only process cocoa
into intermediate products like...
Cocoa butter, cocoa mass, cocoa liquor,
cocoa powder, not to chocolate.
Narrator: 96% of Niche's business
are these intermediate products.
Most of the finished bars are still made abroad.
We need to increase the export of cocoa
in its semi-finished and also in the finished state.
Narrator: Lloyd wants to create demand
for finished chocolate within Ghana.
Cocoa consumption is very, very low in Africa.
I mean, compared to Europe, where you have
an average 5 kilograms-per-person consumption,
you're talking about 0.4 in Africa.
Narrator: That's because historically,
finished chocolate bars had to be imported from Europe,
so they cost a lot.
To create new demand in Ghana,
Niche is making a chocolate drink
Lloyd hopes to sell in schools.
He also hopes to source ingredients from inside Africa,
dairy from Egypt, and sugar from South Africa.
To train talent in Ghana, fairafric started this lab
and hired locals to develop new flavors.
And for farmers, advocates want to raise
the cocoa price floor to about $3,100 a metric ton.
And they want big chocolate companies
to foot more of the bill.
Nearly every big chocolate producer has programs set up
to lift farmers out of poverty.
But by some estimates, 73% to 90% of Ghana and Ivory Coast
cocoa farmers are still below Living Income standards.
If you're the CEO of these big companies,
it's time to come down and look at these yourself.
Narrator: As the industry is set to grow about 5%
in the next six years, Ghanaian cocoa farmers
and processors are vying for a larger stake
in the big business of chocolate.
Can we also be allowed to add value,
it would be changing the lives of the people
that play real roles in growing the beans.