UACES Facebook Research into child labor in cocoa industry receives international attention
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Research into child labor in cocoa industry receives international attention

By Ryan Ruiz
University of Arkansas System Division of Agriculture
June 21, 2019

Fast Facts:

  • Study indicates economic incentives could help reduce child labor in cocoa industry
  • 3 percent price increase could reduce child labor in Ghana without harming farmers
  • Follow up study suggests consumers willing to pay 3 percent premium 

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FAYETTEVILLE, Ark. — An article assessing child labor in the cocoa industry recently published by University of Arkansas System Division of Agriculture economists Jeff Luckstead and Lanier Nalley and Francis Tsiboe of Kansas State University has sparked an international conversation.

Lawton Lanier Nalley

 Luckstead and Nalley are agricultural economics and agribusiness professors for the Division of Agriculture and the U of A’s Dale Bumpers College of Agricultural, Food and Life Sciences.

 The article, titled "Estimating the economic incentives necessary for eliminating child labor in Ghanaian cocoa production" and published in PLoS ONE, theorizes that a modest price increase of less than 3 percent could eliminate Ghana's use of child labor for hazardous work without weakening farmers’ earnings.

The article has been reported on by media in the U.S., the U.K. and Spain.

The use of child labor in the cocoa industry is a complicated issue. Ghana is the second largest cocoa producer in the world, and its cocoa farmers are generally poor and without the means to hire additional adult labor. Children often work alongside their families to help support them financially. Recent statistics show more than 800,000 children are involved in producing the crop.

"It's a really difficult issue because these are very poor farmers … They don't have many options—they can't just go and hire people," Luckstead told the Thomson Reuters Foundation.

Although the cocoa industry was valued at about $85 billion in 2018, most cocoa-farming families live below the World Bank's poverty line of $2 a day. Consequently, efforts to reduce child labor in cocoa production must take strides not to cause further detriments to farmer welfare.

For this reason, Luckstead and colleagues consider price premiums as a catalyst for change. Specifically, a 2.8 percent increase in cocoa price could yield a reduction in child labor without negatively impacting the farming household's welfare. 

"We figured there has to be some kind of incentive, on top of the laws, to get the farmers to stop using child labor,” Luckstead said. “It's nice to see that this is not that expensive.”

Despite the positive takeaways from this study, several forces impact its feasibility, Luckstead said. For instance, consumers of cocoa products might choose to purchase cocoa from another region to avoid paying the premium. As consumers continually seek cheaper and cheaper products, this consequence is entirely plausible.

Luckstead, Nalley and colleagues are conducting a follow-up study to gauge the willingness of consumers to pay more for child-labor-free chocolate and cocoa products. Luckstead said, "The preliminary results look positive; it appears that most consumers would be willing to pay at least a 3 percent premium to eliminate the worst forms of child labor."

The original article can be found by clicking here.

To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: Follow us on Twitter at @ArkAgResearch and Instagram at ArkAgResearch.

The original article can be found by clicking here, and the following links provide the international coverage of this article:

About the Division of Agriculture

The University of Arkansas System Division of Agriculture’s mission is to strengthen agriculture, communities, and families by connecting trusted research to the adoption of best practices. Through the Agricultural Experiment Station and the Cooperative Extension Service, the Division of Agriculture conducts research and extension work within the nation’s historic land grant education system.

The Division of Agriculture is one of 20 entities within the University of Arkansas System. It has offices in all 75 counties in Arkansas and faculty on five system campuses.

The University of Arkansas System Division of Agriculture offers all its Extension and Research programs to all eligible persons without regard to race, color, sex, gender identity, sexual orientation, national origin, religion, age, disability, marital or veteran status, genetic information, or any other legally protected status, and is an Affirmative Action/Equal Opportunity Employer. 

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Media Contact: Mary Hightower
Dir. of Communication Services
U of A Division of Agriculture
Cooperative Extension Service
(501) 671-2126