3071-The political economy of new slavery

162 Child Labour, Education and Child Rights Among Cocoa Producers in Ghana
for their cocoa beans (Oxford Policy Management, 2000). In countries
such as Indonesia, Malaysia and Nigeria farmers receive between 80 and
85 per cent of the world price for cocoa (International Cocoa Organization,
1999). While the difference between world price and producer
price enabled the government to make considerable profits, which
could be used to run the country, most of the revenues were invested
in urban rather than the poorer rural areas and this has caused a lot of
resentment among rural dwellers. The price review from 274,000 Cedis
to 531,250 Cedis detailed above is in accordance with the government
policy to gradually increase the share of the world market price that
producers receive until it reaches 70 per cent in the 2004–5 season.
This is part of a broader government initiative to alleviate rural poverty
and to curb the long-established smuggling of cocoa into the Ivory
Coast, which represents an enormous annual loss of revenue for the state
and is fuelled by the higher price of cocoa in that country. In addition
to receiving an adequate share of the world market price, it is important
that farmers are given a price commensurate with rates of inflation in
order to increase their purchasing power. Unfortunately further significant
increases in the price of cocoa will be necessary in 2003 to
compensate for the huge increase in living costs caused by the loss of
subsidies on fuel since the last cocoa price adjustment.
Under pressure from international financial institutions such as the
World Bank, Ghana may fully liberalize its cocoa industry in the foreseeable
future, which would mean an end to its fixed-price policy and
enable foreign cocoa buyers to buy directly from farmers. This would
give producers a higher share of the world market price but would also
signify a much greater exposure to world market volatility, and the loss
of market intermediaries (such as private cocoa-buying companies or the
Cocoa Board’s Quality Control Division), which often provide valuable
services to the farmers. 4 The full advantages and disadvantages of these
changes are unfortunately too complex to investigate further in this
chapter, and the effect these may have on labour conditions would be
speculative at this stage.
While issues such as pricing or the structure of the cocoa industry may
seem far removed from child rights, it is necessary to understand that
they are the complex local economic matrix in which labour relations
evolve. Globally the power of multinationals and low commodity prices
are matters of concern, but I hope to have illustrated that Third World
farmers suffer as a result of many different economic and political parameters
which extend beyond these factors, such as domestic marketing
arrangements or government policy. In the case of children on cocoa