Cocoa industry searches for solutions to production woes

It might not be obvious when you're unwrapping your occasional chocolate bar, but there is trouble facing the cocoa industry.

And now a groupof multinational chocolate companies are joining forces to solve the production shortfall, and investing a billion dollars to help growers.

Cocoa production is declining for a number of reasons. Some blame climate change (a 2011 report from the International Centre for Tropical Agriculture predicted some major cocoa-producing regions will become unsuitable for growing the beans within a matter of decades).

In 2014, theEbola epidemiccurbed production in some West African countries, according to Politico.There are also crop failures, and government crackdowns on child labour and slavery mainstays in the chocolate industry.

Prices spike, possibility of scarcity on the horizon

Through it all, demand is up particularly in China and India.

As a result, cocoa prices have spiked jumping 50 per cent, for example, between the beginning of 2013 and mid-2014.

• Mars hikes chocolate prices, following Hershey's lead

Daniel Terryis the owner of Denman Island Chocolate in B.C. He sources fairtrade organic chocolate from a processor in Belgium.

And he says there are legitimate concerns about the future availability of cocoa.

"I wouldn't say there's scarcity right now. There's potential scarcity down the road,as the demand increases and the supply does not increase," he said.

"From the point of view of large companies that are involved in the chocolate business, they definitely have an interest in finding ways to grow more chocolatesometimes appropriately, sometimes inappropriately."

Chocolate giants invest $1Bin solutions

In 2014, 10 of the world's largest chocolate companies joined forces to try to find some of those solutions ata cost of about a billion dollars, according to the Wall Street Journal.

Companies like Hershey, Nestle, Mars and Lindt are focusing on a handful of solutions.

They're investing in training, arguing thatin some regions, farmers could improve production with the right knowledge.

Mars, for example, has increased yields by teaching grafting techniques which allow new plant varieties to be attached to existing plants.

That move, though,put the company at odds with Ivory Coast government officials, who worry the practice could spread disease.

In other cases, companies are replantingand replacing aging cocoa plantations that are no longer productive.

And then there are incentives to simply establish more farms a move Terry says can be problematic.

"There's more production in Southeast Asia, obviously Africa produces a lot,and it's supplanting some areas where there were either forests or people were growing sustenance for themselves," Terry said.

"And I don't really see that as sustainability. It maybe gives us more chocolate to work with, but it doesn't help the people on the ground."

Commitments to end child, forced labour needed

He thinks more sustainable long-term help for people who live in chocolate growing regions is needed.For example, he says, there should be a stronger commitment to ending child labour, human trafficking and slavery in the cocoa industry.

Some major companies including Mars, Nestle, and Ferrero have committed to ending slavery by 2020, according to the rights organization Labor Rights Forum.

• Canadian chocolate companies pressed to ethically source cocoa

Terry says companies should do more,and sooner but there's not enough incentive for them to do so.

"This is an industry, like so many industries, that has become a monetary instrument, that people are looking for the bottom line," he said.

"And any way they can achieve that bottom line, and increase that bottom line, makes them look better."

New hope in Central, South America

Despite all the cards dealt against cocoa in recent years,there is some good news.

Coffee farmers in Central and South America who are dealing with unprecedented climate change impacts and a disease called coffee rust are increasingly turning to cocoa.

• 'Coffee rust' fungus raises prices of high-end blends

It grows where coffee won't. And the high price it's fetching has governments in Nicaragua and El Salvador investing in growing their cocoa industries.