Ghana will no longer sell cocoa to Switzerland

Re:Ghana will no longer sell cocoa to Switzerland by lr4444lr on Friday March 19, 2021 @08:15AM (#26512377)

Okay, but if local goods can't be produced at a price that is commensurately low, then the fledgingly country's wage earners have their purchasing power reduced, with less discretionary income to further their own educational and business pursuits. I think this thesis you are referring to takes for granted that the tariffs are going to be responsibly used by the governing class setting them to invest in the long term prospects of their people and not siphoned off into corrupt ends. That's a pretty tall assumption.

[ Parent | on HN ]

Re:Ghana will no longer sell cocoa to Switzerland by pydry on Friday March 19, 2021 @08:35AM (#26512531)

>if local goods can't be produced at a price that is commensurately low, then the fledgingly country's wage earners have their purchasing power reduced

If the industry they work in can't compete their entire income is reduced to zero.

That can knock out related industries as well and ultimately leave the country exposed to currency collapse and hyperinflation as the exporting countries decide that this country has nothing it really wants any more while they still desperately need imports.

This happened to Venezuela (after local industrialists declared war on Chavez in 2002 he effectively set out to destroy them) and Zimbabwe (when Muagabe dispossessed farmers from their land, rendering it unproductive).

The US is also exposed to this risk. It's steadily but very slowly losing hi tech manufacturing capabilities - something that takes decades to get back once lost (due to the network effect and loss of skills).

[ Parent | on HN ]

Re:Ghana will no longer sell cocoa to Switzerland by tshaddox on Friday March 19, 2021 @03:49PM (#26517519)

> If the industry they work in can't compete their entire income is reduced to zero.

But I thought we're talking about a time period before that industry even exists.

[ Parent | on HN ]

Re:Ghana will no longer sell cocoa to Switzerland by imtringued on Saturday March 20, 2021 @09:16AM (#26523002)

They still have a very important cocoa industry that employs people. If they cease trade and the chocolate industry does not grow quickly enough then some of those farmers will quit.

[ Parent | on HN ]

Re:Ghana will no longer sell cocoa to Switzerland by m12k on Friday March 19, 2021 @08:18AM (#26512402)

Correct, the lower priced international goods help give the population of developing countries more purchasing power with their low wages, but at the cost of those wages never going up significantly. They get stuck in a local optimum - and unfortunately, yes, in order to escape from one of those, the first steps will always be toward something less optimal.

[ Parent | on HN ]

Re:Ghana will no longer sell cocoa to Switzerland by SyzygistSix on Saturday March 20, 2021 @10:59AM (#26523636)

This isn't exactly the issue with the cacao production industry.

Like coffee, I believe the industries that are able to produce higher quality beans with more equitable and fair labor practices are doing better than the countries that continue producing cheap cacao. Something that I am under the impression is less supported by European chocolate producers.

My source is my time as a chocolate maker in the US.

[ Parent | on HN ]