Advertisement

Contract-Farming in Cocoa Value Chains in Africa: Possibilities and Challenges

  • Lindsey Callahan
Chapter
Part of the Ethiopian Yearbook of International Law book series (EtYIL, volume 2018)

Abstract

The cocoa industry is a global multi-billion dollar industry that faces numerous challenges at the farm production level. Cocoa is largely grown by smallholder farmers in equatorial Africa, who experience poverty, declining productivity, volatile prices and lack of funding for investment, as well as human rights and environmental issues. Contract-farming is a value chain model that has been proposed to address many of the challenges faced by cocoa farmers. This paper provides an overview of the cocoa industry, including past and current initiatives to address issues and inequities in the cocoa market, and an overview of current research on contract-farming of cocoa, including an examination of three chocolate companies that source cocoa from Africa using a contract-farming business model: Theo Chocolate (Democratic Republic of Congo), Divine Chocolate (Ghana), and Madécasse (Madagascar). This research finds that contract-farming does offer cocoa farmers the opportunity to receive a higher price point for cocoa, and is more beneficial than industry sustainability programmes. There are however significant gaps in the research into contract-farming. It is not clear how contract-farming impacts sustainable economic development in the longer term, even when farmers obtain a higher price point for cocoa. Contract-farming may increase risks associated with land tenure insecurity, marginalization of women, and crop monoculture; even so, contract-farming can be carried out in a way that mitigates these risks.

References

  1. About the International Cocoa Organization, International Cocoa Organization, https://www.icco.org/about-us/about-the-icco.html (last visited May 26, 2018)
  2. About Us, COCOBOD, https://cocobod.gh/aboutus.php (last visited May 30, 2018)
  3. About Us, Divine Chocolate, http://www.divinechocolate.com/us/about-us (last visited May 26, 2018)
  4. About Us, International Cocoa Initiative, http://www.cocoainitiative.org/about-ici/about-us/ (last visited May 26, 2018)
  5. Asamoah M, Owusu-Ansah F (2015) Assessment of land tenure-related constraints to cocoa productivity in Ghana, available at http://www.worldcocoafoundation.org/wp-content/uploads/files_mf/1492612620CRIGLandTenureSurveyFinal41217.pdf
  6. Asamoah M et al (2017) Report on land tenure & cocoa production in Ghana, available at http://www.worldcocoafoundation.org/wp-content/uploads/files_mf/1492612620CRIGLandTenureSurveyFinal41217.pdf
  7. B-Corp, Divine Chocolate, http://www.divinechocolate.com/us/about-us/b-corp (last visited May 26, 2018)
  8. Better Cocoa, Nestlé Cocoa Plan, http://www.nestlecocoaplan.com/better-cocoa/ (last visited May 26, 2018)
  9. Cargill (2017) The 2016/2107 Cargill Cocoa Promise Global Summary Report, available at https://www.cargill.com/doc/1432099950824/cargill-cocoa-promise-report-2016-17.pdf
  10. Cocoa Certifications, Cargill, https://www.cargill.com/sustainability/cocoa/cocoa-certifications (last visited May 28, 2018)
  11. Cocoa, Fairtrade, https://www.fairtrade.org.uk/Farmers-and-Workers/Cocoa (last visited June 1, 2018)
  12. Cocoa Life, Mondelez International, https://www.cocoalife.org/ (last visited May 28, 2018)
  13. Cocoa: Caring for the future of cocoa, Mars, http://www.mars.com/global/sustainable-in-a-generation/our-approach-to-sustainability/raw-materials/cocoa (last visited May 28, 2018)
  14. Congolese Cocoa, Theo Chocolate, https://www.theochocolate.com/blog/congolese-cocoa/ (last visited May 26, 2018)
  15. Contract Farming Resource Centre, FAO, http://www.fao.org/in-action/contract-farming/en/ (last visited May 31, 2018)
  16. Da Silva CA (2005) FAO, the growing role of contract farming in agri-food systems development: drivers, theory and practice 11–12Google Scholar
  17. Da Silva CA, Rankin M (2013) Contract farming for inclusive market access 17. In: da Silva CA, Rankin M (eds) FAOGoogle Scholar
  18. Daily Prices, ICCO, https://www.icco.org/statistics/cocoa-prices/daily-prices.html (last visited May 30, 2018)
  19. Direct Trade, Madécasse, https://madecasse.com/direct-trade/ (last visited May 26, 2018)
  20. Divine Chocolate, http://www.divinechocolate.com/ (last visited May 26, 2018)
  21. Eaton C, Shepherd AW (2001) Contract farming: Partnerships for growth, 145 FAO Agricultural Services Bulletin 2 (Food and Agriculture Organization of the United Nations)Google Scholar
  22. Fair for Life, Fair For Life, http://www.fairforlife.org/ (last visited May 26, 2018)
  23. FAO (2016) Free, Prior And Informed ConsentGoogle Scholar
  24. FAQs: Global Poverty Line Update, World Bank, http://www.worldbank.org/en/topic/poverty/brief/global-poverty-line-faq (last visited May 29, 2018)
  25. Flick M, Ageing cocoa farmers pose risk for Ghana industry, Financial Times, https://www.ft.com/content/d9cb0d1c-26e7-11e5-bd83-71cb60e8f08c (last visited June 1, 2018)
  26. Frequently Asked Questions, Divine Chocolate, http://www.divinechocolate.com/us/about-us/frequently-asked-questions (last visited May 26, 2018)
  27. Gayi SK, Tsowou K (2015) United Nations conference on trade and development, cocoa industry: integrating small farmers into the global value chain 6 (UNCTAD/SUC/2015/4)Google Scholar
  28. Government maintains cocoa producer price at GH¢7,600.00 per tonne, Ghana News Agency (Oct. 13, 2017), available at http://www.ghananewsagency.org/print/123499
  29. Harkin-Engel Protocol, International Cocoa Initiative, http://www.cocoainitiative.org/knowledge-centre-post/harkin-engel-protocol/ (last visited May 26, 2018)
  30. Higonnet E, Bellantonio M, Hurowitz G (2017) Mighty Earth, chocolate’s dark secret: how the cocoa industry destroys National Parks, available at http://www.mightyearth.org/wp-content/uploads/2017/09/chocolates_dark_secret_english_web.pdf
  31. IFPRI (2000) Women: the key to food securityGoogle Scholar
  32. Industry Members, International Cocoa Initiative, http://www.cocoainitiative.org/about-ici/our-partners/industry-members/ (last visited May 26, 2018)
  33. International Cocoa Agreement, 1972, art. 1, Oct. 21, 1972, 882 U.N.T.S. 12652Google Scholar
  34. Interview with Emily Benson, Supply Chain Manager, Theo Chocolate, in Seattle, Washington (March 28, 2018)Google Scholar
  35. Jones S, Gibbon P (2011) Developing agricultural markets in sub-Saharan Africa: organic cocoa in rural Uganda. J Dev Stud 47:1595–1618CrossRefGoogle Scholar
  36. Kalimangasi NN, Kihombo A, Kalimangasi N (2014) Contribution of contract cocoa production on improving livelihood of smallholder farmers. Int J Sci Res Publ 4:1–10Google Scholar
  37. Kroeger A et al. Forest- and Climate-Smart Cocoa in Côte D’Ivoire and Ghana: Aligning Stakeholders to Support Smallholders in Deforestation-Free Cocoa 12 (World Bank)Google Scholar
  38. Le Conseil du Café-Cocoa, http://www.conseilcafecacao.ci/index.php (last visited May 30, 2018)
  39. Made at the Source, Madécasse, https://madecasse.com/made-at-the-source/ (last visited May 26, 2018)
  40. Madécasse, Madécasse 2017 Impact Report (2017). available at https://madecasse.com/wp-content/uploads/2016/09/Made%CC%81casse-2017-Impact-Report.pdf
  41. Membership of the International Cocoa Organization, International Cocoa Organization, https://www.icco.org/about-us/membership-of-the-icco.html (last visited May 26, 2018)
  42. Midland Archer Daniels (2016) ADM 2016 Corporate Sustainability Report, available at https://www.adm.com/sustainability
  43. Monthly Review of the Market, ICCO, https://www.icco.org/statistics/monthly-review-of-the-market.html (last visited May 31, 2018)
  44. Nestlé Cocoa Plan, Nestlé, https://www.nestle.com/csv/raw-materials/nestle-cocoa-plan (last visited May 30, 2018)
  45. Nestlé Cocoa Plan, Nestlé Cocoa Plan, http://www.nestlecocoaplan.com/ (last visited May 28, 2018)
  46. Nestlé, Nestlé In Society: Creating Shared Value and Meeting Our Commitments 2017 (2017). available at https://www.nestle.com/asset-library/documents/library/documents/corporate_social_responsibility/nestle-csv-full-report-2017-en.pdf
  47. Nguyen AT, Dzator J, Nadolny A (2015) Does contract farming improve productivity and income of farmers?: A review of theory and evidence. J Dev Areas 49:531–538CrossRefGoogle Scholar
  48. Nieburg O, Fair game: how effective is cocoa certification?, Confectionary News.com, Dec. 21, 2017., available at https://www.confectionerynews.com/Article/2017/12/20/Fair-trade-How-effective-is-cocoa-certification
  49. Objectives and Functions of the Board, COCOBOD, https://cocobod.gh/Objectives_Functions_Board.php (last visited May 30, 2018)
  50. Our Certifications, Theo Chocolate, https://www.theochocolate.com/blog/our-certifications/ (last visited May 26, 2018)
  51. Our Commitments, Nestlé Cocoa Plan, http://www.nestlecocoaplan.com/our-commitments/ (last visited May 30, 2018)
  52. Our Journey, Madécasse, https://madecasse.com/our-journey/ (last visited May 26, 2018)
  53. Our Work: Community Level, International Cocoa Initiative, https://cocoainitiative.org/our-work/our-work/community-level/ (last visited May 26, 2018)
  54. Oya C (2012) Contract farming in sub-Saharan Africa: a survey of approaches, debates and issues. J Agrarian Change 12:1–33, 2CrossRefGoogle Scholar
  55. Press Release, Barry Callebaut, “Forever Chocolate”: Berry Callebaut targets 100% sustainable chocolate by 2025 (Nov. 28, 2016), available at https://www.barry-callebaut.com/news/2016/11/forever-chocolate-barry-callebaut-targets-100-sustainable-chocolate-2025
  56. Roldan MB, Fromm I, Aidoo R (2013) From producers to export markets: the case of the cocoa value chain in Ghana. J Afr Dev 15:121Ÿ138Google Scholar
  57. Schneider K, Gugerty MK (2010) Evans School policy analysis and research, gender & contract farming in Sub-Saharan Africa Literature Review 4Google Scholar
  58. Statuts & Objectifs du Conseil du Café-Cacao, Le Conseil Du Café-Cocoa, http://www.conseilcafecacao.ci/index.php?option=com_content&view=article&id=112&Itemid=186 (last visited May 30, 2018)
  59. Sustainable Cocoa: Evolving the Cargill Cocoa Promise, Cargill, https://www.cargill.com/sustainability/cocoa/sustainable-cocoa (last visited May 28, 2018)
  60. The Divine Story, Divine Chocolate, http://www.divinechocolate.com/us/about-us/divine-story (last visited May 26, 2018)
  61. The Rainforest Alliance and UTZ To Merge, Forming New, Stronger Organization, The Rainforest Alliance, Jun. 6, 2017, available at https://www.rainforest-alliance.org/articles/rainforest-alliance-utz-merger
  62. Theo Chocolate Cocoa Pricing Specifications, Theo Chocolate, https://www.theochocolate.com/wp-content/uploads/2017/06/Theo-2017-Pricing-Matrix.pdf (last visited May 26, 2018)
  63. Tulane University School of Public Health And Tropical Medicine, Final Report: Survey Research On Child Labor In West African Cocoa Growing Areas (2015). available at http://www.childlaborcocoa.org/images/Payson_Reports/Tulane%20University%20-%20Survey%20Research%20on%20Child%20Labor%20in%20the%20Cocoa%20Sector%20-%2030%20July%202015.pdf
  64. U.N. Special Rapporteur on the right to food, Interim report of the special rapporteur on the right to food, delivered to the General Assembly, U.N. Doc. A/66/262 (Aug. 4, 2011)Google Scholar
  65. UNIDROIT, FAO & IFAD, UNIDROIT/FAO/IFAD Legal Guide on Contract Farming 1-2 (2015)Google Scholar
  66. Vigneri M, Kolavalli S (2017) FAO, Growth Through Pricing Policy: The Case of Cocoa in Ghana 5, available at http://www.fao.org/3/I8329EN/i8329en.pdf
  67. Vision & Mission, World Cocoa Foundation, http://www.worldcocoafoundation.org/about-wcf/history-mission/ (last visited May 26, 2018)
  68. Wessel M, Quist-Wessel PMF (2015) Cocoa production in West Africa, a review and analysis of recent developments. NJAS – Wageningen J Life Sci 74–75:3Google Scholar
  69. What is Contract Farming?, Contract Farming Resource Centre, FAO, http://www.fao.org/in-action/contract-farming/background/en/ (last visited May 31, 2018)
  70. What makes Theo different?, Theo Chocolate, https://www.theochocolate.com/blog/what-makes-theo-different/ (last visited May 26, 2018)
  71. Why Fairtrade, Divine Chocolate, http://www.divinechocolate.com/us/about-us/why-fairtrade (last visited May 26, 2018)
  72. World Bank (2008) World development report 2008: agriculture for development 127, 241Google Scholar
  73. World Bank: Life expectancy at birth, men (years), https://data.worldbank.org/indicator/SP.DYN.LE00.MA.IN (last visited May 25, 2018)
  74. World Bank: Life expectancy at birth, total (years), https://data.worldbank.org/indicator/SP.DYN.LE00.IN (last visited May 25, 2018)
  75. World Cocoa Foundation (2016) CocoaAction annual report 2016: learning as we grow: putting cocoaaction into practiceGoogle Scholar
  76. Young AM (2007) The chocolate tree: a natural history of Cacao 40–42Google Scholar

Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • Lindsey Callahan
    • 1
  1. 1.University of Washington School of LawSeattleUSA

Personalised recommendations