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Greening the Supply Chain in Ghana and Brazil:
can the private sector address deforestation in the cocoa sector?
Marisa CamargoUniversity of Helsinki
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Deforestation and commodities
• Agriculture = 80% deforestation• Zero-deforestation supply chain pledges– Soy, palm oil, cattle, cocoa
• Cocoa – Villain: driving DD 14–15m ha last 50 years– Ally: agroforestry systems in the landscapes– Victim: CC impacts on growing regions
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Suitability of cocoa production(current and 2050)
Source: Läderach 2013
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Production
Thousand of tonnesSource: ICCO 2015
2012/2013Estimates2013/2014
Forecasts2014/2015
Côte d’Ivoire 1449 1746 1740
Ghana 835 897 696
Nigeria 238 248 235
Cameroon 225 211 220
Africa 2836 3197 2984
Ecuador 192 220 250
Brazil 185 228 215
America 622 708 729
Indonesia 410 375 370
Asia & Oceania 487 454 455
World Total 3945 4359 4168
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Ghana
• 2nd largest producer • Farm size below 4 ha • Direct and indirect employment to 2 million people • Cocoa = 25%/a of total foreign exchange earnings• Ghana Cocoa Board (COCOBOD) under Ministry of
Finance, implements government policies and programmes
• Very regulated system to determine logistics and price of cocoa production
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Ghana – supply chainMajority is exported
Source: Sutton 2012
• Large number of smallholder • 27 licensed buying companies • Few processors (ADM, Cargill, Barry
Callebaut) and manufacturers (Nestlé) • One exporter (Cocoa Marketing Company)
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Challenges
• Farmers average age 50 years• Limited extension services• Productivity is low (355 kg/ha)• Loss of ~34% (diseases)• Cocoa trees are aging• Majority of cocoa is exported • Majority of farmers not organized– Difficult to provide TA and certify
• Most cocoa farmers not bankable
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Brazil
• Large global producer, 1970’s no-shade policy• Pest (1980’s) destroyed plantations – areas burned;
producers left idle; no gov/mkt support; rural exodus• Small growers but some large plantations• Challenges: TA, loans, pest, urbanisation, labour costs• >90% production processed and consumed in Brazil • Good cases of successful
restoration of the cocoa landscape, sharing space with other commodities and improve livelihoods – need to scale up!
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Cocoa: challenges and solutions• Farmers aging and
scattered in landscape • Low-productivity, lack
of TA, little access to credit, aging trees
• Dependency in one commodity
• Little research on agro-ecology/agroforestry
• Climate change impacts on cocoa growing area
Landscape approach• Work in larger areas with various
stakeholders and activities – education, research (species, agroforestry
(cash and food crops))• Build synergies with other LUs and actors
(Ministries) - Zoning (REDD)• Id and address degradation• Increase resilience• Aggregate several farmers• Promote product diversification• Develop Landscape certification• Empower youth e.g. entrepreneurial skills
$£€¥
Deforestation not the only challenge!
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Can the private sector address ‘deforestation’ in supply chains?
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Who?
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Global JourneyFrom cocoa to chocolate
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Who is the private sector?
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Benefits and responsibility
• Several private actors benefit from cocoa production….
Farmers 3%
Local taxes and cocoa buyers 5%
Transport, storage, and trade 12%
Grinder/processors 7%
Manufacturing costs 20%
Marketing 10%
Retail/supermarket margins 43%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
• They should also share the costs of producing sustainable commodities
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Chocolate value chain
Seed and fertilizer producers
Local buyer/ Traders
Transporter Processing Manufacturer
RetailerConsumer
Investors
Packaging Co Recycling/Disposable
facilities
Suppliers (sugar, dairy machinery)
Farmer
Emissions
Emissions
Emissions
Deforestation not the only activity that leads to emissions
In-setting
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Encouraging both supply and demand of sustainable commodities
Supply Demand
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Policy mix encouraging demand and supply of sustainable commodities
Education Voluntary
RegulatoryProperty right, price-
based
Advertising, education campaigns, shamming, dissemination of results (evidence)
Exclusive use rights, easements, offset arrangements, leasing and licensing, charges, levies, use fees, tax instruments
Industry voluntary commitments, development assistance, ESG criteria
Zoning, land use restrictions, standards and bans, product labeling, Information disclosure (GHG)
Governments
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Thank [email protected]
This research was funded by UK aid from the UK Government, however the views expressed do not necessarily reflect the views of the UK Government