The foundation of a story lies in its pillars, where a rich resource transitions into actual utilization. Entrepreneurs in Ghana and Ivory Coast are forging ahead, leveraging their status as leading exporters of cocoa beans to the world market. Despite this, the farmers behind this industry seldom taste the chocolate they help produce. Over the years, the narrative has shifted, capturing the attention of cocoa farmers and emphasizing opportunities to foster young entrepreneurs in their respective countries (Reuters).
The export market for cocoa beans has strayed from benefiting the economic potential of farmers. In the 1970s, farmers received nearly 50 percent of the value of a chocolate bar, whereas now they receive only six percent of the final product’s value. This underscores the importance of establishing the Living Income Differential Policy.
Living Income Differential Policy
The policy, established in 2019 jointly by Ivory Coast and Ghana, aims to raise the farmgate price share that farmers receive from the value of the global chocolate market, ultimately providing them with a decent standard of living.
In an era where marketing strategies increasingly influence consumer choices, a significant portion of the value of chocolate bars—44 percent—flows to chocolate manufacturers, while 35 percent benefits retailers. The journey of cocoa beans begins with their export to various entities, including buyers, international grinders, and renowned companies such as Nestle, Cadbury, and Hershey. This high demand for cocoa beans has sparked a surge of interest within communities to harness these beans domestically, potentially bolstering international revenue for the country (Barcley).
Cocoa farmers serve as the backbone of this industry, playing a pivotal role in its ecosystem. Despite the challenges inherent in the demand-supply chain, farmers diligently toil to secure their livelihoods. Often operating as smallholders, they sell their produce to large-scale buyers, who then supply these beans to billionaire chocolate conglomerates.
Acknowledging the complexities and issues associated with cocoa farming practices, both NGOs and corporate entities have intervened to support cocoa plant management initiatives. Entities like Ecookim have been instrumental in this regard, working collaboratively to address sustainability and environmental concerns while ensuring the prosperity of cocoa farming communities (reNature).
Figure 1: An woman harvesting cocoa pods (source from pixabay)
Pursuing small-scale entrepreneurs, it is important to uplift their engagement in bringing the rightful resources to the cocoa farmers in Ghana and Ivory Coast despite their hard work. Revolutionary impact on the country’s economy, they can withstand the valuation provided to the raw material in the country (adams).
Figure 2: Cocoa bean production statistics from 1961 to 2021 (Figure in the Left) and Cocoa bean production in Africa for 2021 (Figure in the right) that shows that leading producers are Ghana and Ivory Coast colored in dark blue; (Hannah Ritchie, Rosado and Roser)
With the disadvantageous strategies followed by cocoa buyers, addressing measures in international scale was supported by organization like FairAfric and FairTrade that work in hand with the communities in Ghana and Ivory Coast
FairAfric is an organization that motivates cocoa farmers in the mission to keep value in Ghana with headquarters based in Munich. FairAfric made the first organic chocolate bar being co-brand owners of the chocolate industry. The organization has supported by 2018 to produce 250,000 chocolate bars weighing 100. The organization works in cooperation with Niche Ghanaian Industry Ltd. to share the chocolate produced to the international market and provide opportunities to locals. Under the emphasis of social and economic security in the country, Fairtrade 2.0 was a mission established to address the emphasis on producing chocolate within the country of origin and emphasizes a Fair chain movement that advocates on the entire production process of chocolate happening in the country of origin of raw materials as in Ghana. The sustainable production with the use of solar panels in the energy generation of the factory process and the use of environmentally friendly packaging “Natureflex ”. Natureflex foil is a biodegradable and compostable packaging is a measure to show the contribution towards food security and the environment. It is a film made from wood pulp sourced from sustainable forests and biodegradable (Michail).
Fairtrade cocoa is a global organization dedicated to improving the cocoa industry by advocating for fair practices. Fairtrade minimum price is a key initiative, which serves as a safety net for cocoa farmers, ensuring they receive a stable income even during periods of market price fluctuations. This concept is also known as sustainable pricing, and aims to safeguard farmers’ livelihoods. Fairtrade Premium is a mechanism that enables farmers’ organizations to invest in aspects of the cocoa bean production process, spanning from crop collection to storage and transportation. Fairtrade Premium empowers farmers to ensure good agricultural practices implying fairtrade standards. Fairtrade certification labels serve as a testament to the ethical sourcing practices employed throughout the supply chain. On a broader scale, Fairtrade cocoa engages in international campaigns and mobilizes activist supporters, particularly in regions like the UK, to advocate for the expansion of fair-trade practices. The organization’s Small Producer Organizations (SPO) standard outlines guidelines for the application of fair-trade standards in the production, purchase, and sale of cocoa beans and processed cocoa (Michail).
Witnessing the cocoa farmers industry, youth refuse to abide with the farming career promises and tend to look for other opportunities to uplift their livelihood. In the need of producing chocolate, small scale entrepreneurs enter the market to share their commodities through the world having difficulties in meeting the international market.
Addressing the SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of entrepreneurs in Ghana and Ivory Coast is crucial for fostering sustainable economic development in these regions.
SWOT analysis of small-scale entrepreneurs
Strengths 1). Access to High-Quality Cocoa2).Cultural Heritage of chocolate production in 3).Local Market Demand provides small-scale entrepreneurs with opportunities for local sales and distribution.4).Government Support via initiatives and policies aimed at supporting the cocoa sector 5). Access to renewable energy sources like solar energy to support the energy demand in the processing plants.6).Secure income to local farmers by directly becoming suppliers of cocoa by enabling to reduce intermediate cost from bean to bar.
Weaknesses 1).Limited Access to Technology2).Infrastructure Challenges: Poor infrastructure, inadequate transportation networks, unreliable power supply, poses logistical challenges for entrepreneurs in sourcing raw materials and distributing finished products.3). Limited Market Reach: limited access to international markets due to barriers such as trade regulations, certification requirements.4).Dependency on Weather Conditions: Cocoa production is highly susceptible to weather conditions, and small-scale entrepreneurs may face challenges due to climate change-related issues such as droughts and floods.
Opportunities 1).Growing Global Demand for chocolate continues to rise, presenting opportunities to expand their market reach beyond domestic borders.2).Consumers are increasingly seeking products sourced from ethical and sustainable supply chains.3).Product Diversification based on consumer trends by diversifying their product offerings, such as introducing organic or artisanal chocolate products to cater to niche markets.4).Ghana and Ivory Coast are popular tourist destinations, and small-scale entrepreneurs can leverage the tourism industry by offering chocolate-related experiences, such as factory tours and tastings.5).The Ghanaian and Ivorian community can share the high skills and find secure job opportunities in the chocolate industry.
Threats 1).Fluctuating Cocoa Prices: Small-scale entrepreneurs are vulnerable to fluctuations in cocoa prices2).Competition from Large Corporations: Small-scale entrepreneurs face stiff competition from multinational corporations with greater resources and marketing power3). Political Instability: Political instability and social unrest in Ghana and Ivory Coast can disrupt business operations and deter foreign investment, posing a threat to small-scale entrepreneurs.4). Climate Change Risks: Climate change-related factors such as unpredictable weather patterns and disease outbreaks pose significant risks to cocoa production, affecting the livelihoods of small-scale entrepreneurs in the long term.
References
1). Adams, Tim. “From Bean to Bar in Ivory Coast, a Country Built on Cocoa.” The Guardian 2019. Print.
2). Barcley, Eliza. “These Ivory Coast Cocoa Farmers Had Never Tasted Chocolate.” npr 2014. Print.
3). Hannah Ritchie, Pablo Rosado, and Max Roser. “Agricultural Production.” (2023). Web.
4). Michail, Niamh. “Fairafric’s Made in Africa Organic Chocolate: ‘ We Are Making Our Farmers Brand Co-Owners’.” Food Navigator 2018. Print.
An environmentalist with a passion for exploring the potential to mitigate the impact of climate resilience in agricultural practices. Writer and researcher in using technology to understand the association of climatic changes.
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