Journal of African Development Fall 2013 | Volume 15 #2 · Journal of African Development Fall 2013 | Volume 15 #2 From Producers to Export Markets: The Case of the ... products

JAD Journal of African Development

Fall 2013 | Volume 15 #2

From Producers to Export Markets: The Case of the Cocoa Value Chain in Ghana

MARIA BELEN ROLDAN1 INGRID FROMM2

and

ROBERT AIDOO

ABSTRACT

For many smallholders, agriculture is the main source of income, understanding how value chains work can derive many benefits to increase productivity and therefore farmers’ income. Many different stakeholders around the world are involved in the cocoa value chain, which is part of a billion-dollar chocolate industry. Cocoa farming in many developing countries is the main source of income for households. West Africa is the most important cocoa-producing area worldwide, accounting for 70 percent of the total production. In Ghana, small-scale farmers, with plantations of no more than 4 hectares, are responsible for most of the national production. This investigation sought to determine if the interactions of these farmers with different local and international stakeholders were improving their situation. The study took place in two main cocoa producer regions in Ghana, Brong Ahafo and Western. Three hundred small scale farmers in 20 different villages were interviewed. Interviews of different key stakeholders in Ghana, such as COCOBOD and in Switzerland, Felchlin AG, Chocolats Halba and Chocosuisse were conducted. This study focused on identifying the relationships, support, benefits and/or problems between stakeholders (national and international) and small scale farmers. On the other hand, the issue of contract farming and its impact on cocoa farmers in Ghana was analyzed. The results indicate that small scale farmers have little or no contact with stakeholders especially with chocolate manufacturers, the lack of farming contracts is high in

1 Roldan (author; email: [email protected]) 2 Fromm (corresponding author; email: [email protected]).

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both regions and if farmers work under contract there is little or no information about contracting terms and conditions. Awareness of sustainable production or certifications to motivate better producer price among farmers is also missing. Finally, a participatory value chain analysis is proposed in order to improve relationships between farmers and stakeholders.

JEL: Q13, Q17, Q18

Keywords: Value chain, cocoa, commodities, farming, small scale farmers, producer price, contract farming, Ghana.

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ROLDAN, FROMM, AIDOO: COCOA VALUE CHAIN IN GHANA

INTRODUCTION

The chocolate industry is part of a multibillion dollar industry where the constant growing demand has encouraged chocolate manufactures to seek the best ingredients to satisfy the most exquisite demands (Chocosuisse, 2011). Nowadays the cocoa industry has grown quickly and many companies offer a wider variety of products, where the main ingredient is this famous seed called cocoa. Therefore, a group of companies have decided to specialize in preparing semi-finished cocoa products (grinders) selling to chocolate, cosmetics, beverage manufacturers and other confectioners to produce finished added value cocoa products. Cargill, Barry Callebaut and ADM are currently the most important grinders in the world. They buy cocoa beans from traders and process them into cocoa liquor and cocoa butter to sell to chocolate manufacturers as well as to other industries (Fold, 2001). Cocoa is currently found in developing countries in Africa, Central and South America and Asia. Production is concentrated on small-scale farms, of no more than four hectares, and is the main source of income for many households. Ivory Coast and Ghana are the largest producers in the world with an estimated production of 1370,000 and 675,000 tons respectively. Other main players are Indonesia, Brazil and Ecuador (Oxfam, 2008). In Ghana, cocoa is a major contributor to the economy, and the country has won the reputation for high quality beans in international markets because of the work of the Ghana Cocoa Board (COCOBOD). COCOBOD is a marketing board in the control of the production and marketing of cocoa, coffee, sheanut, since 1984. With its subdivisions, it is in charge of providing inputs and delivering products to farmers, traders and buyers, as well as to register traders, Licensed Buying Companies (LBCs) to be able to buy from farmers and sell to Cocoa Marketing Company (CMC), COCOBOD subsidiary, high quality beans. Despite COCOBOD’s work to keep up premium prices, there is still a problem of low producer price in cocoa farming. This issue has generated concern among many organizations around the world that seek solutions to alleviate poverty and hunger in rural areas, while preserving the cocoa supply in the long run. However, the continual use of traditional agriculture with exhausted soils, combined with lack of inputs and capital, is causing low yields aggravating this problem (Gockowski et al., 2011).

In the agricultural sector, a value chain analysis can help to improve processes and especially help farmers raise their income. According to Bamman (2007), this analysis in agriculture should go beyond the farm level (production)

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and look into common business relationships and interaction among all the stakeholders, improving not only information channels but also accessibility to cocoa communities and farmers organizations, cooperatives or associations.

Cocoa is Ghana’s second largest export product where about two million cocoa farmers depend totally on cocoa production as the main source of income. Therefore, the aim of this study was to analyse the cocoa value chain in Ghana with particular focus on the relationships between stakeholders (COCOBOD, chocolate manufactures, NGOs, traders, etc) and small-scale cocoa farmers to identify possible benefits and improve the value chain. The study further sought to understand the many steps that farmers have to take until they can deliver high-quality beans reaching the premium price conditions imposed by the international cocoa market. The impact of contracts and certifications awareness in cocoa communities was studied in order to determine if farmers have any advantages. An overview of how some of the actors are involved in the cocoa value chain is given.

In addition the following hypotheses were taken into consideration:

Contract farming has a positive effect on cocoa communities because of the benefits provided to their farms.

Stakeholders’ action towards paying better prices for cocoa has positive effect on cocoa farmers because of the income increasing effect.

MATERIALS AND METHODS

Two data sets were used for qualitative and quantitative analysis. The qualitative analysis explained the effects of the relationships with the stakeholders and the benefits for farmers. The quantitative analysis on the other hand explained the effect of contract farming and the stakeholders’ benefits in income generation. Primary data was collected in Ghana, where two of the main production regions (Brong Ahafo and Western region) were selected. The sampling was divided into two main cocoa districts, Asunafo (Goaso) from Brong Ahafo region, and Sefwi Wiaso from the Western region. In each district 10 communities were reached and in each community 15 small-scale farmers were interviewed, reaching a total of 20 communities and 300 small-scale farmers. One selection criterion was that small-scale farmers had no more than four hectares of cocoa plantation. For this reason farmers were asked in advance how big their farm size was. Farmers and

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communities were selected as a stratified sample. Survey methods were used to approach small-scale farmers in the cocoa communities with the aid of a questionnaire and local assistant who translated the questions to farmers.

On the other hand, semi-structured interviews with leading firms in Ghana and Switzerland were performed with the objective of gaining an overview of the key stakeholders and their roles in the cocoa value chain.

A bivariate correlation analysis was used to quantify the strength of the relationship between two variables (Table 1) and determine if the use of contract farming increased the knowledge about the cocoa market amongst cocoa farmers. A Pearson’s correlation test was performed using a significance level of r <0.01 (two-tailed). Subsequently, Kendall’s tau-b3 was used for non-parametric data to measure the relation between each pair of variables with a significance level of 0.01 (two-tailed).

Table 1: Variables used for correlation analysis

Variable Description Variable Type

X1. Cocobod organized training on cocoa bean quality?

Cocobod is in charge of organizing training for farmers to learn how to obtain quality beans and maintain premium prices

Ordinal

Y1. Participation in quality control training?

Farmers know about the training but not all participate, even when it is free

Ordinal

X2. Use contract to sell your cocoa beans?

Not all farmers work under contract to sell their beans but, if they do, it is important to know if they have security while they cultivate cocoa

Ordinal

Y2. Felt contractors provide job security?

Scale

X3. What are the terms of contracting?

Not all farmers work under contract but, if they do, they also need to know the terms of contracting and some information on the cocoa market

Ordinal

Y3. I was kept well informed about contract terms/market info of cocoa?

Scale

3 Even though Kendall’s tau is used for small data sets, we used it in this analysis for a better estimation of the correlation of the population. (Field, 2009)

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Each couple of variables (X1:Y1; X2:Y2; X3:Y3) were correlated searching

for the relation between farmers and stakeholders and therefore answer one of the research questions: What type of relationship do small-scale farmers have with stakeholders within the whole value chain?

Finally, a factor analysis identified the significant factors and how these influence the responses of farmers about their relations with stakeholders and received benefits. A Varimax4 rotation was used with maximum iteration for a convergence of 30 to have a better understanding of which variables belong to the extracted factors (DeCoster, 1998). It is important to point out that suppressed absolute values <0.4 were used. For the factor analysis matrix, a set of Likert scale questions was used to understand the principal factors that drive the relationship with stakeholders and their benefits identified by farmers during this analysis. The variables were proposed to farmers as statements about certain activities (training and relationship) and information flow regarding production, quality and market aspects that stakeholders should be able to provide to farmers to have a better understanding of the cocoa value chain. The first variables were qualified in ranks from “strongly agree, agree, neither, disagree and strongly disagree”, the variables related to benefits were qualified as excellent, very good, good, fair, and poor.

RESULTS AND DISCUSSION

The analysis of the relationships between farmers and the key stakeholders (nationally and internationally) can improve certain steps in the cocoa value chain. This relationship brings advantages to farmers, giving them long-term security to sell their cocoa beans and to receive training and support, thereby improving productivity and producer prices and ultimately enabling them to enhance their living conditions.

1. FARMERS AND STAKEHOLDERS RELATIONSHIPS

Four principal factors that group the advantages between farmers and stakeholders relationships (Figure 1) were identified.

4 Varimax rotation is performed to simplify the interpretation of the results, after rotation each factor will cluster only a small amount of variables. (Abdi, 2003)

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Figure 1: Relationships and information flow between farmers and stakeholders

Source: Authors’ calculation

Stakeholders are responsible for creating awareness and training farmers on different cultivation techniques such as sustainability and certification. The communication from farmers to COCOBOD officers and with their employees in farms is important to take advantage of relationships and be able to work with them in the long run, creating trust and partnerships. Regarding training and knowledge extension, Mr. Nii Arku from CSSVD5 noted that they not only create awareness among farmers about prevention methods, control and new diseases

5 Cocoa Swollen Shoot Virus Disease Control Unit, Cocobod subsidiary in charge of control and take immediately action against the swollen shoot virus and provide technical support to prevent pest and disease.

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that affect the cocoa, but they also empower farmers to seek income substitution activities in the months when cocoa is not harvested, basically July and August. On the other hand, Mr. Charles Bruce-Tagoe, regional manager for QCC6 in the Ashanti Region, adds that quality assurance is the key to linking farmers and LBCs7 with international standards. Therefore workshops are held three times a year where farmers are able to learn about the relevance of post harvest practices to keep good quality of the beans. In addition, Swiss stakeholders also contribute to farmers’ training. Felchlin AG and Chocolats Halba are working to have direct contact with farmers through cooperatives/farmer associations in order to train them on how to uphold good quality (fermentation and drying process especially), explaining why this is necessary. Once a year or once every two years, both companies invite a selected group of farmers to visit their offices and the chocolate factories in Switzerland (all expenses paid). There they have the chance to see the whole chocolate process and understand why is so important to maintain good quality. In addition, chocolate manufacturers and NGOs are seeking to work directly with farmers to be able to pay higher producer prices and give extension and knowledge services, but there is a minor organization from farmers in cooperatives and/or farmers association making difficult the process to reach them because many communities are located in remote areas.

The success of such relationships is reflected in benefits to cocoa farmers and to the communities (Figure 2) provided by stakeholders to increase their social responsibility and to keep motivating cocoa farmers.

6 Quality Control Company Cocobod subsidiary is responsible for inspecting, grading and sealing the dried beans for local and international markets as well as keeping warehouses free of pests and diseases. 7 Licensed buying companies are approved traders by Cocobod in charge of buying cocoa beans from farmers and selling to Cocobod subsidiary Cocoa Marketing Company (CMC).

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Figure 2: Benefits from stakeholders to cocoa farmers and communities


1.1 CHALLENGES FACED BY STAKEHOLDERS

Besides actions from stakeholders to give benefits to farmers, there are challenges that must be overcome. During the interviews, they were asked about the challenges faced in the value chain when dealing with farmers and other stakeholders in Ghana or internationally. The main challenge for the majority of stakeholders (74%) is related to farmers’ adaptation to new farming techniques, quality control standards and sustainable production. They all agree that small-scale farmers need time to understand and employ what they have learnt in training and extension centres, but they are influenced by short-term thinking. Farmers need to see immediate results (yield increase) in order to change their traditional agricultural practices. Mr. Fred Kukubor, Cocoa Project Officer, West African Fresh Fruits (WAFF), adds that changing farmers’ behaviour is a long-term process; it takes time until farmers are able to adapt to new techniques. WAFF in collaboration with other organizations (Mars, Cargil, ADM, Akom) is trying to empower farmers to change their behaviour, encouraging them to be more flexible and adopt better agricultural practices because it will improve their income. Mr. Amenyah, Public Affairs Manager of COCOBOD, said that convincing farmers to switch to sustainable production, especially organic, is a problem because of the difficulties of pest and disease control and the low yield. Farmers

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expect that switching to more sustainable production will automatically increase yield and income, but they also have to understand that it needs time, patience and constant cultural practices (weeding, fertilizer application, pruning and so on) to see positive results.

Another main challenge expressed by stakeholders is reaching cocoa farmers at their villages due to the poor road conditions and lack of transport. For the QCC, this is a particularly serious problem. Mr. Tagoe said that not reaching farmers at community level is mainly due to transport and the poor condition of the roads. It is important to reach the communities and more farmers so as to keep up quality at farm level and create awareness of good drying techniques for the beans, also enabling QCC to deliver inputs. The importance of taking extension services to farm level is to be able to see how farmers are performing previously taught quality control activities, and also to explain how to do these (fermentation and drying) with visible examples, reaching as many farmers as possible. Mr. Sepp Schönbächler, Head of Product Development and Marketing/Sales from Felchlin AG mentioned that the difficulty of reaching farmers is not only the poor road conditions but also the lack of organization into cooperatives/farmers association like in Ghana, which facilitates contact for support and training. There is not enough information on the location of small-scale farmers. Thus an increase in cooperatives or farmers associations would increase the opportunity to receive inputs and training, while enabling farmers from all over the country, even those in remote areas, to participate in sustainable production.

For national and international grinders, the main challenge is cocoa procurement. National companies are allowed to buy light crops at discount prices but also main crop but prices can be very high. Often the supply is not enough to satisfy the demand and prices tend to fluctuate. Of the total production, 70% is for market exports and only 30% is for the national market. Therefore competition with other grinders and prices is high. Transport costs, including insurance, from inland ports to sea ports also affect grinders’ costs. Each truck is loaded with approximately 600 bags. For international companies there are not enough cocoa farmers as the demand is increasing. Nowadays countries like Brazil, China and Russia are starting to consume more chocolate and the cocoa supply is not able to satisfy that demand. On the other hand the high competition between chocolate manufactures and the use of less percentage of cocoa ingredients in their end product making them cheaper is a major concern. In Europe, policies obligate chocolate manufacturers to use 95% cocoa ingredients. For the non-European

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manufacturers selling cheaper chocolate products with only 50% cocoa ingredients, compete to satisfy demand outside Euro.pean countries.

Finally, the financial support and input supplies are challenges affecting the activities of the cocoa value chain actors in Ghana. COCOBOD subsidiaries explained that supplies are often not on time and financial support is not enough, delaying the extension services at farm level and jeopardising the activities performed by agents, traders and farmers.

2. CONTRACT FARMING

Farmers working under contract were found to be only 17.33% of the sample. Contractual terms differ according to product, location and contractor. For commodities (cocoa in this case), specific conditions for production and labour are required; production is described as labour-intensive and needing continuous monitoring (Little and Watts, 1994). Using contract farming can bring opportunities, offering farmers information on crop improvements and different ways of increasing their income. But limitations are also identified: farmers are not free to suggest changes in production but only depend on activities defined by contractors. They have little or no access to information on market demands and price fluctuations.

The use of contracts does not always imply that farmers will have job security for the next month/season. Farmers who answered that they are working under contract or a certain agreement to cultivate and/or sell cocoa beans have shown a negative correlation (r= -0.289) between contracting and job security (Table 2). This means that, if contract farming increases in cocoa communities in Ghana, the security of selling cocoa for the following seasons will decrease. The lack of trust between farmers and contractors lies behind this problem. Often a contract is just mutual agreement with nothing written serving as evidence in case the “contracting terms changed”. Many farmers complained of cheating by PCs; why not cheating as well by contractors? Illiteracy heightens this problem as farmers have difficulty understanding the terms and conditions of contracts; they do not have enough market awareness. For this reason, the development of mutual trust relationships is an important factor as well as participatory relationships. When trust is built on good terms, many goals are reached. Changes should start

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by involving farmers in the production, not just as manpower but also as important decision makers, making them feel free to suggest improvements at farm level while additionally providing them with knowledge on the cocoa market.

Table 2: Use of contracts provides job security to farmers

Variable x̅ σ X2 Y2

Use contract to sell your cocoa beans? (X2)

0.08 0.278 1 -

0.289**

Significance

Felt contractors provide job security (Y2)

-

-0.289**

0.000

1 3.79 1.453

Significance 0.000 -

% Variability 8.3 8.3

**0.01 level (two-tailed)


Chocolate manufacturers are working in successful partnerships with farmers with no need for signing contracts but just verbal agreements, providing job security for farmers to sell their beans in the long term (3-5 years), as well giving technical support on improving and keeping up good quality beans, explaining the importance of this in the cocoa/chocolate market. Mr. Schönbächler, from Felchlin, mentions as an example the successful partnerships between Ecuadorian cocoa farmers and Felchlin. Farmers working with Felchlin do not have written contracts but verbal agreements for at least 5 years; they receive training on agricultural practices to improve production and on the importance of keeping up high quality beans as this will be reflected in the end products8. Inviting farmers to Switzerland to see the chocolate manufacturing using their cocoa beans has helped Felchlin build up trust and the credibility of their activities amongst cocoa communities in

8 Felchlin’s star products are Origin chocolate, which explains where the cocoa beans come from, informing the customers about cocoa production in developing countries and assuring quality and aroma for dark chocolate products.

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Ecuador. The company is also trying to implement the same agreement systems with farmers in other countries. However, this has been complicated in Ghana due to the political system and the fact that farmers are not organized in cooperatives, making it hard to extend the information process to farmers’ communities.

As the actions of different chocolate manufacturers are becoming effective in contract farming (more through agreement than actual contracts), not only involving farmers in production but also creating awareness about the cocoa market (as Felchlin is doing), should continue. We found out that there is a high correlation between the awareness of terms and conditions in contract farming and the information flow about cocoa markets among farmers working under contract/agreement (r= 0.598) (Table 3), confirming the hypothesis that contract farming has a positive effect on cocoa communities because of the benefits provided to their farms. This supports our statements earlier in this section. The actions of chocolate manufacturers should be adopted not only by the state (COCOBOD) but also by traders who are in permanent contact with farmers and have the power to improve the Ghanaian cocoa value chain and consequently producer prices.

Table 1: Information to farmers regarding contract terms and cocoa market

Variable x ̅ σ X3 Y3

What are the terms of contracting? (X3) 1.88 1.453 1 0.598**

Significance - 0.0001

I was kept well informed about contract terms/market info of cocoa (Y3)

4.11 1.192 0.598** 1

Significance 0.001 -

% Variability 35.7 35.7

**0.01 level (two-tailed)


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CONCLUSIONS

The results of this study have identified the problems in the cocoa value chain in Ghana, how farmers are affected and how stakeholders’ action for improvement comes up against unexpected challenges in their relationships with farmers and other key stakeholders in the chain.

Farmers’ relationships with stakeholders in the chain have brought positive and negative actions for cocoa production. The results indicate that the main problem faced by farmers is with the PCs (purchasing clerks) who buy from farmers. This problem is mutual. On one hand, the PCs complain about the farmers’ lack of commitment to adopting new agricultural practices when receiving training and about farmers not repaying loans on time. On the other hand, farmers complain about unfair trade conditions given by PCs when buying (cheating with adjusted scales) and paying (paying less than the fixed price). The lack of intervention by a third party has aggravated the problem, leading farmers to search for other buyers or even smuggle cocoa to other countries. It is important for governmental institutions to create regulations to promote fair trade between PCs and farmers, which in turn will increase the motivation for cocoa farming and the adoption of the agricultural practices expected by PCs.

Relationships with other stakeholders remain minimal. There is only an arm’s length market transaction so farmers and traders are practically unknown to each other. Farmers have no contact with any chocolate manufacturer, except for Felchlin, which works with the LBC Yayra Glover. There is only contact with COCOBOD agents when training and extension services are provided, maybe twice a year. NGOs and other chocolate manufacturers are trying to establish direct contact with farmers in order to improve their work. However, the total control of Ghanaian cocoa production by COCOBOD has contributed to farmers’ isolation from external organizations willing to provide market knowledge to improve farmers’ livelihoods, transfer knowledge about sustainable practices and better drying/fermentation techniques. A rapid response from COCOBOD to organizations interested in cocoa production and assisting farmers (such as NGOs) would improve the effectiveness of the value chain, reaching social and business goals, securing supply and improving farmers’ income. COCOBOD is taking action in the right direction but the lack of participation by farmers in the market results in misinformation in cocoa communities, increasing frustration among farmers and

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fostering mistrust in relationships with other stakeholders in the chain. The importance of knowledge transfer and farmers’ willingness to change and adopt new technologies could improve this situation. Approaches to reach farmers and explain new methods should be carried out in a simple, clear manner, considering farmers’ illiteracy, expanding farmers’ participation in training and extension services in remote areas. Additionally, the use of workshops, surveys and focus groups could increase farmers’ participation and enhance their willingness to explore and talk about the main problems affecting productivity, in a search for new solutions. It is necessary to reach farmers in all communities. Many small-holders are in remote areas who struggle to increase productivity and have little or no training. Unfortunately, the poor access to villages (poor road conditions and lack of transport) is hindering the possibility of development for the cocoa industry in Ghana. Not only are farmers unable to reach training centres, but buyers also face difficulties transporting beans from villages to the ports. The construction of better roads, such as the “cocoa roads” by COCOBOD, should also be supported by the Ghanaian government because the benefits of this project would be reaped not only by the cocoa industry, but by the whole country.

In addition, farmers’ need to see tangible or immediate benefits from stakeholders, this should increase their motivation and willingness to change traditional practices. Innovative ideas that bring back interest in cocoa farming, such as visits where they can see the implementation of non-traditional agricultural practices on other farmers’ land, would help prevent more cocoa farms being abandoned and stem the shift to growing other labour-intensive crops. This would additionally motivate the younger generation to recover inherited activities, such as cocoa farming.

A full understanding of the value chain and the relevance of involving each actor in improvements in the chain is imperative. Identifying key stakeholders and their participation in the chain has brought advantages for Ghanaian farmers. Some of the main factors causing low productivity, the pros and cons of contract farming, and creating awareness of certification or other sustainable practices were identified. Business actors have the power to influence others and spur improvements. Participatory methods make it possible for business actors and farmers to work together for common benefits, such as in the cases of Felchlin and Chocolats Halba. Their action towards securing the cocoa supply has brought farmers the opportunity of increasing income by adopting more efficient production systems and certifications. The results indicate that farmers working

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with them are receiving higher producer prices than farmers working on their own. This demonstrates that common agreements and trust-building between farmers and stakeholders are having positive effects. Other stakeholders (NGOs, COCOBOD, LBCs, etc.) should take into consideration the application of such actions.

In conclusion, there is a huge need to improve productivity in both regions to be able to improve farmers’ income and increase their participation in the cocoa value chain. The results indicate that traditional agricultural practices remain rife for small-scale cocoa producers, where the lack of fertilization, pests and diseases and the lack of capital are the main factors hindering productivity. Only a small percentage of farmers are aware of and participate in certification efforts; low productivity and the lack of capital have blocked them from adopting such practices. However, contract farming or verbal agreements with stakeholders have shown a positive effect on farmers’ income. These actions have demonstrated that cocoa farmers in Ghana have the chance to improve their income through the benefits provided by stakeholders seeking to secure the cocoa supply in the long run.

The Ghanaian cocoa marketing system (regulated by the state through COCOBOD) sometimes delays processes in the cocoa value chain; certain steps need to be eliminated to increase competitiveness in international markets. This is not only to keep up premium prices for the quality beans, but also to give faster and more effective responses to stakeholders, farmers and researchers. The exponential growth of globalization is sharpening competitiveness and awareness in consumers, making markets more demanding. With improvements in the value chain (involving farmers in sustainable production), Ghana would have greater opportunities, not only in the cocoa industry but also in other economic sectors. The promotion of alternative sources of income generation could go beyond production, for example finding uses for cocoa sub-products. The use of cocoa pulp for beverage production or using empty pods for organic compost that could be sold to other farmers or even applied on their own farms would reduce waste and create some extra income for farmers.

The final recommendation is to take end consumers into account as part of the stakeholders group in the value chain analysis. Consumers have the power to decide what to buy and how much to pay for a product, so they can make a difference. If consumers have knowledge of the extreme poverty experienced by

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cocoa farmers in developing countries like Ghana, awareness to improve farmers’ living conditions would increase. Chocolate manufacturers’ actions towards this is reflected on the information campaigns addressed to customers, where they are made aware that if they pay more for their chocolate they are contributing to paying better prices to farmers. Marketing is an important tool and this job can only be done by those on the retail side of the value chain. The question is who is really able to commit to paying extra money for the same product if consumers can find it cheaper among competitors? Policy makers should consider applying the same policy as in Europe to other countries that obligates chocolate manufactures to produce products with higher percentages of cocoa ingredients, less sugar and cocoa substitutes.

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Gockowski J., Afari-Sefa V., Sarpong D., Osei-Asare Y., Dziwornu A., (2011). Increasing income of Ghanaian cocoa farmers: is introduction of fine flavor cocoa viable alternative. Quarterly Journal of International Agriculture 2 (50), 175–200.

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Journal of African Development Fall 2013 | Volume 15 #2 · Journal of African Development Fall 2013 | Volume 15 #2 From Producers to Export Markets: The Case of the ... products