“Farmer-first” chocolate chain: Mars spearheads project to boost sustainable living income of cocoa growers

22 Apr 2022 --- Chocolate giant Mars Incorporated has initiated two “farmer-first” programs that will support the sustainable living income of 14,000 smallholder farmers in Côte d’Ivoire and Indonesia in the next eight years.

“Ten years ago, Mars decoded the cocoa plant genome for the first time. Today we are aiming to crack the code on a sustainable living income for cocoa farmers to enable them and their families to thrive for generations,” says Barry Parkin, Mars chief sustainability and procurement officer.

“Efforts to improve farmer livelihoods based on stopgap measures or single issues in isolation will not create the change that is required,” he remarks. “Farmers may understand what needs to be done to improve their crops and their livelihoods but might not have the market support to make those changes.”

“In this new effort, we are removing obstacles in their path, particularly lack of access to finance and the need to adapt to climate change.”

Elevating players along the chocolate chain
Mars describes its project as a “comprehensive effort” designed to address persistent barriers to cocoa farmers' ability to achieve a living income. Most cocoa today is grown on small family farms with little access to electricity, clean water, reliable roads or quality schools.

Most cocoa today is grown on small family farms with little access to electricity, clean water, reliable roads or quality schools.Compounding these challenges are negative effects of climate change and persistent market failures, such as disconnection from formal financial systems, underdeveloped cooperative management practices, unsustainable prices, and lack of alternative income sources to offset market volatility. 

These obstacles can leave cocoa farmers in poverty, unable to invest in or grow their businesses due to factors beyond their control. Despite past industry efforts to improve farmer livelihoods, the unfortunate reality is that smallholder farmer poverty has not been eradicated.

Mars’ “think-do” tank
The Farmer Income Lab (FIL), a “think-do” tank founded by Mars, reviewed more than 1,500 studies detailing common interventions to increase farmer income and found only three of them raised incomes by more than 50% and could be sustained over time. 

Mars will apply these findings in a new test-and-learn approach that combines best-practice interventions to unlock the entrepreneurship of farmers, diversify income streams, and improve productivity to enhance farm resilience and accelerate incomes, with the aim of scaling successful measures more widely.

FIL research shows there is benefit in going beyond selective, short-term interventions which are not fully effective at achieving sustainable change.

As such, Mars aims to drive long-lasting systemic impact through programs that:

• Bundle interventions – such as access to financial tools like below-market loans and mobile banking, agroforestry practices to address both climate change mitigation and adaptation, and income diversification measures – to address barriers to achieving a living income.
• Customize approaches to meet farmers’ unique needs as opposed to one-size-fits-all approaches.
• Prioritize long-term, equitable sourcing to provide financial security.
• Strengthen farmer cooperatives and market access for cocoa and other farm and non-farm goods.

Drawing inspiration from mint program 
To further inform its project, Mars will draw on key learnings from programs such as its Shubh Mint project, which was designed to improve incomes from mint for more than 20,000 smallholder farmers in Uttar Pradesh, India. 

Since its inception, the program has led to an increase in net mint crop income of over 250% and reduced the cost of production by more than 20%. 

The program includes interventions such as training farmers on Good Agricultural Practices; establishing four self-sustaining Farmer Producer Companies; and engaging over 8,000 women through women farmer groups (WFGs) and self-help groups (SHGs).

In its cocoa farmer project, Mars is currently working with a network of organizations, including Fairtrade, the United States Agency for International Development (USAID), Institute for Development Impact (I4DI) and ECOOKIM, a Fairtrade Cooperatives Union that Mars has sourced from for several years.

“Cocoa farmers and their families are struggling to make ends meet due to the changing climate, poor soil quality and long-term low prices,” comments Michael Gidney, Fairtrade Foundation CEO.  

“By investing in strengthening cocoa co-operatives, widening access to finance, and supporting farmers in diversifying their incomes, together, we hope to achieve a deeper impact for farming households.”

Edited by Benjamin Ferrer