KEY INTERVIEW: An Urgent Need to Restructure the Cocoa Sector

06 Aug 2014 --- Making sure a crop is sustainable for the future is a key area of work for Solidaridad and within the food industry it works across many areas including sugarcane, soy and coffee. Here, global cocoa program coordinator, Hans Perk, talks to FoodIngredientsFirst about the work the international organization is doing in order to secure the future of cocoa farming worldwide:

Solidaridad works with more than 26 government agencies in developing national sustainability strategies for cocoa. The organization has also arranged partnerships with key industry players such as Cargill, Mondelez, Nestlé and Mars.

But despite all of these strong relationships, how can one company push the world’s main cocoa producing nations into becoming middle-income countries in the near future? It’s a big challenge, agrees global cocoa program coordinator, Hans Perk.

“We have been working on this project for 14 years now,” he says. “We need to make it a more prosperous sector in order for farmers to remain interested in producing cocoa.”

The challenge of inspiring a new generation of farmers is just one area, but alongside this, Perk explains, is the frightening prospect of a huge shortfall of cocoa.

“The industry is talking about a shortfall of around one million metric tons by 2020,” he states. “The supply is not growing, and in some cases it is actually declining, and this is due to multiple reasons. Farmers are switching to more profitable crops, such as rubber. Farmers also don’t have access to enough land in order to plant more crops.

“Alongside this, co-operatives are not well-equipped enough to deliver these services to their members and government funding has been inadequate.”

Price rises on the horizon
The crux of the matter is that cocoa prices are likely to go up – with or without the intervention of companies such as Solidaridad.

There is a shortage of supply and yet demand continues to increase.

“But if we don’t interfere then it will have serious effects for the cocoa industry as I think it is likely consumers will switch to other products,” points out Perk.

If prices go up, Solidaridad wants to ensure this extra money is directed towards the farmer, and Perk hopes, ultimately, that consumers will recognise this.  
The demand for cocoa is there and yet support for the industry has been slow to arrive, he points out.

“There is growing demand in emerging countries such as China and India, which are growing quite rapidly although from a very small base, and countries such as Russia are eating more chocolate these days.

“It might be just a game changer if governments invested like they have done in the palm oil business.”

What has this project focused on?
Solidaridad’s strategy to date has been four-fold.

“Firstly we needed a new model in order to deliver these new materials, and this is something we have been doing so far in Ghana, by offering high quality training,” says Perk. “The second strand has been to work with governments to get them to increase their capacity on each of the issues around sustainability and cocoa production.  The area of land titles, and who owns the land, is an issue we needed to start talking about.”

Encouraging companies to invest more and work together has been another area. “A lot of this work is being done in splendid isolation and we need more collaboration,” says Perk.

Solidaridad has been working with some big industry giants and yet it has taken time to get this going in the right direction.

“Many of the producers we have worked with have significantly invested in the sector but they are not always coordinated enough. Most of these issues can’t be tackled on your own.”

Encouraging a younger new generation of farmers into the industry has been the final of the four areas of work for Solidaridad. “We needed to set interesting examples about becoming a cocoa farmer.”

Results:
Over the course of 14 years significant progress has been made, confirms Perk, but it hasn’t always been easy to evaluate or shout about these milestones.

“I would say that since 2007 until now we have evaluated that cocoa producers have become 20 to 30% more productive. This is progress but it’s still not enough to encourage farmers to stay in the industry. The average volume of production is 450kg per hectare and with 30% extra it is still way short of the required 2000kg per hectare, which is considered to be the volume required to make a reasonable living from cocoa.”

Making more land available to farmers is part of the strategy aimed at making this a more attractive industry, for various reasons.

“One hectare will never make a sustainable living with their crops, which is a big issue. We are still working with governments to make more land available, or to help farmers secure the land titles. If it’s not their land title then they are not so interested in investing.

“Another element is that if a farmer has four hectares he can combine the labour intensive cocoa arming with a less labour intensive crop, such as palm oil. They can’t grow together on the same land but a farmer could allocate two hectares for each crop.”

It’s not easy because climate change is leading to the problem that there is less land available, and in cocoa regions such as West Africa the band for cocoa is smaller than ever.

“Governments need to set out policies to make more land available but it has been changing over the years – they are being more cooperative.”

By Sonya Hook