New methodology set to boost standards for cocoa sector income measurement

11 Apr 2024 ---The World Cocoa Foundation (WCF) has unveiled a new methodology aimed at measuring cocoa household income and living incomes more precisely. Designed to evaluate the living income status of cocoa farmers, this methodology is key for assessing the impact of sustainability interventions on household incomes.

Traditionally, the cocoa sector has lacked a unified approach to assess cocoa farmer household income, a gap that has hindered a comprehensive understanding of the effects of sustainability interventions on cocoa farmer households and their environmental footprints.

Existing measurement techniques have struggled to accurately reflect the costs associated with cocoa production and to include non-cocoa sources of income.

As the cocoa industry is undergoing transformative changes, detailed data allows the development of technology-driven initiatives.

Advancement through collaboration
The newly introduced methodology offers a unified standard for future research and data collection endeavors across the sector. It provides inclusivity by incorporating previously overlooked groups such as sharecroppers, women and cocoa farmers within the indirect supply chain. Additionally, the approach introduces a mechanism for capturing diversified household incomes beyond cocoa production.

Higher farm gate prices are part of what’s required to ensure cocoa growers earn a living income.

Michael Matarasso, director of monitoring and evaluation at WCF, tells Food Ingredients First: “High-quality data is the foundation to determine whether interventions deliver the expected outcomes and impact. Without it, sustainability intervention delivery is ‘blind.’”

This initiative was launched as a collaborative effort, co-led and financed by the WCF and the German Federal Ministry for Economic Cooperation and Development, alongside contributions from the German Development Cooperation (GIZ) and the Swiss Platform for Sustainable Cocoa (SWISSCO). 

The methodology was developed by Wageningen University & Research and the Royal Tropical Institute, with support from Côte d’Ivoire-based Centre Ivoirien de Recherches Economiques et Sociales and Etudes de Marché et Conseils.

“With our partners, we had to think through and agree on the details necessary for a high-impact method that balances the collection of high-quality data and intensive sampling with the time and cost needed to collect this data.”

“Data is often collected from a specific sample, usually farmers in sustainability programs, missing important farmer groups in the indirect supply chain and underrepresented groups such as sharecroppers, giving only a partial picture on farmer income and one possibly highlighting more successful farmers,” says Matarasso.

“This methodology allows us to identify what types of interventions farmers have received; comparing that data with incomes will help to determine what interventions are effective and which are not, leading to adaptive management decisions and potentially redesign of intervention delivery strategies and focused investments.”

The methodology formulation was a collective endeavor, with inputs from an array of stakeholders within the cocoa industry, including the Alliance on Living Income in Cocoa, Living Income Community of Practice, government representatives from producing countries, NGOs and civil society organizations, as well as WCF member companies.

Following up on this development, WCF, GIZ and SWISSCO are set to employ this methodology in conducting baseline studies on cocoa farmer household income across three distinct landscapes in Côte d’Ivoire. 

“The sampling method was designed to enable inclusion of a counterfactual by oversampling and starting the survey with screening questions and not proceeding with the full survey if responses do not identify the sample group being sought and instead moving on to another household,” details Matarasso.

“Being able to assess if there is a relationship between interventions and higher incomes and the types of interventions will provide the information needed to adjust intervention strategy delivery and focus investments where the greatest effect is seen in the data. The data can also provide additional critical information that will contribute to the strategy design,” he concludes.

By Sichong Wang