Sustainable cocoa: Cargill’s boost to Ghana farmers as volume of directly sourced cocoa doubles

05 Sep 2018 --- The volume of sustainable cocoa sourced by Cargill has doubled since the company first established its own licensed buying company (LBC) model with an estimated 13,000 cocoa farmers benefiting from the initiative. This is a 30 percent increase from the 10,000 farmers from last year and demonstrates how direct sourcing puts cocoa farmers at the heart of Cargill’s cocoa business.

The figure of 10,000 metric tons (MT) of certified cocoa has been purchased by Cargill for the 2017/2018 crop season and comes as Cargill makes its second sustainable premium payment of US$870,000 to farmers since establishing its own direct sourcing model in 2016. These premium payments currently represent the highest payments paid per bag of certified cocoa in the industry for the 2017/2018 crop season in Ghana, according to Cargill. 

Cargill sources and purchases cocoa directly from certified farmers, building stronger relationships both with them and their communities, under the LBC model. 

Around half of the sustainable premium payments are used directly by the farmers to increase productivity with investment in a range of projects such as crop financing and protection, distribution of fertilizer and improving logistics and infrastructure. 

The other 50 percent is used by the wider community to support education, healthcare and women empowerment initiatives, making a significant contribution to improving the livelihoods of cocoa farmers and their communities, complementing other community projects undertaken through the Cargill Cocoa Promise. 

Cargill Cocoa has set a 2025 target for achieving zero incidents of child labor in its supply chain as part of the company’s Cocoa Promise. But to achieve this, it is crucial to understand and address the underlying causes of child labor, the company claims. 

In July, during an interview with FoodIngredientsFirst, Taco Terheijden, Director of Cocoa Sustainability at Cargill Cocoa & Chocolate, reflected on efforts so far to tackle child labor in the cocoa sector.

You can read more on this here. 

Direct sourcing 
Pieter Reichert, Managing Director of Cargill’s cocoa and chocolate business in Ghana, says direct sourcing puts cocoa farmers at the heart of our business and means Cargill has become the partner of choice for cocoa farmers in Ghana.

“Farmers recognize that, as well as a higher income, our approach offers them a wide range of support services to help them improve the quality and quantity of cocoa beans produced,” he says.

“Such services, delivered under our Cargill Cocoa Promise, include one-on-one agricultural coaching, farmer field schools, high-quality seedlings and resources for pest and disease management. The model benefits everyone in the supply chain – farmers, who livelihoods improve and Cargill and our customers, who have access to more certified cocoa.”

The LBC is fully e-money enabled, which is unusual for the Ghanaian market. This allows Cargill to pay farmers directly by electronic transfer, ensuring the money reaches the grower swiftly, safely and accurately.

“We hope that our electronic payment model which has proven to benefit the farmers, will help encourage the government to fulfill its vision of a cashless economy,” adds Reichert. 

Currently operating in seven districts of the Western North (Awaso, Anhwiaso, Wiawso, Asawinso) and Ashanti (Effiduase, Nyinahin and Ampenim), the success of the LBC has led to four further districts joining the initiative for the next crop season.

Cargill’s work in Ghana
Cargill has been buying cocoa from Ghana for more than 40 years. Operations were given a serious boost in 2008 when the company opened its state-of-the-art cocoa processing facility in Tema, a city on the Bight of Benin and Atlantic coast of Ghana.

It now has more than 400 permanent and contracted employees processing cocoa products to serve food and confectionary customers both domestically and abroad while its animal nutrition business provides an aquafeed which is supporting Ghana’s tilapia fish industry. 

Two years ago, the company added a licensed buying company (LBC). These operations bring innovative ways to trade with Cargill’s farmers emphasizing sustainability and traceability efforts as well as building on the company’s long-term commitment to the country and its relationship with the Ghanaian government.