Cocoa production at a tipping point

With over half a century of volatility and a steady price decline, the cocoa industry has grappled with significant economic, environmental and social challenges. 

The once prosperous cocoa economy has brought hardship in recent decades for countless small-scale producers who cannot secure a decent income.

Recognising the dire need for change, Côte d’Ivoire and Ghana, the powerhouses which account for nearly 70% of the world’s cocoa production, took a bold step forward, establishing the Côte d’Ivoire-Ghana Cocoa Initiative (CIGCI) in 2018.

The CIGCI initiative aims to secure remunerative prices for cocoa farmers, enhancing their livelihoods, and also advocates for the common interests of member countries on the global stage.

Speaking on Sunday Night on Asaase 99.5, Alex Arnaud Assanvo, the executive secretary of CIGCI, shed light on the position of the cocoa industry, revealing a landscape riddled with challenges yet ripe with opportunities for transformation.

History of cocoa production in West Africa

While cocoa originated in South America, cocoa production in West Africa started in the 1800s.

The first large-scale production was in the 1880s on Portuguese plantations on the islands of São Tomé and Príncipe.

The venture into the “black gold” of cocoa production in Ghana began in 1876 with Tetteh Quarshie, who gradually expanded commercial cultivation of the crop. It spread from his pioneering farm in Mampong-Akuapem to other areas of the then Gold Coast.

Côte d’Ivoire started cocoa cultivation around the 1890s. It is now the world’s largest producer of cocoa.

Formal cocoa production started in the 1970s and eventually spread across the country. Nevertheless, this expansion has left heavy deforestation, with over 80% of Côte d’Ivoire’s forest disappearing in the span of 60 years.

Ghana has experienced the same problem on an even larger scale: some estimates suggest Ghana has lost in excess of 90% of its forested land over the same period, with swaths of the deforestation caused by cocoa cultivation.

Challenges and solutions in cocoa production: a CIGCI perspective

Price volatility and market dynamics

A recurrent theme is the struggle of cocoa farmers with price volatility and the inability to earn a decent income.

The European Union, which is the primary importer of cocoa, has given cocoa-producing countries, among which Ghana and Côte d’Ivoire figure large, limited influence in price setting.

Assanvo described the Living Income Differential (LID) as “a new price mechanism … to secure the farmgate price that will go to the farmer”.

He emphasised that while the CIGCI is not creating trade rules with the LID, the members want to focus on “where we have power”.

Environmental sustainability

Deforestation is a critical issue for the two leading producer countries: Côte d’Ivoire and Ghana.

The EU Deforestation Regulation (EUDR), set to come into force on 30 December 2024, will ensure that products such as cocoa that the two countries place on the market do not cause deforestation.

To mitigate deforestation, the CIGCI has developed national traceability systems which comply with the EU legislation.

These systems will not only identify the origin of the buyer and the cocoa but also provide much-needed support to small-scale farmers.

Social issues

Despite being a top cocoa producer, Côte d’Ivoire struggles with child and slave labour among cocoa farmers.

One estimate found that 30% of children working on Ivorian cocoa farms do not attend school.

Assanvo also noted that over the past three years, there has been an increase in smuggling across borders for both Ghana and Côte d’Ivoire.

He urged leaders in the respective neighbouring ECOWAS countries to take action to mitigate the problem.

The road ahead

Assanvo also said that Cameroon and Nigeria, which have expressed a formal interest in the CIGCI, may soon join the initiative.

Watch the full “Sunday Night” interview with Alex Assanvo of the CIGCI here.

However, he stressed that there will need to be several further internal processes for the membership to translate in real time. Without specifying which ones, he also said there are other countries which have expressed an interest informally in joining the initiative.

Alex Assanvo remains optimistic and believes the current order offers a critical opportunity for cocoa to emerge as a leading force for positive change in global agriculture.

“We had to struggle to implement the Living Income Differential. There was a lot of manipulation, there was a lot of bashing, there were a lot of claims that the differential would never work,” he said.

“Three years later, we have imposed the mechanism. It’s listed into the exchange rules. We have managed to get the country premium – this is one other thing that was used to manipulate our price down …

“The [European Union] deforestation and other rules that will be coming in are … fair: Europeans can decide what they want to enter into their countries. In the meantime, we also have started to define the value of the product going outside our countries.

“I think that’s where the two things are merging, because we see this as an opportunity,” Assanvo said.

Stacey Sam

Asaase Radio 99.5 broadcasts on radio via 99.5 in Accra, 98.5 in Kumasi, 99.7 in Tamale, 100.3 in Cape Coast and on our affiliates Azay FM 89.1 in Takoradi, Bead FM 99.9 in Bimbilla, Mining City 89.5 in Tarkwa, Sissala Radio 96.3 in Tumu, Somuaa FM 89.9 in Gushegu, Stone City 90.7 in Ho and Wale FM 106.9 in Walewale
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