Ghana's cocoa traceability system delivers bankable returns for farmers

Whether it is about the nativity claim of Cocao to the North Americans, or the bragging rights as the largest producers and exporters of Cocoa to the West Africans, the tempting licking mind game of tasting chocolates knows no bounds, not the young or old, even for the haves and have-nots. To the colonial apologetics, maybe with the league of Asian giants inclusive, the magical scene of a dark-skinned person taking a piece of a bar of chocolate or hand-licking without biting the finger still stands as their 10th wonder of the world. 

Go past the debate of who has the cocoa supply chain in their pockets, or the multinational companies behind the determination of the value proposition of cocoa to their profitability and loss matrix. Forget about the long-standing tag-of-war by persons with significant interests (PSIs) about the price points and pain equilibria, or the regulatory doses of quality checks and standards, what is “giving”, – transliterated in my country’s parlance as contemporary or trending, is the conversation of sustainability that has somehow been tied to the umbilical cord of the cocoa farming business.

Sustainable cocoa farming practices have not only become a crucial conversation regarding the alignment of profitability with environmental and social stewardship, but also the determination of economies such as the European Union (EU), through the ambitious EU Deforestation Regulation (EUDR) which aims to minimize the EU's contribution to global deforestation and forest degradation by ensuring that certain commodities placed on the EU market are deforestation-free, has required countries like Ghana, a leading producer and exporter of cocoa, to conduct due diligence and prove that its beans are not produced on deforested land. While it seems this directive may be burdensome on a developing country whose cocoa exports, about 60-65% sit in the EU market, a partnership pilot intervention delivered by GIZ Ghana and COCOBOD and funded by the EU and the German Federal Ministry for Economic Cooperation and Development (BMZ), through the Ghana Cocoa Traceability System (GCTS) initiative, has ushered in a new era of sustainable cocoa sourcing. Simply put, tracing cocoa beans from the farm to the port of shipment is now a reality in Ghana with the introduction of the GCTS initiative. No bean is lost, sustainability is evidenced, and every dollar is accounted for. 

The value proposition of sustainability 

Whereas it will be worthwhile to share the chalked successes so far, my recent trip to a cocoa farm in the Assin Fosu region has not only confirmed the sustainability dividends accrued but has also evidenced the economic gains from the GCTS initiative to cocoa farmers, one of the very key yet distant stakeholders from the pricing room. My personal interactions during this trip revealed evidence of an unequivocal bankable return to the pockets of these farmers. To one of the farmers I engaged with, Mr. Samuel Torbi, who emerged as the Most Promising Young Cocoa Farmer in 2014, GCTS offers two rewards: first, a farm mapping activity. What this means to him is that the accessibility to accurate technologically backed knowledge of not only the acreage of his farm, which saves him money from land litigation issues, border disputes and the temptation to farm on designated forest reserves, he can calculate exactly the output per acre, an activity critical to his financial forecasting and expenditure. This supports his business documentation process, for example, should he want to access credit facilities, as he can provide robust evidence of yield to credit facility requests. Additionally, he can prevent labour contentions, which are typical of this sector, especially on the issue of how many acres a labourer has worked on. This not only affords him the luxury of managing his production cost forecast but also ensures a seamless process of ensuring fair labour wages, instituting an unambiguous wage structure benefit for both farmer and labour. No one is cheated, no one is alarmed. 

The second reward of transparency, according to Mr. Torbi, has been a lever he leverages to boost the accountability process of accounting for returns on his yield. For instance, the Purchasing Clerk (PC), who, through GCTS, knows the acreage of his farm and the expected yield, ceteris paribus, cannot make claims of discrepancies between what was received from the farmers and what is available at his depot even after months of storage. This was not the case early on, when verbal contractual exchanges of the number of bags were the order of doing business. There are no leakages, and Mr. Torbi can accurately account for his post-sale financial transactions. Thus, contentious financial accountability between farmers and PCs is a thing of the past. Thus, the economic assessment of the whole value chain is clearer and simpler with the GCTS initiative. In addition, the big add-on for him is that the GCTS initiative has also plugged in a prompt payment service using MOMO (a mobile application for financial transactions), which has not only saved him the interest he would have paid for accessing a loan facility in the interim before receiving payment, but also the rewarding feeling of experiencing prompt payment after goods receipt.

What more?

An initiative by the EU meant to establish a protocol for ensuring sustainability in the cocoa production and sourcing value chain has ignited an innovative intervention which is delivering bankable value and returns to farmers. The point is that sustainability in its concept and practice will always go beyond environmental and social stewardship to deliver economic and financial returns. The Ghana Cocoa Traceability System (GCTS) initiative, in its pilot phase, has not only succeeded in shipping 300 bags of sustainable cocoa consignments to the Netherlands through Cargill, but for the farmers in the small district of Assin Fosu, this project has announced a new dawn of financial traceability, transparency and economic return to their livelihood. 

illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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