The challenge
Deforestation is a major issue in Côte d’Ivoire (CDI) and Ghana, which together produce nearly two-thirds of the world’s supply of cocoa. Over a 10-year period, approximately 2.1 million hectares of forest have been cleared in Côte d’Ivoire and 820,000 hectares in Ghana. A quarter of this has been attributed to cocoa production.
Forests create a microclimate essential for cocoa, and forest loss creates a threat for cocoa’s production, and therefore, for the livelihoods of the hundreds of thousands of farmers who rely on it for their livelihoods. 90% of cocoa in Ghana and CDI is produced by smallholder farmers, with an average annual yield of 300 kilos per hectare. Traditional smallholder systems are challenged by unprofessional farming, ageing farms, limited access to finance and extension services, weak incentives and low incomes for smallholder farmers earning. Between 2013 – 2014, more than 2.3 million children were working as child laborers in Ghana and Côte d’Ivoire.
The cocoa is sold to international markets (such as USA, EU, Japan and Malaysia), and fetches around GBP 1300 per tonne, although this varies annually.
There is a need for cocoa cooperatives and farmers to deliver cocoa that is deforestation-free, produced without child labour, provides living income, and is fully traceable to farm gate.
The project
Phase 1
The first project with Touton (P4F-0210) focused on halting deforestation and supporting smallholders to improve cocoa sustainability in Ghana’s Juaboso-Bia landscape – a cocoa production hotspot of more than 240,000 hectares that produces 60,000 metric tonnes each year.
Touton, a cocoa trading company, led a consortium of partners that aimed to achieve a sustainable, deforestation-free cocoa landscape in Juabeso-Bia. A key part of the work was for Touton to establish a Landscape Management Board (LMB), with active participation from communities. The landscape-wide framework is to provide strong safeguards that ensure the cocoa produced is deforestation-free – a major marketing premise of the brand.
Touton-supported farmers increased their average yields (from 300 kilograms per hectare to 700), and Touton offered premium payments for cocoa produced using sustainable land use and forest protection practices. The company supported this through training on good agricultural practices, farmer business schools, rural service centres that act as information hubs for smallholder farmers, and links to credit facilities and markets.
P4F supported project partners to establish a Hotspot Intervention Area (HIA) management board in the Bia-Juaboso landscape. Executives of the Board have been elected and inaugurated, with the project successfully negotiating sub-HIA boundaries and agreeing bylaws with the communities. Training on landscape governance has been provided to the HIA executives using the landscape governance manual. In addition, farm development plans have been produced for smallholder farmers, and training on social safeguards and gender inclusion delivered to key stakeholders.
The project provided additional livelihood support to smallholder farmers as incentives for sustainable cocoa production and as part of climate adaptation strategies for the farmers and for the landscape. Conservation agreements have been signed with farmers as conditional incentives for sustainable cocoa production.
The project successfully negotiated and finalised discussions with key stakeholders such as Tropenbos, Solidaridad, Conservation Alliance, Mondelez, Ferrero, and Mars to sign a framework agreement for the Bia-Juaboso landscape. This agreement meant that Ghana’s first Emissions Reductions Performance Agreement was reached with the World Bank Carbon fund in July 2019, securing possible investments of £5.5 million into the landscape by 2023.
This collective approach has the potential to generate additional investments in excess of £50 million into the landscape in the long-term, as private capital, supply chain finance and blended finance.
Phase 2
Touton established Eliho Ghana Limited (EGL) to ensure the efficient management of its supply chain, while also providing the incentives to attract more farmers to the deforestation-free cocoa production system it had introduced. EGL became its sourcing arm. EGL has been operating since 2018 and currently works with more than 1576 societies (consisting of 45,638 farmers within all six HIA).
For the 2021/2022 cocoa season, Touton Negoce Côte d’Ivoire (TNCI) has been buying sustainable cocoa from 27 cooperatives (with five of them located in the Cavally region) with an opportunity to increase that number in the coming cocoa seasons. TNCI plans to expand and strengthen the cooperatives to be able to produce deforestation-free cocoa, so they could be introduced to the deforestation-free cocoa market.
EGL plans to grow across Ghana and has mobilised new farmers within and outside the Bia-Juaboso landscape. EGL has secured contracts (with Blommer, Lindt, etc) for some of the mobilised farmers to supply sustainable cocoa, while others have no contracts currently. However, given the rapidly growing demand for deforestation-free cocoa, EGL intends to develop the capacity of those farmers who are currently without contracts to be able to produce deforestation-free cocoa complying with Cocoa and Forest Initiative (CFI) and consumer market requirements, then present them to market for contracts. However, producing to meet requirements of the deforestation-free cocoa market does require comprehensive preparation. EGL has made a commitment with its farmers to source deforestation-free cocoa, which serves as incentive payments for sourcing outside the Protected Areas.
This forest partnership seeks to scale and replicate a ‘passport’ for deforestation-free cocoa business model piloted by Touton, which provide incentives on cocoa purchases to farmers in new landscapes in Ghana and to a new country – Côte d’Ivoire. The passport requires cocoa cooperatives to deliver cocoa that is deforestation-free, made without child labour, providing living income, and is fully traceable to the farm gate.
The main objectives of this project are to:
- Mobilise new farmers into cooperatives;
- Develop their capacity to produce deforestation-free cocoa;
- Increase carbon stocks through agroforestry, and;
- Present farmer cooperatives to market for contracts.
Project location: Juabeso and Bia Districts, Western Ghana
Impact
Phase 1
Environmental and landscape: The project has brought more than 230,000 hectares of land area under improved and enhanced management. This is expected to rise to cover the total hotspot area of just over 240,000 hectares by 2024. More than 1000 hectares of this land has been piloted with dynamic agroforestry systems, which are expected to cover 5000 hectares by 2024.
By 2022, the project had reduced GHG emissions by more than 800,000 tonnes in CO2 equivalent. The project has also developed a national forest monitoring system (to be implemented in 2023) and a climate-smart cocoa standard that will include key principles and actions for sustainable cocoa production.
Economic and social value: In line with the project strategy, farm-level cocoa productivity had increased from around 350 kilos per hectare in 2017 to 700 kilograms in 2020.
More than 56,625 smallholder farmers (more than 30% of whom are women) have been supported and trained to produce climate-smart cocoa, with incomes increasing by around 17%. Plans to provide additional livelihood options have seen more than 200,000 vegetable seedlings distributed to farmers from four new vegetable nurseries. Four rural service centres have also been set up to provide farm-level support and training services to smallholders and employment opportunities for youth and women in the project area. By 2023, more than 75,000 farmers are expected to be trained and supported to produce climate smart cocoa, with incomes expected to increase by nearly 50%.
Touton has become a sustainable commercial cocoa licensed buying company, with full control over its supply chain and proper traceability systems in place. It has invested more than £ 59 million into the supply chain, with an additional £50 million expected by the close of 2023.
Phase 2
The project is expected to bring 2,802,232 ha of area under sustainable management in Ghana and Cote d’Ivoire by the end of 2023. It is also expected to mobilize more than £51 million in investment into the landscapes. The total number of beneficiaries is expected to increase from around 58,000 farmers to more than 75,000 farmers in 2023-24. This partnership has a strong gender balance and social inclusion approach, with 30% of beneficiaries being women.