Yara International : Fixing a broken cocoa

Oslo, January 17, 2017

On January 5, a roundtable discussion among cocoa sector players, hosted by Yara international, discussed challenges to the sustainability of the cocoa sector in West Africa, and potential ways forward.

The contrast could not have been any bigger, on a cold, January morning, cocoa experts from all across the world gathered at the Yara House to discuss the future of this very popular commodity. The global demand for cocoa increases 2-3% annually. However, productivity is low, and falling. By 2020, a global cocoa deficit of approximately 1 million tonnes is expected. Some 70% of the global cocoa supply is produced in West Africa by smallholder farmers.

The sector is looking ahead at several major challenges-ageing farmers, ageing trees, diseases, and the impacts of climate change. There are shortages of fertilizer and other inputs, as well as knowledge on nutrition, tree physiology and better management practices. And then there are the reputational issues in West Africa-smallholder producers live well below the poverty level, child labour is common and increasing, and cocoa is the largest driver of illegal deforestation (including inside national parks) of any commodity in key producing countries. The premise of the discussion was that business as usual is not working and new approaches are needed. In short, cocoa is broken and needs to be fixed.

A new start and new structure

For too long, business as usual has allowed critical indicators to worsen. However, for a sector that needs a new start and new structure, the Cocoa Roundtable is a way to get momentum behind new forms of collaboration.

'We need a fresh look. We cannot keep doing the same thing the same way and expect different results' said Svein Tore Holsether. Holsether gave an opening statement where he also talked about Elizabeth Sarfo, a Ghanaian cocoa farmer who has been able to increase productivity, increase her economic results and, thus, finance both a proper home for her family as well as education for her kids.

Participating delegates represented a variety of companies and organizations like Erik Solheim, Head of UN Environment, to representatives of well-known chocolate consumer brands, and Richard Asare from the International Institute for Tropical Agriculture, a reputable R&D institution part of the CGIAR network. The broad experience was present, but what came out of the day?

We spoke with Jason Clay, Senior Vice President, Food & Markets in World Wildlife Fund, who acted as moderator throughout the day.

'The reason for having this meeting, is that cocoa is broken; we need to fix it', Mr. Clay said opening the conversation. 'Invasion of national parks, deforestation, extreme poverty amongst cocoa farmers, child labour are some of the issues that pose reputational risks to the entire sector. We need to find ways to solve them', he continued. 'We do not 'need' cocoa as a food, but everyone loves cocoa. As a result, cocoa can serve a bigger purpose building an example for other tree crops, such as coffee, palm oil or rubber, because this is a sector that is small enough and concentrated enough that we can actually do it right, but we haven't done that yet', Mr. Clay said.

Getting it right in cocoa

The global cocoa sector accounts for only 8 million hectares. There are 6-8 countries that produce 90% of cocoa globally, and just 6-8 companies buy 80-90% of that produce. The cocoa sector has millions of producers, but not nearly as many as coffee. Thus, there are things that are possible in cocoa that are not possible in other sectors. By getting it right in cocoa, useful insights can be drawn for other sectors as well.

'So the point of having this meeting in Oslo was to take a step back from all of the other meetings and agendas, and say what are the most significant problems about cocoa right now, which are not being worked on or where the current work streams have not produced the results we want to see, how would you sequence what you would have to do first, who's responsible for them and how can we all help make this happen faster. By taking up the sustainable cocoa productivity challenge agenda in Oslo we hoped it would create a neutral space where key people would have an opportunity to talk more openly about issues complicating the sustainable cocoa agenda and ways to overcome them,' said Mr. Clay.

The dialogue will continue including not only private sector companies, traders and organizations, but also governments and national authorities.