Sustainability and value chain of the cocoa sector
Cocoa farming is an activity of small farmers. The international market of chocolate and other products of this crop depends substantially on the production of small farms in developing countries from Africa, Asia and Latin America. The demand of these products is an opportunity for all members of the value chain in the cocoa industry, especially for small producers.
The cocoa industry must be prepared for fluctuations in market prices and for people’s new consumption habits. It is common that sometimes the quality and efficiency of cocoa are not sufficient. In addition to climatic reasons, practices implemented by producers are often obsolete and there are few financing options for them. In addition, farmers’ ability to organize themselves as a company tends to be limited.
On the other hand, the cocoa sector has not been benefited from the same amount of research as other crops, such as corn and wheat. Clearly, in times when prices and crop yields are low, farmers are the ones who are affected. Sometimes they don’t even have enough to cover the costs of production.
It is necessary that the international cocoa industry works to achieve closer relations between producers and traders. The aim is to strengthen the position of producers through a combination of greater quantity and quality of production, diversified crops and access to new markets that demand more specialized sources such as chocolate products. Such collaborations can be essential to provide additional income to farmers and transform minor cocoa farms in profitable small businesses.
An important step towards strengthening cocoa’s value chain is that the industry evolves from a business model that depends on price and volume to another one based on the offer of value-added products. This alternative will allow the industry to offer prices that clearly exceed those listed on the main market of traditional cocoa. A clear example of these value added products is fine flavor cocoa. Even though it is a small market (currently totals only 5% of world cocoa production), demand for this product has been growing rapidly in recent years.
EcoKakao is implementing and leading the Ecuadorian cocoa sector sustainability best practices. Through programs like Aurora QTS, developed in alliance with Blommer US and Costco, the company seeks to create opportunities for producers. The support focuses on training to help them upgrade production practices, improve their organizational skills and strengthen their position in the value chain. With this program Ecokakao has helped more than 2000 families in the cocoa industry.
Despite the good efforts, the challenges in terms of sustainability go beyond the capabilities of a single company. In order to improve the value chain in the industry, it is mandatory the synergy with other public and private entities such as industry players, government and civil society organizations.