This blog post is an ongoing series featuring speakers from the 2014 Net Impact Conference.
Increasingly, consumers want to feel good about not only their chocolate, but also where it comes from. Find out what you need to know with this behind-the-scenes look at the cocoa industry.
1. Demand for cocoa has been rising steadily, at a rate of between 2% and 3% a year, and demand for sustainable chocolate is rising worldwide. We know consumers are increasingly interested in where their food comes from and how it has been produced. We think about not only sustaining the supply of cocoa to meet demand, but sustainably growing cocoa, with respect for the environment and for the farmers who work hard to bring cocoa to the world. It’s about the planet, the people, and profits.
2. Cocoa trees need a tropical climate to grow and to produce cocoa beans.
So where on the planet does cocoa come from? Côte d’Ivoire and Ghana are the largest cocoa producing countries in the world; the crop in Côte d'Ivoire, alone, accounts for over 40 percent of the world crop. In some of these regions, soil fertility is low, biodiversity is poor, and pests and disease are threatening the quality of farmland. Adding to that, many cocoa trees are aging.
3. At around 20-30 years old, cocoa trees enter a stage where their productivity slows down.
Farmers have to work hard to keep up with demand, and they’re losing interest. Many of them have little access to helpful education about agricultural practices, such as the proper use of pesticides and insecticides.
We believe it’s essential that farmers continue to succeed and that cocoa is produced sustainably. That’s why we have established the Cargill Cocoa Promise, which is our commitment to improving the livelihoods of farmers, their families, and their communities and, in doing so, securing a long-term supply of cocoa. We’re focused on three areas that we believe can make a real and lasting difference: farmer training, community support, and farm development.
A key part of that effort is the certification of cocoa, which incentivizes best practices. Excellent quality cocoa beans can be “certified” and earn cocoa farmers a premium. We took a vital step toward sustainability by becoming a founding partner of the UTZ Certified cocoa program – which is encouraging better farming practices, improving quality and yields, and raising farmers’ incomes. We also participate in Fair Trade and Rainforest Alliance certification.
Our Farmer Field Schools are also playing an important role in enabling farmer cooperatives to become certified – for more than 10 years, they have been teaching farmers how to improve their crops.
4. Almost all of the world’s cocoa is grown on farms averaging 2-3 hectares.
Smallholder farmers are vital to the cocoa supply chain, but they face many challenges. The average age of a cocoa farmer is about 48, relatively old in cocoa-producing countries of Africa, where the median age is about 20. Their work isn’t terribly attractive to the younger generations. In fact, the children of smallholder farmers are more and more being attracted to the cities for education and for work.
CocoaAction, supported by the world’s leading cocoa and chocolate companies, is focusing on sustaining the cocoa industry and improving the livelihoods of cocoa farmers, particularly in the Cote d’Ivoire and Ghana. The CocoaAction platform puts very clear goals in place. By 2020, CocoaAction intends to train and deliver improved planting material and fertilizer to 300,000 cocoa farmers and empower communities through education, child labor monitoring, and environmental protections. The effectiveness of CocoaAction will be measured through adherence to key performance indicators, and progress will be publicly reported on a regular basis.
For sustainability to really take root, it’s critical to help create a thriving cocoa sector for generations to come. We are training farmers in better farming practices to help improve yields, crop quality, and incomes, and we reach them through cooperatives and organizations that provide farmers with better access to markets and infrastructure. Strengthening farmer organizations improves social and economic conditions for farmers.
5. More players in the industry are involved in sustainable cocoa efforts today than ever before.
We set-up the Cargill Coop Academy, a unique, industry-first program, which gives cooperative leaders the skills they need to be more professional, efficient, and successful. Recently, the International Finance Corporation (IFC) and Cargill teamed up to invest $2.5 million in the Coop Academy. We do these programs through our partnerships with NGOs as well as government. It helps that so many industry players are working together, including chocolate companies, traders, processors, NGOs, certifiers, and governments.
If anything is clear about the multi-level and complex challenges faced by the cocoa industry, it’s that a balanced approach is required in order to accelerate progress toward a transparent global cocoa supply chain that enables farmers to achieve better incomes and living standards and that delivers a sustainable supply of cocoa and chocolate products.
We are continually adapting our approach and looking for new opportunities to work more effectively with our partners and, ultimately, make a bigger difference.
Hugo van der Goes is Vice President, Cocoa and Chocolate, North America at Cargill. He spoke at this year's Net Impact Conference at the People, Profit, Planet: Big Business and the Bottom Billion session. Did you miss the conference this year? You can watch video of several sessions, including keynote speeches! Watch now.