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Cocoa Cycles. The Economics of Cocoa Supply..

January 1995

Publisher: Woodhead Publishing
Editor: François Ruf and P.S. Siswoputranto
ISBN: 1 85573 215 7

Authors:

French Agricultural Research Centre for International Development

The availability of tropical forest and massive migration have for centuries been the main factors in the shifting of production centres and in cocoa market cycles. Tropical forest and ‘labour reservoirs’ in neighboring regions play the historical and economic role of the mine for cocoa. Does mining contain the seeds of its own end? The planters' innovations mentioned above, adaptation to ecological and social change, technical progress and capital can modify this apocalyptic pattern. However, until recent years, the slowness and poor efficiency of the replanting process observed in all countries reflects the technical, economic and social difficulties of replanting and history seems to repeat itself. When a new country starts to produce cocoa and uses its forest rent, an "old" producer country finds it difficult to resist on the international market. The new country can withstand falling prices thanks to its rent while the other weakens. This is the main factor explaining all the shifts in production centres throughout history. Social conflicts and policies often tend to aggravate the bust. While explaining the dynamics of the cocoa supply the authors contribute to greater understanding of major ecological, economic and institutional changes occurring in rainforest and former rainforest regions. They analyze in detail the factors behind conversion of forest to smallholders’ farms in several countries. The problems of labor supply, geographical shifts in production and the consequences of disease are explained and the ecological and technical base of cocoa production examined in the light of powerful economic, social and political considerations.

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iii

Cocoa cycles

The economics of cocoa supply

ISBN 1 85573 215 7 234 x 156 mm 400 pages

Preface

by I. Hasan, ASKINDO, ............................................................... ... vii

From "Forest Rent to "Tree Capital":

Basic "laws" of Cocoa Supply

by F. Ruf, CIRAD/ASKINDO, ...................................................... 1

The Role of Speculative Activity in Determining

International Cocoa Prices in the New York Futures Market

by M.M. Amin, CEPLAC, .............................................................. 55

Cocoa Harvest Shortfalls in Bahia, Brazil:

Long and Short Term Factors

by I.M. Cazorla, L.P. Dos Santos Filho and A. Gasparetto

CEPLAC, ......................................................................................... 75

Regeneration of Cocoa Cropping Systems:

The Ivorian and Togolese Experience

by P. Petithuguenin, CIRAD, ......................................................... 89

Land Pressure, Farm Household Life Cycle

and Economic Crisis in a Cocoa-Farming Village

(Côte d'Ivoire)

by J.P. Chauveau, ORSTOM, ........................................................ . 107

Cocoa Smallholders Facing a Double Structural

Adjustment in Côte d'Ivoire: Responses to

a Predicted Crisis

by E. Leonard and M. Oswald, ORSTOM, ................................... 125

The Present Cocoa Crisis and its Impact

on Protection of Cocoa Crops against Pests:

The case of central-western Côte d'Ivoire

by G.K. Konan, IDESSA, ............................................................... 151

Cocoa Production in Cameroon: a Comparative

Analysis with the Experience of Côte d'Ivoire

CONTENTS

by B. Losch, CIRAD, ..................................................................... 161

Prospects for Ghana's Cocoa Industry

in the 21st Century

by V.K. Nyanteng, ISSER, ............................................................ 179

The Shifting of Cocoa Production Areas in Nigeria:

Past, Present and Future Trends

by O.O. Oduwole, CRIN, ................................................................ . 209

Prospects for the Cocoa Economy in Equatorial Guinea:

a High Quality Market Niche?

by C. Jakobeit, Freie Universität Berlin ........................................ 219

The Cocoa Crisis and Land Reform in São Tomé e Principe

by W.G.Clarence-Smith, SOAS, ..................................................... 233

Ivorian and Malaysian Cocoa Supply:

A comparative study of structures and performance

by F. Jarrige, INRA, ...................................................................... 244

The Economic Complementarity of Cocoa and Coconut

Intercropping: Asset Strategies of Smallholders

in Malaysia and Implications for Cocoa Supply

by P. Dupraz and R. Lifran, INRA, .............................................. 281

Government Policy and Smallholder Changes

in Sustainable Tree Crop Development in the Tropics:

A Comparison of Rubber and Cocoa

by A. Gouyon, CIRAD, .................................................................. 291

Farmer Strategies and Agricultural Development:

The Choice of Cocoa in Eastern Indonesia

by F. Durand, CIRAD..................................................................... 315

The 'Spectacular' Efficiency of Cocoa Smallholders

in Sulawesi: Why? Until When?

by F. Ruf, Jamaluddin, Yoddang and Warris Ardhy ............. . 339

Index .......................................................................................................... 377

Towards sustainable cocoa in Ivory Coast. The impacts and contribution of UTZ certification combined with services provided by traders

Technical Report

Full-text available

May 2018

Sustainability issues are urgent in cocoa production in Côte d’Ivoire. The cocoa sector continues to face deeply embedded, interrelated challenges around productivity; low income and working conditions; scaling up grouping and service delivery to farmers; negative environmental impacts; and a tight supply and demand relationship with recession and expansion affecting global market and farm-gate prices. This report analyses the contributions of UTZ and the interventions of companies implementing UTZ certification with groups of farmers in Côte d’Ivoire. The outcomes analysed are increased yields, improved income, improved working and living conditions, and better environmental protection. UTZ initiated a certification programme for cocoa in Côte d’Ivoire in 2008. By 2012 the programme covered 189 cooperatives comprising over 44,624 cocoa farmers and partnerships with eight companies. In 2017 the programme had grown to 425 UTZ certificate holders comprising 330,000 farmers and seven partners (due to mergers). In 2012, UTZ, IDH and Solidaridad commissioned WUR to determine the effects of the UTZ certification programme, starting with a baseline study. This report presents a follow-up with the results of the independent endline survey. To explore the expected pathway of impacts at farmer household level, changes at farmer group level, company and service provider were analysed using a mixed method approach, based on interviews in 2013 and 2017 with 944 and 426 cocoa farmers respectively, interviews and data from cooperative managers, UTZ and companies. Using a counterfactual, a statistical analysis and qualitative content analysis, comparisons were made of results for 2013 and 2017, of UTZ compared to non-certified farmers, and of farmers receiving different types of services and service packages, and varying intensity of services. The results indicate that farmers do gain knowledge and implement good agricultural, social and environmental practices, with knowledge and implementation rates improving between 2013 and 2017, especially for non-UTZ farmers. However, knowledge and implementation rates are still low for both UTZ and non-UTZ farmers. Whilst implementation rates are generally higher than farmer's knowledge, barriers were found for fertiliser application and handling diseased pods. The extent to which cocoa farmers implement good practices as a result of certification, training and other services, has been mixed and limited. UTZ certification plus service packages have not resulted in changing farmer practices to the extent expected. The intensity of training and services decreased over time, levelling out knowledge and implementation improvements. Non-UTZ farmers have also benefitted from training and services between 2013 and 2017. The question of whether adopted practices lead to better lives, incomes, crops and environment was answered by looking at four main areas derived from the UTZ theory of change. Farmers receiving high intensity service packages are most impacted. UTZ farmers continue to have significantly higher cocoa productivity than non-UTZ farmers. Changes in productivity on a seasonal basis however are attributed largely to the weather. Over time non-UTZ farmers are catching up to similar yields as UTZ farmers. Farmers generally produce under potential, on average 480 kg/ha, indicating there is still room for major improvement. UTZ farmers had significantly higher net cocoa income per hectare in 2017 than non-UTZ farmers. Total cocoa income per household member/day for 2017 is similar for UTZ and non-UTZ farmers. Cocoa per capita incomes remain low, at USD 1.25 per day. UTZ farmers have seen improvements in their lives, working and living conditions, whereas non-UTZ farmers have experienced fewer changes. UTZ farmers perceive improvements in water and soil, but non-UTZ farmers note few changes towards a better environment. Positive spill-over effects were also detected, although not anticipated in the pathway to change, contributing to the impact of certification. Service packages appear to work, with specific packages ('agricultural training + one input' and 'agricultural training +pesticides and fertiliser' packages) being significantly associated with increased productivity and net cocoa income improvement for UTZ farmers. Although the pathways to impact and change are largely confirmed, there remains a gap between what certification is expected to deliver and what it actually has delivered. Impacts have not been felt by all UTZ farmers, and the level of impacts have generally been marginal for crop productivity, incomes and the environment. Lessons learnt from this study are that: UTZ certification alone has not led to impacts such as improving farmers' livelihoods beyond poverty levels and assuring social risk-free cocoa. One reason is that productivity and income increases are levelling off, with results suggesting that a ceiling has been reached as productivity increases for UTZ farmer plateauing while non-UTZ farmers are catching up to the levels experienced by UTZ farmers. Confirming the theory of change, pathways to impacts were largely as foreseen: well-functioning cooperatives formed a vehicle to certification, providing packages of services to members. Training and adherence to the UTZ Code of Conduct generally is associated with better crops, incomes and environmental outcomes and knowledge is applied in practice. There were also unanticipated outcomes at producer and company level and the professionalisation of farmers and cooperatives; increased intensity and broader range of services alongside certification and increased farmer satisfaction with cooperatives. There appear to be positive spill-over effects as non-UTZ farmers come into contact with certified farmers, learn and adopt similar techniques to generate higher productivity and cocoa-related income. Certification has functioned as a vehicle to which services have been attached, enabling an increased intensity and broader package of services to be provided. Recommendations: 1. Focus on topics that matter most: target interventions to match farmers' demographic, economic and farm characteristics, with tailored mixes of service packages that focus on farmers' specific needs and the most problematic practices relating to child labour, input use, shade trees and waste management. 2. Identify barriers and enablers to improve sustainable cocoa production and livelihoods: current incentives of certification and associated services are insufficient to motivate all value chain actors, requiring investments to close sustainability gaps and reinventing tools to sufficiently and adequately implement and diagnose and address sustainability gaps and underlying causes. This includes tensions of (over)supply and low prices which harm farmer incomes, risk mitigation and accessing more profitable value chains, and enabling access to credit. 3. Combine a high intensity package of Good Agricultural Practice training plus pesticides and fertilisers to have higher impact. 4. Engage with complementary sector level interventions, based on evidence of what works. 5. Facilitate the meeting of bottom-up farmer and top-down industry and government visions. 6. Take a transformational approach to provoke systemic change in the Ivorian cocoa sector.

Lead Firms in the Cocoa–Chocolate Global Production Network: An Assessment of the Deductive Capabilities of GPN 2.0

Article

Full-text available

Apr 2018

Recent models of Global Production Network Theory (known as GPN 2.0) have attempted to theoretically explain the underlying determinants, or causal drivers, of particular industry network configurations, which in turn shape the territorial outcomes for regional development. To date, the ability of this ambitious conceptual model to thereby explain economic geography has remained largely untested beyond the select industry networks examined by its proponents, most notably the electronics, retail, and automotive sectors of East Asia. In this article, we stress test the causative model for the case of lead firms in the global cocoa–chocolate sector, and assess its ability to subsequently explain industry configurations and territorial outcomes in a particular country: Indonesia. Our application suggests that GPN 2.0 has considerable utility for directing empirical research, but challenges beset its fuller theoretical promise. We identify a problematic relationship between the deductive causality implied by GPN 2.0 and the inherent relationality of GPN 1.0 that remains, in our view, unresolved. As a result, we remain skeptical of the broader theoretical claims that GPN 2.0 possesses explanatory powers capable of deducing industry network configurations from a discrete set of supposedly independent variables.

Richer histories for more relevant policies: 42 years of tree cover loss and gain in Southeast Sulawesi, Indonesia

Article

Full-text available

Jul 2016
GLOBAL CHANGE BIOL

Understandings of contemporary forest cover loss are critical for policy but have come at the expense of long-term, multi-directional analyses of land cover change. This is a critical gap given (i) profound reconfigurations in land use and land control over the past several decades and (ii) evidence of widespread "woodland resurgence" throughout the tropics. In this paper, we argue that recent advancements within the field of land change science provide new opportunities to address this gap. In turn, we suggest that multi-decadal and multi-directional analyses of land cover change can facilitate richer social analyses of land cover change and more relevant conservation policies and practice. Our argument is grounded in a case study from Southeast Sulawesi, Indonesia. Using a novel analytical platform, Google Earth Engine, and open access to high-quality Landsat data, we map land cover change in Southeast Sulawesi, Indonesia from 1972-2014. We find that tree cover loss constitutes the single largest net change over the period 1972-2014 but that gross rates of tree cover gain were three times higher than gross loss rates from 1972-1995 and equivalent to loss rates from 1995-2014. We suggest the smallholder tree crop economy likely produced both forest loss and Imperata grassland restoration in this region. This case points to the need to expand rather than collapse the baselines used to study carbon and biodiversity change in tropical regions. It also demonstrates the possible utility of applying such methods to other regions. This article is protected by copyright. All rights reserved.

THE AID AND GROWTH DEBATE CONTINUES

Working Paper

Full-text available

Jun 2015

Ozan Harman

Cacao Capitalism and Extended Urbanization: On the Contradictory Origins of Bounded Urbanism in Nineteenth‐century Coastal Ecuador

Article

Nov 2020

Robert Priessman Fenton

This article challenges both contemporary and classic urban theory by analyzing the historical case of coastal Ecuador. Working from primary and secondary sources, I track the urbanization of coastal Ecuador during the long nineteenth century, when cacao exports determined not only the economic wellbeing of the city of Guayaquil, but of the entire tropical lowland region. I argue that this extended urban geography was both experienced and practiced as an unbounded economic and cultural region. As the value of cacao exports skyrocketed, capitalists in the city invested in infrastructural projects and financial instruments, divorcing money‐making from cacao production. After the Gran Incendio (great fire) of 1896, the city was rebuilt according to the ideals of modern liberal planning that further separated the city from the country symbolically, despite their continued material interconnection. This work suggests that long histories of capitalist urbanization provide material and theoretical support for critiquing bounded urban theory both past and present, by moving beyond the city and highlighting the processes undergirding spatial production under capitalist social relations. Likewise, this historical case study argues that city‐centrism, rather than being constituted epistemologically, was tied to liberal notions of the urban based on nineteenth‐century ideologies of modernization and progress.

Host preferences of the cocoa pod borer, Conopomorpha cramerella, the main threat to cocoa production in Southeast Asia

Article

Mar 2020

Insects ensure the survival of their offspring by depositing their eggs in suitable environments. Even generalist egg‐laying insects often show preferences for specific host plants. The cocoa pod borer (CPB), Conopomorpha cramerella (Snellen) (Lepidoptera: Gracillariidae), successfully infests and reproduces on relatively few host plants, but has a major economic impact only on cocoa, Theobroma cacao L. (Malvaceae). Choice tests were performed in the laboratory to compare the frequency of insect visits, the duration of the visits, and the number of eggs laid on the fruits for each combination of host plants tested – that is, cocoa clones or fruits of rambutan (Nephelium lappaceum L.), Fijian longan (Pometia pinnata JR Forst & G Forst, both Sapindaceae), and langsat (Lansium domesticum Corrêa, Malvaceae). Our laboratory study showed that, when given the choice, CPB significantly favored cocoa pods over other host fruits (rambutan, langsat, or Fijian longan). Females also deposited more eggs on unripe fruits than on ripe fruits of similar size. The preference to lay eggs on specific cocoa clones in the bioassays did not reflect the level of the clone resistance to CPB damage reported from the field. Consequently, oviposition preference of female CPB does not seem to be the main factor explaining field resistance of some cocoa clones to CPB infestation. The cocoa pod borer, Conopomorpha cramerella (Lepidoptera: Gracillariidae), is a pest of several plants. Choice assays demonstrated preferences toward cocoa fruits, Theobroma cacao (Malvaceae), when compared to fruits of other host plants (rambutan, langsat, or Fijian longan), with additional preference for unripe pods. These preferences explained the high impact of this pest on the cocoa production, but they do not seem to explain the resistance of some cocoa clones to cocoa pod borer infestation in the field.

Field evaluation of cacao progenies derived from Guiana clones for yield and black pod disease resistance

Article

Full-text available

Mar 2020
CROP SCI

Phytophthora spp. is a major disease of cacao (Theobroma cacao L.), and there is a need to develop cultivars that are resistant to this disease. Among the various genetic groups of cacao, the Guiana (GU) has received little attention in developing varieties even though they are known to be tolerant to black pod disease. The objective of this study was to estimate combining abilities and heritability of selected GU clones for bean yield and black pod resistance. Twenty‐four F1 progenies were derived by crossing three seed garden parental clones with eight GU clones as males in a three‐by‐eight North Carolina II (NC II) complete factorial mating design. These were evaluated together with four standard varieties over a 4‐yr period in a randomized complete block design with four replications at two contrasting locations in Ghana. Progeny, year, and location effects were significant (p < .01) for all traits, whereas progeny × location was significant for only number of beans per pod. The general combining ability (GCA) effects of females and males and specific combining ability (SCA) of female × male were significant (p < .01) for all traits, indicating that both additive and dominant effects are important in the inheritance of the traits. Heritability ranged from 0.14–0.51 for broad sense and 0.10−0.37 for narrow sense. The best general combiners identified—GU 125/C, GU 144/C, and GU 290/H—were involved in crosses that combines high bean yield with high black pod resistance. They could be added to parental clones currently used in producing cacao varieties in areas with high black pod incidence.

Towards sustainable cocoa in Ivory Coast. The impacts and contribution of UTZ certification combined with services provided by traders

Technical Report

Full-text available

May 2018

From Extensive to Involutionary Growth: A Dialectic Interpretation of the Boom and Busts of Cocoa Production in the Gold Coast

Article

Mar 2016
J AGRAR CHANGE

Erik Green

African economic history has undergone impressive revitalization in the past decade. Much of the recent work is, quite naturally, inspired by developments in economic history at large, and increasingly – indirectly or directly – using markets as the organizing principle in understanding how economies evolve over time. More specifically, recent work assumes that markets create the possibility to use resources more efficiently, which, theoretically, enables economies to grow as long as institutions adjust and enable the population to exploit the arising opportunities. That is, the current works in African economic history are to a large extent grounded in Smithian growth models, labelled after Adam Smith's work on the mechanisms of long-term growth. This paper critically discusses the explanatory value of the Smithian growth models for understanding the long-term economic development in Africa. The latter is best described as recurrent growth episodes, and we argue that while Smithian models can account for initial periods of growth, they fail to explain why the growth was not sustained. We use the boom and busts of cocoa production in Ghana in the twentieth century as a case in point. We show that the decline in cocoa production was not caused by state policies distorting the functions of the markets, as the Smithian growth models suggest. Instead, the decline in production was an outcome of changes in the ecological and institutional conditions that caused the initial growth. The irony is that it was the initial growth in cocoa production that altered the conditions, making further growth in production impossible. We capture these changes – for the first time ever – by combining the concepts of forest rents and involutionary growth in an African case.

Property, Authority and Citizenship: Land Claims, Politics and the Dynamics of Social Division in West Africa

Chapter

Mar 2010

Sara Berry

IntroductionDisappearing Frontiers: Struggles Over Land and Citizenship in Several Rural LocalitiesWho is a ‘Stranger’?Who Participates, Who Decides? Power, Territory and Multi-Party ElectionsConclusion References

ResearchGate has not been able to resolve any references for this publication.

Cocoa Cycles. The Economics of Cocoa Supply..

Abstract

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