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The Board-Managed Cocoa Sector in Ghana


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Ghana has achieved sustained per capita growth over several decades, making it an economic success story. Its cocoa sector, which has seen sustained growth in exports of high quality cocoa, is no less of a success. Ghana’s accomplishments are even more significant given the poor state of the cocoa sector and of the country’s economy 40 years ago. The Cocoa Coast: The Board-Managed Cocoa Sector in Ghana seeks to understand how Ghana achieved such success without liberalizing its marketing, as Washington Consensus standards would call for, but instead through continued management by a marketing board. The authors review the history and political economy of the Ghana Cocoa Board and analyze the Ghanaian cocoa sector using various survey data on cocoa farmers. The analysis shows that government accountability for cocoa-sector performance, centralized marketing, and high export quality have been important factors in Ghana’s accomplishments. Looking forward, the authors find that Ghana could further improve its cocoa-sector performance through changes to the marketing board, including changes to reduce marketing costs. Marketing costs can be reduced through more transparent cocoa pricing and a greater role for the private sector. These reforms would offer farmers a larger share of prices and increase their access to inputs. The Ghanaian cocoa sector’s history, and The Cocoa Coast’s analysis of it, has important implications for economic development. While one school of economic thought holds that developing countries must liberalize their markets and abolish marketing boards, Ghana’s experience shows that alternative approaches are possible, and aspects of Ghana’s experience may be relevant to reforms in other sectors and in other countries. This book provides a valuable case study in how a country can achieve high production levels in an agricultural sector without full market liberalization.
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The Board-Managed Cocoa Sector in Ghana
Shashi Kolavalli and Marcella Vigneri September 2017
After almost 20 years of declining cocoa production, Ghana has been able in
the last decade to increase the share of export prices going to producers,
more than doubling production. Contrary to Washington Consensus prescriptions,
these accomplishments were achieved through reforms but without liberalization of
domestic and export marketing.
The Cocoa Coast: The Board-Managed Cocoa Sector in
Ghana seeks to understand the success of a sector that
was not liberalized. The authors identify three major
reasons for Ghana’s success in cocoa production. First,
cocoa producers receive an increasing share of export
prices, because of factors including a stakeholder-advised
process for determining producer prices that also pays
explicit attention to discouraging smuggling of cocoa
to neighboring countries and the popular perception
that cocoa performance is tied to the country’s general
economic performance. Second, the Ghana Cocoa Board
(COCOBOD) has a policy of retaining a portion of producer
revenues to promote the adoption of yield-enhancing
measures. Third, centralized marketing and maintenance
of the high export quality for which Ghana is known
enables the country to offer stable prices to producers
and oppor tunities for local businesses to participate in the
sector and retain some power in the global value chain.
The authors also explain how Ghana can improve the
efficiency of the cocoa sector by measures that include
increasing transparency and cutting back on services better
provided by the private sector.
TABLE 1 Reduced incidence of poverty among cocoa-producing households (2005 to 2012)
Poverty Extreme poverty Poverty Extreme poverty
2005 20 12 2005 2012 Non-Cocoa Cocoa Non-Cocoa Cocoa
Obs. 780 140 5 780 140 5 4213 140 5 4213 140 5
Mean 33.43*** 26.9 3*** 12. 44 *** 7.2 8 *** 32.28*** 26 .93*** 9. 88*** 7. 2 8 ***
Std. Dev. 3.85 7.9 0 5.9 0 5. 41 5 .51 7.90 1.9 6 5 .41
Source: Author s’ estimate s using Ghana L iving Standa rds Survey Ro unds 5 and 6.
Note: *** signi ficant at p<0. 001; ** sign ificant at p <0.005; * signif icant at p<0. 05; Obs. = number o f observat ions; the samp le size was more t han doubled in t he 2012 survey; hen ce, the
dif ference in numb er of observ ations; in 2012, ext reme pover ty was defin ed as expendi tures that ar e barely adequ ate to meet the c aloric requ irements, a nd they were at 27.1 percent of
the mea n consumptio n. The pover ty line was at 4 4.9 percent of mea n consumptio n.
Ghana had become the largest cocoa producer in the world
by the 1940s. When the country gained independence in 1957,
it had the second highest per capita income in Africa south of
the Sahara. Its relative prosperity was largely due to its foreign
trade in cocoa, as well as timber and gold. However, heavy
taxation, inefficient state marketing combined with inflation,
and overvalued exchange rates that eroded real producer
prices contributed to the sector’s rapid decline.
Cocoa production, which had peaked at 581,000 tons in
1964/65, making Ghana the largest producer globally with
a market share of 38 percent, was down to 160,000 tons by
1983/84, bringing Ghana’s share down to 10 percent. These
distor tions in the cocoa and larger agricultural sector played
an important role in the economy’s deterioration. By the early
1980s, the per capita income in Ghana was half of what it had
been at independence.
Ghana adopted an Economic Reform Program in 1983.
Resisting Washington Consensus–based reforms that called for
abolishing quasi-governmental marketing agencies—known
as parastatals—the country committed instead to increase
the share of export prices going to farmers. The government
increased farmers’ share of export prices primarily by having
a stakeholder group recommend producer prices and
marketing costs and by reducing marketing costs through
the removal of many functions of the cocoa marketing board
(COCOBOD’s predecessor). Among the cocoa marketing
board func tions eliminated were its participation in production
and processing. In addition to increasing farmers’ share
of export prices, the government also adopted policies to
improve and expand cocoa farming.
By 2000, Ghana had increased the producer share in export
prices to above 50 percent and brought production close
to 400,000 tons. Beginning in 2001, as global cocoa prices
rose, the government retained a significant portion of export
revenues, as much as one-fifth in some years, to subsidize
inputs and undertake plant protection spraying to increase
and stabilize production. Production more than doubled in
2002 and grew to more than one million tons in 2010/2011,
restoring Ghana’s status as the second largest cocoa producer
in the world.
Cocoa households have experienced significant improve-
ments in their living conditions compared with food crop
farmers; poverty rates among cocoa households dropped
36 percentage points between the early 1990s and 2005.
Between 2005 and 2012, the incidence of pover ty decreased
more among cocoa-producing households than among
non-cocoa-producing households. There was less than a
percentage point difference in the level of poverty between
the two groups in 2005, but by 2012 cocoa-producing house-
holds were significantly less poor than non-cocoa-producing
households (see Table 1).
Ghana retained its reputation as a producer of
high-quality cocoa, which earns a premium in the global
market. The country is now celebrated as a development
success story, as it has increased produc tion and productivity
while maintaining the quality that gives it a level of power in
the global value chain.
Ghana’s experience has implications for the appropriateness
of economic reform measures that routinely include market
liberalization and abolishing marketing boards. The Cocoa
Coast identifies some general implications of the study’s
findings and some suggestions for making cocoa-sector
management more effective.
Reforms without Market Liberalization
In addition to a stakeholder-advised pricing process that
aims to empower cocoa producers, the reasons Ghana
has increased the producer share of export prices include
the following:
XThe government has become accountable for the sector’s
performance, which is treated as a key dimension of
economic management.
XCocoa-producer pricing has emerged as a key
agricultural policy that reflects the government’s
commitment to agriculture.
XCOCOBOD can raise funds globally for the sector.
To maintain this fundraising ability and Ghana’s status as
a reliable supplier of high-quality cocoa, the government
offers prices that discourage the smuggling of cocoa
into neighboring countries, where prices are more
market determined.
Ghana’s cocoa experience suggests some considerations
that should go into identifying appropriate reform options
for Ghana and other countries with similar economies:
1. Capacity for producer management
Collective producer management of a sector is a commonly
suggested alternative to market liberalization. Ghana
currently lacks an effective organization that can represent
cocoa producers. An intermediate step would be to give
stakeholders a greater say in parastatals’ management,
but this would depend on whether the producers are
adequately organized to have appropriate representation
in the management and, more impor tantly, whether they
develop or are granted a voice over time. Ghana’s cocoa
experience would suggest not.
2. Potential for an indigenous private sector
What kind of markets would emerge following liberalization
and would there be opportunities for domestic firms to
participate in the sector? Countries are often reluctant to
privatize because they are unwilling to permit foreign firms
to dominate critical economic sectors. Ghana’s cocoa sector,
however, has retained practices that offer opportunities
and suppor t for local enterprises to participate in the
sector without discouraging investments by international
firms. Offering opportunities for local participation is also
important politically, to make reforms sustainable.
3. Ability to tame the parastatals
Reforms without market liberalization entail a key role for
quasi-public organizations in a sector’s management. For
this reason, determining whether it would be feasible to
reorganize the parastatals to reduce costs and increase
their efficiency is critical. Political and other pressures
to offer adequate incentives to producers translate into
pressures to reduce marketing costs as well, but that
may not be enough. In Ghana, the producer share of
export prices has been increased largely by forgoing tax
revenues rather than reducing marketing costs. As cocoa
taxes became a less important revenue source, reducing
taxes became easier for Ghana’s government to undertake
than making cocoa-sector parastatals more efficient.
4. Sector-specific government accountability
Ghana’s experience shows that a crucial consideration
when examining sectoral reform approaches is whether
a government will be held accountable for a sector’s
weak performance. Such accountability might occur if
the various actors within the cocoa sector, as well as
international investors in cocoa markets, continue to regard
production levels and producer price share as indicators
of government performance or if the government has
political incentives to seek sector expansion.
Government accountability could develop over time
and may not be apparent when considering reform
options. For example, in the cocoa sector, the use of
licensed buying companies was abandoned in the past
primarily because of the misuse of the funds extended to
them for procuring cocoa from producers. There appears
to be a greater political commitment now to limit the
abuses within parastatals so the government will benefit
from a better performing sector.
5. Is a board appropriate?
Would marketing boards be appropriate for sectors
that currently lack them? Certain services offered by
COCOBOD, particularly pan-seasonal prices, would be
valuable for other export crops. To offer such prices,
however, requires selling in advance of the season
and borrowing at low cost to finance purchases from
producers. This option is not available for many export
crops. Offering pan-seasonal prices without advance
sales may be feasible but would require considerable
political management.
Boards could also play an important role in ensuring
standards and helping sectors build a reputation for quality.
Some exports would benefit considerably from investment
in research and efforts to maintain quality.
Administered pricing, which is what may be demanded
most from a board, is risky. Unless pricing is determined
through a demonstrably objective market price–related
process, prices will be perceived as a government policy.
Governments then will be under pressure to keep increasing
them, at least nominally, even when export prices begin to
fall. While administered price increases are feasible when
export prices are not falling, such a system probably could
not be sustained when export prices are falling.
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The Last Mile of Reforms
Although Ghana’s cocoa sector seems to be performing
well at an aggregate level, productivity is low. Increasing
yields is necessary to maintain cocoa’s competitiveness
with other crops and livelihood options. Doing so requires
better genetic material, more effective inputs, and improved
cultivation practices. The strategy recommended here is
to offer an even higher share of prices to producers and to
increase access to inputs at lower costs.
These goals can be achieved through the following steps:
1. Making cocoa pricing even more transparent, particularly to
strengthen the process of determining the size and scope
of industry activities. This could lead to streamlining and
modernizing COCOBOD’s and other marketing organizations’
operations to reduce their costs and limit their operations’
(currently excessive and therefore inefficient) scope.
2. Engaging the private sector in marketing wherever
feasible to reduce costs and improve effectiveness.
Transparency could result in bet ter use or allocation of sector
resources, and the use of the private sector would make many
activities more ef ficient. Some opportunities to increase
transparency and private-sector involvement in the cocoa
sector are reviewed below.
Beginning in 1984, the Ghanaian government set producer
prices and established set fees that the actors in the sector
can charge for their services. This price and fee setting
followed the recommendations of the Producer Price Review
Committee (PPRC). The PPRC comprised representatives of
major actors in the sector including producers, transporters,
the Ministry of Finance and Economic Planning (MoFEP),
COCOBOD, and others. However, how much influence this
committee has on pricing is not clear.
While producer prices and costs of other services are
announced at the beginning of the season, the rationale for
and details of the budget for carrying out industr y activities
are not published—even though this budget affects the size
and scope of industry activities. Publicizing a summary of the
PPRC recommendations would make the committee members
more accountable to the public. The committee members, in
turn, would demand more extensive committee deliberations
and a say in determining prices and budgets. Whenever actual
revenues exceed projections, the PPRC should also deliberate
on how surplus revenue should be used—whether these
revenues should be passed on to producers as bonuses, put
into the price stabilization fund, or spent on industr y activities.
Transparency is required in other spheres of Ghana’s
cocoa sec tor, as well. The only information available about the
operations of COCOBOD’s marketing unit, which is one of the
largest sellers of cocoa beans, is the prices provided in the
annual repor ts. Understanding how to make the cocoa marketing
unit’s operations transparent, without compromising the unit’s
operations, would help in introducing appropriate reforms.
Using the Private Sector
Ghana’s marketing organizations could reduce costs if the
private sector took over certain functions. Even if private-sector
organizations do not reduce costs, they can at least be held
accountable to deliver services more effectively. Two options
to consider are (1) cocoa producers raising and supplying
seedlings, as a complementary enterprise; and (2) private
agencies competing to certify cocoa without delay, thereby
streamlining cocoa quality-control procedures.
Reforming the cocoa sector has spurred production
increases and improved marketing to offer a higher price
share to producers. However, while centralized marketing
enables COCOBOD to reliably deliver large quantities of
uniform-quality Ghanaian cocoa and thus earn a premium that
exceeds quality-control costs, some of the ser vices provided by
COCOBOD are wasteful, functioning as a tax on producers that
does not benefit them universally. If the private sector emerged
to provide those services, farmers might be able to earn the
revenues COCOBOD saves by eliminating those services.
Ghanaian cocoa seems to be dependent on many
conditions that may not be applicable in other sectors and
countries. Nevertheless, Ghana’s case is interesting as an
alternative to full market liberalization; despite the general
acceptance of liberalization across the African continent,
some sectors in Ghana and other countries still could benefit
from marketing board arrangements.
Shashi Kolavalli ( is a senior research fellow in the Development St rategy and Governance Division of the International Food Policy Research
Institute, Accra, Ghana. Marcella Vigneri ( is an independent researcher based in Oxford, United Kingdom. This publication is based
on the peer-reviewed book The Cocoa Coast: The Board-Managed Cocoa Sector in Ghana, published by t he International Food Policy Research Institute. Any
opinions stated in this book are those of the author(s) and are not necessarily representative of or endorsed by IFPRI. For more information about the book,
... It is important to keep these benefits in mind when comparing the farmgate prices of Côte d'Ivoire and Ghana to those of other countries, which do not provide such benefits to their farmers, or to the international market price. However, the extent of these benefits differs strongly across farms, as Bymolt et al. (2018) and Kolavalli and Vigneri (2017) find based on different data sets. ...
... As described by Kolavalli and Vigneri (2017), the price determination process begins once 60 to 70% of the predicted main harvest of next year has been forward sold. First, the expected cocoa revenue is calculated from predictions for the year of the gross Free-on-Board (FOB) export price in USD, the Ghana cedi (GHS) to USD exchange rate, and the harvest. ...
... This relationship is correct if the revenue from the levy continues to be shared in identical proportions among the cocoa value chain stakeholders between the farmgate and the point of export. At least for Ghana, this assumption might not be far from reality: Kolavalli and Vigneri (2017) describe that the price determination process is governed by the expectation that the levy revenue will be shared among the stakeholders. ...
Full-text available
Despite the high value of the global chocolate market and the high profitability of the few multinational companies dominating it, the farmers growing cocoa beans remain poor. To change this, the two biggest cocoa producers, Côte d’Ivoire and Ghana, have jointly introduced the cocoa Living Income Differential (LID) policy. Charging higher prices for beans, the policy might help mitigate both poverty and the serious child labour and deforestation issues associated with cocoa farming, for which poverty is regarded as a root cause. Nevertheless, the design of the policy and the current lack of complementary measures raise doubts about the success and longevity of the policy and concerns about the implications for farmers in other countries. Accounting for the repercussions with international cocoa markets, this study quantifies the magnitude of the policy’s effects in the LID countries and elsewhere under several alternative configurations of policies and market reactions with the support of model simulations and finds increases in farmer income ranging from zero to sizeable. Discussing the policy’s potential impacts in the past and present context of the cocoa industry, it identifies a number of issues threatening its sustainability. Moreover, it underlines the strong dependence of the policy’s success on chocolate manufacturers’ support unless complemented by supply management measures. Such measures could limit the aggravation of, or even improve, the income situation for farmers elsewhere and the child labour and deforestation issues. [Download the article freely at]
... Studies that have assessed recent price stabilisation measures in SSA agricultural export sectors have tended to focus on the producer country level, analysing national market structures, but not how they play out in GVC governance structures (for cocoa in Ghana, see, e.g. Kolavalli and Vigneri 2017;Quarmine et al. 2014). This is problematic because these studies at least implicitly tend to perceive producer country institutions as 'producer price setters', masking the transnational dimension of how prices are set. ...
... Furthermore, the internal marketing system was deregulated partially in 1993 by introducing Licensed Buying Companies (LBCs) to procure cocoa beans from producers. This established an institutional mix: the public Produce Buying Company (PBC), which is the leading buyer, with a share of 30%, and around 30 private LBCs, including grinder-trader-owned LBCs, including the top four (Olam, ECOM, Cargill and Barry Callebaut), as well as Touton (Kolavalli and Vigneri 2017). However, the Cocoa Marketing Company (CMC), a subsidiary of COCO-BOD, operates as a monopsony in the purchase of cocoa beans from LBCs and as a monopoly in the exportation of beans. ...
... In the forward-selling process, CMC negotiates premiums with international buyers relative to underlying London cocoa futures prices. The forward sales largely determine the export price ahead of the harvest season and serve as collateral for an annual syndicated offshore loan, which provides working capital for LBCs to purchase cocoa beans and cheap access to foreign exchange for the government (Kolavalli and Vigneri 2017;van Huellen and Abubakar 2021). The remaining 30% is sold through spot contracts later in the season, exposing COCOBOD to the risk of price drops during the season. ...
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This paper calls for integrating price-setting power and related uneven exposure to price risks into the analysis of governance in global value chains (GVCs) as it adds to other power dimensions in producing unequal distributional outcomes. This is shown for the cocoa GVC, in which-unlike in today's mostly liberalised market structures-the world's top cocoa-producing countries, Côte d'Ivoire and Ghana, pursue price stabilisation measures. These measures address intra-seasonal producer price volatility, and recent collaboration has achieved a living-income differential on top of export prices, but such measures do not shield export and producer prices from inter-seasonal variations in world prices determined on commodity derivatives markets. Based on interviews with actors along the cocoa GVC, we argue that this is related to the price-setting power of 'grinder-traders' and the key role of financial hedging and trading on commodity derivatives markets in their business strategies. Financialisation processes have increased derivatives trading's complexity and short-termism, accelerating consolidation among grinder-traders and making price stabilisation more challenging. Through their price stabilisation systems, Côte d'Ivoire and Ghana have maintained some price-setting power in the cocoa GVC, but largely remain 'global price-takers', with prices determined on derivatives markets and transmitted along the cocoa GVC through grinder-traders. Supplementary information: The online version contains supplementary material available at 10.1057/s41287-022-00543-z.
... Ghana's cocoa producing regions have significant differences in output. After cocoa was gradually introduced and adopted by smallholder farmers in Ghana in the nineteenth century, production has been influenced by the availability of forestlands for farm expansion, pest and disease outbreaks, climate variability and change, access to new and improved planting materials, the availability of labor (Kolavalli & Vigneri, 2011) and colonial and post-colonial government policy (Kolavalli & Vigneri, 2017). These factors have contributed to fluctuations in national output and to the geographic spread of cultivation from the Eastern Region to Ashanti, Brong-Ahafo, Central, Volta, and Western regions (see Fig. 3.1). ...
... In the first phase, the annual rate of expansion was high and occurred on primary forestlands in the Western Region between 1990 and 1999 . Nevertheless, farmers' output per hectare kept declining and significant yield increases only occurred in the second phase when the country intensified the fight against capsid/mirid and black pod disease through the 2001 Cocoa Mass Spraying Programme (Naminse 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018 Area harvested ( (Kolavalli & Vigneri, 2017). These programs aimed at shifting cocoa cultivation from extensive low inputs to intensive cultivation using modern cultivation practices and scientific techniques. ...
Cocoa cultivation is both severely threatened by climate change and a potential contributor to climate change through deforestation. Based on a review of the literature and secondary documents, as well as field observations and interviews, this chapter examines different innovations in Ghana’s cocoa sector, the ways in which they aim to address sustainable cocoa cultivation, and the challenges to their adoption. We find that cocoa farmers are generally open to innovation and new technology. Yet, while farmers respond positively to certain innovations, they do not fully adopt others. This uneven adoption, we argue, is not just a result of limited resources or poor extension services but stems from a failure to address the multiple challenges farmers face when introducing new innovations, including insecure land-use rights, youth disinterest, migration, and seemingly lucrative alternative land use. While promising innovations, such as agroforestry and smartphone applications for agricultural service delivery and training, are currently being implemented, such innovations, we conclude, will only lead to sustainable cocoa cultivation if these broader challenges are addressed, thereby moving beyond a narrower concern with yields and climate change mitigation and adaptation.
... Except when cocoa is smuggled, cocoa beans trade in contemporary Ghana is conducted by the Cocoa Marketing Company (CMC) (Section Since 1993, market liberalisation reforms in Ghana allow Licensed Buying Companies (LBCs) to buy cocoa beans directly from cocoa farmers before selling them to the CMC at a predetermined margin (Kolavalli & Vigneri, 2017). LBCs do not determine the farmgate prices for cocoa. ...
... For the 2020/2021 season, GHS 10,560 (USD 1,837) per tonne, a 28% rise from GHS 8000 (USD 1523) per tonne from the previous season. From about six LBCs in 1993, there were 27 LBCs by 2017, with 11 accounting for about 96.4% of cocoa delivered to Ghana's ports (Kolavalli & Vigneri, 2017). In the bid to attract farmers, LBCs provide several incentive packages such as inputs and credit to cocoa farmers (Ansah et al., 2017;Bannor et al., 2019). ...
Scientists and policymakers are waking to the menacing impacts of deforestation on biodiversity and the livelihoods of the over one billion people reliant on forests. Concurrently, an upward trend in population and its corresponding rise in the global demand for feed, food, fuel, and fibre exerts new demands on limited land resources available to multiple stakeholders. As the competition over land intensifies, many farmers in the tropics employ several strategies to cultivate areas designated as forest reserves for their livelihoods, leading to further deforestation and conflicts with state forestry agencies. Moreover, despite decades of investments in institutions to directly fund smallholder farmers’ participation in rehabilitating deforested landscapes, little is known about the reach and performance of existing financial incentive mechanisms. This dissertation adds to filling these knowledge gaps based on qualitative case studies embedded in multiple analytical and data collection approaches in Ghana, which loses near 2% (135,000 ha) of its forests annually despite several efforts to overcome the challenge. Following a brief introduction and clarification of conceptual underpinning in Chapter 1, the knowledge gaps are addressed with three empirical publications (chapters 2-4). Chapter two examines why and how farmers in forest communities gain and secure access to their farmlands within forest reserves to produce food and cash crops against state law. Through process-net maps, focus group discussions, interviews, and field observation, data were gathered through an extended field stay in Ghana’s Juabeso district. The findings unbridle the multiple structural and relational mechanisms farmers apply to evade state attempts to rein in illegal farming in the area and how institutional deficiencies, notably corruption and elite capture of farming benefits by native chiefs, reinforce farming in forest reserves. The chapter discusses the broader implications of the findings for the Ghanaian government’s attempts to accelerate forest landscape rehabilitation, noting that such efforts will need to adapt to the multiple struggles and latent actor interests to succeed. Chapter three disentangles the narratives and experiences of forest communities and compares them with the current assumptions underlying forest policy in Ghana from the perspective of the most dominant forest policy actors. The results contend with current assumptions that portray forest communities as environmentally destructive. Alternatively, it reveals that while several factors combine to drive forest-dependent communities to cultivate forest reserves, the challenge of food insecurity is paramount but unconveyed to the forest policy arena. The chapter proposes a novel concept of food security corridors (FSCs) as a meta-narrative for harmonising competing actor interests in forest reserves. The chapter also discusses the feasibility of FSCs and calls for further efforts to refine and pilot the concept in the global search for solutions to forest and agriculture land-use conflicts in the tropics. Chapter four examines the governance of Ghana’s Forest Plantation Development Fund as an incentive system instituted to attract smallholders into landscape rehabilitation based on interviews with tree growers, forestry officials and NGO staff. The study revealed that the legal provisions instituted to ensure the fund’s transparent operation were not implemented by fund administrators. Many stakeholders were clueless about the Fund and could neither access nor demand accountability in its administration. The chapter clarifies the information needs of various fund stakeholders, such as eligibility criteria, funding cycles, annual inflows and outflows, and a list of beneficiaries. It also discusses the implications of the findings, including mechanisms required to trigger the transparent running of the fund by its administrators. The thesis reveals new patterns of perennial land competition between state and traditional institutions. It demonstrates how prevailing institutional challenges reinforce this competition and enable unsustainable land use to flourish. At the same, it points to lapses in governance, including state failure to evolve its forest policies to meet changing demands and needs among contemporary actors and how the same challenges curtail access and ability to support forestation rehabilitation efforts in Ghana. Overall, the thesis notes that while tackling farming in forest reserves can be challenging due to its multiple drivers and the competing actor interests, FSCs have the potential to serve as an entry point that enables government and other actors to resolve their differences and find lasting solutions that enable local communities to achieve their livelihoods needs while contributing to sustainable land use. However, for this potential to be realised, actors need to invest in refining and piloting FSCs in specific localities.
... To evaluate the significance of the economy-wide impacts of the dam 1 Cocoa exports are a government monopoly through the Ghana Cocoa Board, the COCOBOD. Exports are thus not liberalized as COCOBOD buys from the farmers prices established prior to the harvesting season and then sells on the world market (Kolavalli and Vigneri, 2018). The assumption in the paper is that COCOBOD will buy the additional export requirements and will bear the costs of differences between market prices and changes to farmgate prices due to the new demand. ...
Full-text available
Large energy infrastructure can imply special financing arrangements between governments in developing economies and investors or lenders. These arrangements can lead to economy-wide and sector-specific impacts which need to be considered in the project economic evaluation. By considering the case of the Bui Dam in Ghana, we use a macroeconomic approach to determine how the economic performance of critical energy infrastructure manifests during the construction, financing and operation phases. The analysis uses an integrated modelling framework that combines a Computable General Equilibrium (CGE) model of Ghana with a water balance model of the Lower Volta River Basin. The results highlight the importance of including indirect and induced effects, in addition to the direct effects from project operation, as they influence the scale and temporal evolution of the economic impacts. The collateral from the infrastructure loan agreement consisting in cocoa exports to China nearly doubles the project's positive GDP impact and has a significant multiplier effect over urban and rural household income compared to a standard commercial loan. We finish with a discussion of how the proposed investment-oriented modelling framework can contribute to ex-ante strategic assessments of proposed energy infrastructure in developing countries.
... Cocobod fixes a unique minimum farm gate price for farmers, which is 70 percent of the Free On Board (FOB) cocoa price (Victor et al., 2010), although some claim that in practice the FOB price does not exceed 60 percent (Kolavalli and Vigneri, 2017). In October 2020, Cocobod increased the guaranteed cocoa farm gate price for the 2020/2021 season by 28 percent to $1,837 per tonne as a result of the Living Income Differential (LID), a regional additional premium on cocoa to progress cocoa farmers to a liveable income (Fountain and Hütz-Adams, 2020). ...
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Executive summary This research was commissioned by the Fairtrade Foundation with support from Open Society Foundations to gain a deeper understanding of the mechanisms that either enable or prevent cooperatives creating value for their membership base and communities in the Ghanaian cocoa sector. The research drew on desk research and primary data collection, which included an analysis of two existing Fairtrade cocoa co-operatives' development trajectories, in order to provide a framework for understanding factors that allow or prevent cooperatives from creating value and distributing that value among their members. This framework was used to create a theory of change for cooperative value creation and a road map with recommendations going forward on ways for external actors to support Ghana's cocoa cooperatives. The study explored the internal and external factors that drive value creation by cooperatives. Membership cohesion, strong leadership, efficient operating procedures, and effective governance mechanisms are all key internal factors identified as impacting on cooperative value creation. External enablers (or underminers) include socioeconomic cohesion in cooperative communities and fertile (or unfavourable) value chain, institutional and broader socioeconomic environments. These factors form the conceptual basis applied to investigate the two case study cooperatives within the context of historical and present day cocoa production, markets and the cooperative movement in Ghana. The findings show that the cooperatives studied create value by offering fair and prompt payments, certification premium, and provision of extension services and inputs. Training activities are highly appreciated by farmers, particularly those related to productivity increases. However, differences in skills, resources, and power among members undermine training effectiveness and create inequalities in participation and representation within the cooperatives. Finally, difficulties in engaging with sharecroppers (who as non-members of cooperatives are likely to miss out on training and incentives) undermine efforts to increase productivity, eliminate child labour and produce cocoa sustainably. Internally, strong leadership and sustained investments in human capital are crucial for cooperative value creation, while solid governance structures are necessary for the value to be fairly distributed across members. In terms of membership size, a smaller size can be beneficial in terms of organisational efficiency and premium effectiveness, but it can undermine the commercial ability of a cooperative to source sufficient cocoa volumes to establish itself competitively in the market. Externally, proactive institutional and commercial partners are key enablers of cooperative emergence and growth and can play a key role in ensuring transparency and functionality, while also supporting cooperatives to overcome operational and governance challenges. The underlying risk is cooperatives prioritising the agenda of their partners over their own interests. Overall, findings suggest that there is currently a strong demand for cocoa cooperatives in Ghana, both by farmers who long for accessible agricultural services, and by institutional and value chain actors seeking optimal ways to reach and engage with farmers. Following feedback from the participating cooperatives , it is recommended to focus future support on the inclusion of sharecroppers in training activities and incentives; create value chain sector guidelines for coordinated and diversified partner support; facilitate cooperative networks and platforms; invest in specialised support structures for cooperatives ; invest in leadership skills among young people in cocoa farming communities; and prioritise governance strengthening over operational investments.
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The millions of farm workers in the Global South are an important resource for smallholder producers. However, research on their labour organisation is limited. This article focuses on smallholder farm workers in Ghana’s cocoa sector, drawing on insights from qualitative interviews and the concept of bargaining power. We review the labour relations and working conditions of two historical and informally identified labour supply setups (LSSs) in Ghana’s cocoa sector, namely, hired labour and Abusa, a form of landowner–caretaker relations, and identify an imbalance of horizontal power. Further, we analyse the labour relations and working conditions of an emerging and formal LSS in Ghana’s cocoa sector: private labour providers (PLPs). We argue that PLPs are likely to address the imbalance of horizontal power between farm workers and smallholders and bring about significant improvements in the working conditions of farm workers. We also assess the sustainability potential and limitations of PLPs and argue that tensions exist. We contribute to the growing horizontal power perspective by providing avenues for research and policy related to promoting sustained labour rights for farm workers in smallholder agriculture in the Global South.
Decades of research and training activities have not reduced crop disease or pest losses, increased average yields, or alleviated poverty among smallholder cocoa farmers. Failure has been variously attributed to farmer ignorance or indifference, sociocultural barriers, inappropriate technologies, risk aversion, or uncertain financial incentives. However, attributing a single cause overlooks the complexity resulting from unique intersections of challenges facing smallholder cocoa farming families in different regions. We investigated smallholder farmer productivity from a transdisciplinary One-Health perspective and found that among cocoa farming families in the Autonomous Region of Bougainville (Papua New Guinea; PNG) the most significant barriers to increased productivity and higher incomes were low levels of education, financial insecurity, and poor family health. These factors interact to reduce the availability of productive labour needed to implement knowledge and technologies from extension and training programs, and it is labour availability rather than agronomic knowledge that limits the effectiveness of farmer training. If the goal is to increase productivity and thus livelihoods of smallholder cocoa farmers, One Health approaches that engage with communities to include relevant education, health, and income diversification packages are likely to be more successful than conventional agronomically-based farmer training. Healthy crops depend on healthy, educated farming families. One Health Impact Statement Conventional disciplinary-based assistance programs assume that it is technical knowledge that limits food production, incomes, and living standards in rural, low-income communities. This approach overlooks how the intersection of knowledge with incentives and human capacity constrains technology adoption. Significant global investments in disciplinary-based programs have not improved smallholder cocoa yields, incomes, or family health. Our team collected data on demography, farming activities, incomes, health, and nutrition from families in 33 cocoa-growing villages in Bougainville. Results were presented back to the communities, Government and scientific community and their perspectives incorporated. Our transdisciplinary interpretation revealed that among the diverse factors examined, education levels, income diversification, and family health have the strongest impacts on poverty. This deeper understanding of the intersecting factors in poverty informs the prioritisation and development of more effective, One Health approaches to poverty alleviation.
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Several methods are used to evaluate competitiveness, but the non-inclusion of quality measures, despite their importance in international product markets, gives less credence to such assessments. This study evaluates export competitiveness in the cocoa sector from the context of pesticide regulations. Such regulations are now increasingly common, due to their perceived benefits for humans, animals, and the environment. The results of our study show that cocoa-exporting countries stand to derive more earnings if standards are harmonized at the Codex level. Adherence to international standards, as reflected in large standard-scaled trade values, enhances competitiveness: yet compliance capacity must be matched with a sustainable increase in output for higher competitiveness. In addition to stepping up advocacy for the adoption of the Codex standard or its variants, cocoa-exporting countries need to diversify into different markets to balance quality and quantity requirements for improved earnings.
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