Blogs

By Deborah Foy, Agricompas

Over the past few months, the team at Agricompas has been working closely with FEDECACAO in Colombia to conduct value chain analysis for cocoa. This blog introduces the concept of value chain analysis and highlights how value chains can be used to make cocoa farming more sustainable.

What is Value Chain Analysis?

At its heart, value chain analysis describes the pathway of cocoa from bean to bar. It extends all the way from pre-farm input providers right through to end consumers, linking different actors in the chain along the way and highlighting where there are both threats and opportunities.

Typically, the main segments of a value chain are summarised in a value chain map. This map becomes a graphical representation of the value chain that showcases the functions of stakeholders, their relationships and the agents supporting the process. A simplified value chain map for cocoa is shown below:

The Main Stages of a Cocoa Value Chain

A typical cocoa bean value chain involves the operation of four major segments – Primary Production, Commercialisation, Processing and Manufacturing, and Market.

1. Primary Production

Farmers are at the primary production stage of cocoa-based supply chains. In Colombia, this group encompasses over 52,000 cocoa smallholders. Whilst the area planted by the farmers varies between regions, a typical cocoa farm in Colombia is grown on an average plot size of less than three hectares. Farmers in the primary production stage can be classified in many ways, including:

• Farm management practices (e.g. diversification of production)
• Percentage of shade cover
• Whether they are certified
• Whether their production methods are traditional or there is a high degree of technification

2. Commercialisation

Commercialisation can include individual purchasers, producer associations such as our local partner, the Federación Nacional de Cacaoteros (FEDECACAO), and the purchasing agents of large firms. This stage typically includes transportation, quality control, fermenting and drying, as well as differentiation (e.g. certification of producers that have met criteria of an independent evaluating entity).  Some agents active in the commercialisation of cocoa – including our partner FEDECACAO – are involved in technical assistance and in the distribution of farming inputs such as fertiliser.

3. Processing and Manufacturing

In this stage, cocoa moves from commercialisation to firms involved in the transformation of cocoa and in the production of cocoa-based products (e.g. chocolate bars and cosmetics). In Colombia, two large domestic companies – Casa Luker and Nutresa – dominate the processing and manufacturing of cocoa. Together, they purchase between 80-90% of Colombia’s cacao production. Most central cocoa traders in Colombia have commercial relationships with one or other of these two major chocolate companies.

4. Markets

In this last stage, the processed cocoa is sold for internal (domestic) consumption or sent to export destinations. Colombia is unusual in that 81% of the final product is sold domestically, largely for drinking chocolate preparations (FEDECACAO 2019). However, exports of Colombia cocoa have been increasing since 2012. The country currently exports fermented and dried cocoa beans, shells and cacao residues, cacao paste, cacao butter, cacao fat or cacao oil, cacao powder without the addition of sugar and other food preparations containing cacao to around 72 countries.

How is Value Chain Analysis Useful for Sustainable Agriculture?

Value chain mapping has many uses. Key among them are the following:

• Identifying points of economic inefficiency: This includes economic analysis of points in the chain where resources are not being used in an optimal way.
• Identifying the value added at each step of the chain: In cocoa, value added at each step of the value chain is typically unequally distributed – meaning that benefits from price increases tend to benefit the agroindustry more than smallholder farmers.
• Identifying smallholder farmers who adopt practices that lead to sustainable agricultural outcomes: This can improve productivity through the creation of price premiums and incentive structures. The value chain can also help large firms to promote climate smart agriculture at primary production stage (e.g. through the reduction of greenhouse gas emissions).
• Identifying how value chain links can be improved: Better value chain links (e.g. between producer associations and buyers) can also improve farmer access to extension services, information about prices and certification, as well as inputs for climate adaptation and resiliency.

In Colombia, there are multiple forces that shape the supply and demand of cocoa. At Agricompas, we’re using value chain analysis tools to map out the roles and responsibilities of different actors involved in the sector. We’re using these tools to gain insight into the net income derived by farmers and other stakeholders from cocoa production and trade. Ultimately, understanding how the value chain works will help us to identify ways to make it more sustainable.

By Deborah Foy, Agricompas

Today is International Women’s Day. It’s also the end of the Fairtrade Fortnight campaign, “She Deserves”. Over the past two weeks, some powerful stories have been shared of the farmers behind our chocolate bars, farmers who are often exploited and underpaid. Farmers like Edith, a cocoa producer in Côte d’Ivoire who is passionate about helping other farmers in her community to build better lives for themselves and their families.

https://www.fairtrade.org.uk/get%20involved//Current-campaigns/Fairtrade-Fortnight/Meet-the-Fairtrade-Farmers

Around the world, women’s labour is a crucial part of the cocoa value chain. However, this contribution is often unrecognised. Fairtrade’s recent report, “The Invisible Women Behind Our Chocolate”, highlights that women carry out 68% of the labour in cocoa farming, but earn only around 21% of the income.

At Agricompas, we are keen to increase the participation and visibility of women in the cocoa value chain. We agree with Fairtrade that unlocking the power of women will be key to accelerating the rate of progress for communities.

In Colombia, working in partnership with Fedecacao and Solidaridad, we conducted research last year in two cocoa-growing communities in Santander and Valle de Cauca. We wanted to understand the gender divisions of labour in cocoa – in particular, producers’ roles and responsibilities within cocoa production, as well as the gender dynamics of household responsibilities and domestic tasks. Our research was funded by the UK’s Prosperity Fund for Colombia, which recognises that gender equality and women’s economic empowerment are key drivers of inclusive growth.

It was no surprise to learn that women play an important role in cocoa production in both communities. They are particularly involved in early crop care and in maintenance activities such as weeding and pruning, which are critical to enhancing future crop yields and final production of quality beans. Women also play an important role in post-harvest activities.

In Valle de Cauca, for example, women are largely responsible for the process of selecting and packaging the beans for sale. In Santander, less than 5% of the male cocoa farmers we interviewed are involved in post-harvest activities; the job of shelling cocoa cobs, fermentation and bean drying largely falls to women. These tasks are also critical for quality, since beans must be dried slowly to lose humidity and acidity, taking care to prevent internal or external fungus from ruining the beans.

Cultural norms in Colombia also act as barriers for women in cocoa-growing communities. Alongside their participation in cocoa production, women are engaged in household duties and care work that enables other labourers to be productive. In Santander, unpaid domestic household activities are much more likely to be performed by women. In Valle de Cauca, the female farmers that participated in our study were entirely responsible for cooking and cleaning, as well as doing laundry, ironing clothes and caring for grandchildren. These cultural norms are limiting women’s access to economic opportunities. For example, 80% of the women we interviewed stated that taking care of dependents is a barrier to their participation in cocoa crop activities.

The theme of this year’s International Women’s Day is, “An equal world is an enabled world.” Our research in Colombia has shown us that women are at the heart of cocoa production. We must now work with our partners and others in the value chain to make sure that women are visible and that their contribution is recognised.

By Deborah Foy, Agricompas

Chocolate is a magical food. In Colombia, according to Gabriel Garcia Marquez, priests “levitate by means of chocolate”. Chocolate boosts our endorphins, which makes us feel good, and is packed with antioxidants. It has also long been considered an aphrodisiac and a symbol of affection, attraction and deep love. It’s perhaps no surprise therefore that chocolate is one of the most popular gifts for Valentine’s Day.

But we may be facing a future without chocolate. Climate change and environmental pressures are already creating tensions along the global cacao supply chain. It’s thought that nearly 90% of areas that currently grow cocoa will be less suitable to do so by 2050. Cacao trees love high temperatures and they need plenty of rain, which is why they thrive close to the equator in countries such as the Côte d’Ivoire and Ghana. Over the next several decades, these countries may grow warmer, drier, and less suitable to cacao cultivation.

In Colombia, cacao is a native crop and one that has played a key part in the country’s history and culture. The crop also has a vital role in Colombia’s post-conflict development, creating jobs in remote areas that for decades were beset by conflict. Today, cacao is grown by an estimated 100,000 smallholders across the country, typically on plots of 5 hectares or less.

Agricompas is working with partners in Colombia to find ways to help these cacao growers adapt to changing climatic conditions and to develop more sustainable practices. Whilst our goal is to enable the entire value chain to grow in a sustainable fashion, we know that the cocoa growing communities themselves that are a core part of the solution. Sustainable cocoa supply begins with empowered cocoa growers. That’s why we’re focusing on the prosperity of farmers. We want to help them to improve productivity and yields today, as well as plan for the changing conditions of the future.

Building the resilience of cacao is important not only to keep chocolate on the supermarket shelves for Valentine’s Day, but to maintain the livelihoods of smallholder farmers.