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How can Value Chain Analysis be used to make cocoa farming more sustainable?

20-Sep-2020 by agricompas

A smallholder farmer in Colombia cut opens a cocoa pod with a machete. Each pod contains around 20 to 30 seeds. (photo credit, FEDECACAO)

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.

Colombian exports of cocoa beans 2008-2018 in metric tons (FEDECACAO, 2019)

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.

Gantt for Good

18-Jun-2020 by sam adams

Sam Adams, Agricompas Head of Programmes

Gantt charts show tasks in a chronological order

At EcoProMIS, we are well aware that our project is both exciting as well as full of demands, requiring careful planning and communication. In my last blog article I explored how we are managing the complexities of a five-year international agri-tech project.

I mentioned in that previous article that to help manage complexity, we have implementing a new cloud-based project management system. Today I share a bit more about that process and how we have introduced ‘Gantt’ to clarify roles and responsibilities, manage expectations, and design a robust and logical workflow.

Cloud to the Rescue
The EcoProMIS team is spread over seven organisations, based in multiple sites in both the UK and Colombia. There is a six hour time difference. Because of these logistical realities, we have chosen to work with cloud-based digital communication and project management.

So, like most of us during this time of global working-from-home, we have been extensively using digital communication tools. How grateful we are that these tools are widely available! It would have been a very different picture just a few years ago.

In practice, this means that for daily communication we use a mobile chat app, the usual email correspondence, and we are slowly getting used to Microsoft Teams (having previously used Slack for years, this is a bit of an adjustment).

Gi-GANTT-ic Support
In addition to these daily conversations and regular team meetings, there is still the need for an advanced system of project management. For a project of our size, this is a gi-GANTT-ic need. So over the past weeks and months, I have been setting up a Gantt chart system for our EcoProMIS project management.

For those who are unfamiliar, a Gantt chart is a way of seeing a project’s lifespan in a single image. It shows all of the tasks in chronological order. Further details can be added, such as who is responsible for each task, and which tasks are dependent on others.

Most projects have a timescale of 3-6 weeks. EcoProMIS however, is a five year initiative, so the scale and detail required in our Gantt is significant. I have certainly enjoyed the challenge of creating it.

Open Source Trial
In order to choose the most appropriate and affordable Gantt software, I tested six different products. Most have the same features and similar pricing, so it was difficult to navigate the options.

Initially I settled on Open Project, an open-source product that can be self-hosted. Having access to our own servers and our own world-class IT team meant this seemed like an easy option, and the open-source values resonate with our vision to make positive change in the world.

Unfortunately, the maintenance for this self-hosted option was excessive and beyond the availability that our team had. I made the reluctant decision to start again and transfer to a paid system hosted in the cloud.

Remote working during the COVID-19 pandemic means new challenges and opportunities.

TeamGantt
Leaving Open Project behind, I settled on a dedicated and affordable product called TeamGantt. It is a responsive and clean-looking Gantt chart, with all the features that we required. In early June I rebuilt the entire project plan from scratch on this new system. This was frustrating but ultimately served to refine the end result, which is now working well.

The EcoProMIS Gantt structure is based on quarterly tasks and milestones. This is because each quarter we deliver tangible outputs and report on these to our funder, the UKSA.

A Dynamic Map
It is an important point to state that the Gantt chart is not a static document that once created is filed away somewhere. Part of the purpose of the chart is that it is alive, a tool or dare I say ‘friend’ of the project. It is used as a dynamic and responsive communication and management resource.

In practice, this looks like using the Gantt chart in a screen-share during our meetings, to communicate expectations around each others’ roles, and to plan timelines and scheduling.

A Gantt chart is also a reference point for everyone in the project to use. At any stage and any time zone, our team can login in to the website and see their own tasks, their colleagues’ tasks, and how the entire five year project fits together.

Likewise, it can serve new arrivals to our team. For example, recently I met with Rodrigo Gil, our new Crop Modeller, to look at the Gantt and show where the project has come from over the past three years. This forms an essential part of new colleague induction.

Effective Project Delivery and Culture Change
All of this work and technicality is ultimately to aid the smooth delivery of a complex multi-faceted project. Our new cloud-based Gantt chart is a great asset to the team, and I believe will improve our ability to reach the demanding goals and cutting-edge targets of EcoProMIS.

The colourful and clean digital interface is appealing and immediately gets attention. The details of the task interdependencies and scheduling of roles and timeframes, means that all partners are better equipped and more accountable in their work.

I also note that by introducing an effective Gantt chart, it can bring an organisational culture-change. Using an accessible Gantt chart contributes to a change in mindset from loose project delivery and inefficiency; to a much tighter project, with greater cost and time efficiencies and hopefully a happier, more connected workforce, better able to deliver our mission to support the Colombian rice and oil palm growers.

“Las cuentas, claras, y el chocolate, espeso”

10-May-2020 by agricompas

By Annie Zamora, Principal Researcher, FEDECACAO

Anyone who has travelled to Colombia may have come across this local saying, which roughly translates as “I like my stories clear and my chocolate, thick.” It highlights the Colombian people’s preference for clarity and blunt talking. The saying also hints at our country’s passion for chocolate – we consume 50,000 tonnes of cacao annually, which is around a kilo per person.

But unlike Europeans, mostly we drink it rather than eat it. Drinking chocolate has a long tradition across the country. We typically start the day with a cup of hot chocolate for breakfast. In the afternoon, we have a tradition called “tomar las onces” (elevenses) which involves drinking chocolate with a snack like an arepa or an almojabana. If you come to the main office of FEDECACAO here in Bogotá in the morning, you can enjoy a delicious hot chocolate with bread.

A typical morning in FEDECACAO

At FEDECACAO, the Federación Nacional de Cacaoteros, we’re passionate about cacao, but even more passionate our improving the lives of cacao smallholder farmers.

Growing cacao in tropical environments can be difficult. Our farmers must constantly be on the lookout for pests and disease, they must fertilise the soil around the trees and – given most cacao grows near the equator – they must shield their cacao crops from the burning sun. Producing cacao pods also takes time; a cacao tree normally doesn’t reach maturity until it’s at least 3 or 4 years old. Our cacao farmers also live in remote areas with many social issues – many of them been badly affected by the decades-long armed conflict here in Colombia.

Despite these challenges, FEDECACAO has continued to provide support to cacao growers over the country. Since 2013, we have seen production increasing, and the lives of our smallholders have begun to improve. But there’s still much more work to be done.

That’s why FEDECACAO is excited to be part of the “Digitising of cacao production” project, together with our partner organisations in Colombia and the UK. Helping our farmers get the resources, knowledge and skills they need to ensure the highest yields will hopefully start to transform the sector and ensure a sustainable supply of cocoa for chocolate lovers, both in Colombia and around the world.

Recognising Women’s Work in Cocoa Production

7-Mar-2020 by agricompas

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.

Monica Cortes from the UK Embassy in Colombia helps to faciliate a Gender and Inclusion workshop in Tuluá, Valle de Cauca

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.

Producers in Santander participating in one of the project’s Gender and Inclusion workshops

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.

Experts from the Reading Cocoa Group share knowledge and insights with smallholder cacao producers in Colombia

4-Mar-2020 by agricompas

Cacao beans. Photo Credit, FEDECACAO

By Deborah Foy, Agricompas

The Reading Cocoa Group is a globally important centre for cocoa research and a leading force behind the development of more sustainable cocoa farming practices. Led by Professor Paul Hadley, the Reading Cocoa Group focusses on quantifying yield-determining processes in cocoa, particularly in the context of climate change. A key focus is higher productivity and greater resilience to unfavourable climatic conditions.

In December 2019, Professor Paul Hadley and colleagues joined a field trip to Colombia. They participated in high-level discussions with Agrosavia around the impact of climate change on cacao production and travelled to Rionegro in Santander to meet farmers and partners participating in the ‘Digitisation of Cacao’ project.

Led by Agricompas, ‘Digitisation of Cacao’ is funded by the Prosperity Fund’s AgriTech Catalyst. The project aims to use digital technologies to boost Colombia’s huge potential to become a major global cocoa producer. The University of Reading is a key partner in this innovative, multi-stakeholder partnership. Over a period of 18 months, the University will bring its international expertise in crop modelling to improve the sustainability of the cocoa sector in Colombia.

Professor Handley (right) visiting a cocoa field trial site in Rionegro, Santander together with Agricompas CEO Roelof Kramer (left)

Professor Hadley comments: “Cacao farmers in Colombia are hampered by a lack of scientific knowledge and analysis on the crop at farm level. The platform being developed by the project partners will allow for the storage, monitoring and analysis of various climatic and soil factors – all of which have the capacity to influence the optimal growth and production of cacao. Combined with further advances in machine modelling and artificial intelligence, this will enable farmers to optimise cocoa production, enhancing their commercial viability.”

Professor Hadley continues, “It’s exciting to see the potential that is realised when you harness the power of data. But in tropical environments such as the ones I visited on my trip to Colombia, collecting accurate data is not without its challenges. We’re working alongside other partners in the consortium – and applying the latest in digital technologies – to see how best we can respond to this challenge and translate data into knowledge and insight.

Love in the time of climate change

14-Feb-2020 by agricompas

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.

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