Cocoa in the face of Covid: challenges and reflections from Latin America

Cocoa in the face of Covid: challenges and reflections from Latin America

22/07/2020
in News
This news is part of the following focus area:
Natalia Palomino
Natalia Palomino
Comunicación y gestión de fondos | Perú y Ecuador

"This pandemic challenges us, but also reveals the resilience of the cocoa chain". This refrain was echoed among cocoa organisations, chocolate manufacturers, non-profit organisations, cooperation and government entities from Latin American countries participating in the Online Cocoa and Chocolate Summit, which was held May 27-28.

Latin America has seven of the eleven cocoa gene clusters. This opportunity has led the region to stimulate the growth of fine aroma cocoa as a source of development for small producers and others in the value chain.

As Rikolto we drew five conclusions from the meeting that could reveal what lies behind this sentence:

1. Covid-19: An unprecedented global blow

At the international level, the main factors that commonly impacted cocoa producers and traders were restrictions on movement, curfews and shop closures. Never before have chocolate manufacturers experienced a crisis of this magnitude, that simultaneously affects all their cocoa suppliers and international chocolate markets in particular.

Latin American governments were challenged to address a multilevel crisis (international, national, regional, local) that affected different sectors of society, revealing not only the inequalities in the region, but also the gaps in the market.

“Covid has magnified pre-existing problems. If the issues of inequity and inefficiency in the markets become part of our agenda during the pandemic, we should keep them in the long term, as they will continue to be important dilemmas after it.”

Carla Martin (FCCI) United States.

2. Farmers: more vulnerable, and as always demonstrating their extraordinary flexibility to change

Cocoa associations in the Dominican Republic, Ecuador, Peru, Nicaragua and Guatemala presented the impacts of these restrictions on farming families in their countries of origin.

During the first month of the crisis, the cost of transportation increased, while the price of cocoa decreased. One of the biggest challenges was to collect wet cocoa from hundreds of small farmers who depended on the crop in remote rural locations, while respecting the social distancing measures and regulations issued by the different States (national, local).

The organisations implemented new protocols and managed support for hygiene supplies, while helping to keep rural communities safe from infection.

Pangoa cooperative in Peru saw the crisis as an opportunity to redouble its commitment to diversified plots with a dual purpose: feeding families and selling surplus fresh produce on the market to generate additional income.

"This pandemic brings something positive: the revaluation of local development and the land. The children have reunited with their parents in the field. Diversifying is helping us: we are developing crops for health and higher income."

Esperanza Dionisio (CAC Pangoa) Peru

The guild organisation Fenaprocacaho (Honduras) focused on improving its virtual and telephone communication to ensure a flow of information between farmers and cocoa centres on how the situation was evolving.

During the first emergency stage, the cooperative UNOCACE (Ecuador) organised the purchase of supplies and basic food for producers in extreme poverty, assuming the cost as an organisation, but also managing donations (from clients, cooperation) that eventually benefited more than one association.

3. Facing Covid, unity is strength

What is government, private initiatives and other actors doing to safeguard the future of the supply chain and the industry in Latin America? In Ecuador, for example, some of the efforts complement those of the government. These include improving conditions for the safe transportation of cocoa to export ports, as well as financial support and the provision of safety and security equipment:

  • Initiatives such as MOCCA work with international partners to leverage new private resources to finance the delivery of supplies.

  • FCIA recently launched a new web portal (makeminefine.com) designed to promote sales of 80+ international companies during store closings in the wake of the pandemic. It includes an ongoing online training offering in partnership with various initiatives on the continent.

  • The company Cacao Latitudes is taking advantage of the opportunities presented by the pandemic to involve young people in training activities.

  • The Central-American SICACAO Platform is analysing the various types of risk, and the changes that the next decade will demand. Therefore, they have started monitoring key indicators together with FAO, MOCCA and Rikolto, to build a risk mitigation agenda in the sector.

"The impacts of Covid have not yet materialised, but taking into account various risks, we have started monitoring key impact indicators on cocoa together with FAO, MOCCA and Rikolto; in order to mitigate future impacts on the cocoa sector.”

Oswaldo Segura SICACAO, Costa Rica

4. We can bet higher on cocoa sustainability

Much of the work to make the cocoa supply chain more sustainable and high quality prior to Covid-19, now forms the basis of the response during the crisis. It is therefore essential that these existing initiatives and structures are renewed today in favor of the major challenges that will continue after Covid. I mention a few:

  • Minister Iván Ontaneda Berrú (MPCEIP-Ecuador) highlighted the Premium & Sustainable seal (for environmentally sustainable products) as the future of Ecuadorian agriculture, as it strengthens confidence in Ecuadorian products with high differentiated value, but also facilitates the entry of products such as fine aroma cocoa into the international market.

  • For associations such as ANECACAO (Ecuador), FENAPROCACAHO (Honduras), APPCACAO (Peru), the major challenges during and after Covid must continue to be addressed. They include: differentiation of the quality of Latin American cocoa, deforestation and climate change; seeking a greater connection with the consumer, and adapting to the new reality.

"The crisis is drawing our attention to how much we are really working on the resilience of the sector. Agroforestry systems are an example of a model that we are already promoting together with the World Cocoa Foundation, CIAT and other partners, through communities of practice, which could contribute to increasing the resilience of cocoa families and strengthening the resilience of the sector".

Fausto Rodríguez Rikolto
  • The company Conexión Chocolate explains that, because they represent the future of cocoa, young people should also continue to receive support during the pandemic. Today they are shaping the future of the industry with chocolate bars that are aimed at world markets and are co-created in alliance with the producers' association UNOCACE, and Rikolto as a strategic ally. These bars will continue to provide a decent income to young cocoa farmers today, when they need it most.
  • The MOCCA initiative (USDA, Technoserve, Lutheran World Relief, Rikolto), in partnership with Cacao Móvil, promotes the use of new technologies to provide training on cocoa cultivation and marketing in Latin America, strengthening a network of specialised promoters whose long-distance accompaniment of producers is more valuable today than ever before.
  • The Alianza Cacao initiative (Peru) believes that producers in rural areas can benefit from digital payments, which would mitigate the risk of contagion related to queuing at banks. It has launched a pilot project in coordination with banks, social organisations, and government entities to make electronic money a reality for cocoa families.
  • In Central America, work is being done on food security for families with agroforestry and diversified systems. These models ensure new income for families, but also climate resilience for cultivation.
  • Rikolto, World Cocoa Foundation and CIAT, among others, work in communities of practice for a climate-smart cocoa, with interventions that will strengthen the policies of the cocoa sector in the region to sustain the future of cocoa.

5. Turning negatives into positives: reviewing the sustainability and resilience of the sector...

After the initial shock of the crisis, the industry and the chain are recovering, knowing that returning to business as usual is not an option. We hope that the Summit has become a space that promotes the recognition of the situation in which the sector finds itself, making its challenges and reflections more visible today, and more sustainable and resilient tomorrow. Let us use this crisis as an opportunity to strengthen the chain.

Online Cacao and Chocolate Summit 2020

The Online Cacao And Chocolate Summit was organised by Conexión Chocolate and members of MOCCA - Maximising Coffee and Cocoa Opportunities in the Americas, a five-year initiative funded by USDA, led by TechnoServe with Lutheran World Relief responsible for the cocoa value chain efforts and Rikolto as implementing partner in Ecuador. Grocer's Daughter Chocolate and the Fine Chocolate Industry Association (FCIA) are strategic partners.

Visit the website of the event