A way towards a living income for Ghanaian cocoa farmers

A way towards a living income for Ghanaian cocoa farmers

Lidl will join forces with Rikolto, Fairtrade and Kuapa Kokoo to produce and sell Way2Go: a chocolate bar that is 100% sustainable across the supply chain.
This project is part of the following focus areas:

Today, 70% of global cocoa production is sourced from West Africa and, within this region, the vast majority of cultivated cocoa fields are located in Ghana and Côte d’Ivoire. Here, the growth in cocoa production has led to deforestation and as a result, there are almost no virgin forests left in Côte d’Ivoire today, while in Ghana they are at risk due to agricultural expansion in protected areas.

The other big problem in the cocoa sector in West Africa is child labour on cocoa plantations, and children not attending school. To deal with this issue, in the past, many educational projects have been started in the area with the aim to boost school attendance among farmers’ children. While this kind of interventions achieved success, especially in Ghana, there are still issues of child labour in some cocoa farms as a result of migration of children from neighbouring countries such as Burkina Faso to work on cocoa farms.

In December 2018, the Beyond Chocolate Charter was launched by the Belgian government as a joint ambition shared by the Belgian chocolate and retail sector, civil society, social investors and universities to make Belgian chocolate more sustainable. This industry-wide commitment aims to tackle child labour, combat deforestation and ensure a viable income for local cocoa producers. The Belgian chocolate sector aims to achieve 100% sustainably-produced chocolate by 2025 and a living income for all cocoa farmers by 2030.

We see that it is often not enough, for small-scale farmers, to have a guaranteed minimum price for a cash crop such as coffee or cocoa. Therefore, this project will be based on the Living Income framework. It aims to tackle the root cause of problems in the cocoa industry: poverty. If we do not look at farmers’ income first, tackling deforestation and child labour will remain problematic. The Living Income calculates the net annual income a farmer’s family’s needs in order to fulfil their basic human rights in a specific location. This project will be used to test the implementation and calculation of this new concept.

Abdulahi Aliyu Cocoa Cluster Coordinator

In 2015 Lidl committed to have all its chocolate supply sold accordingly to the sustainable standards of UTZ, Rainforest Alliance and Fairtrade. The goal was achieved in 2016 and, 2 years later, in 2018, Lidl signed Beyond Chocolate. As a result, Lidl invited stakeholders around the table to develop a first initiative around Living Income in the chocolate sector. Rikolto and Fairtrade were involved since the beginning and, after 2 years, a first product was born under the name Way To Go: a chocolate bar for which an extra premium, on top of the Fairtrade premium, is paid to substantially move towards a Living Income. Today Way To Go chocolate bars can be found in Belgium and Netherlands and other countries will follow soon.

Philippe Weiler Head of Sustainability at Lidl Belgium & Luxemburg
For Rikolto it is our Ghanaian colleague Abdulahi Aliyu who will lead the project. The project aims to produce and sell a chocolate bar that is 100% sustainable across the supply chain and it is therefore an important test case for the Living Income framework. Furthermore, it is the first time that Rikolto applies its cocoa expertise in Ghana, which makes this project even more stimulating.
Bram Markey Business Developer

Rikolto will join forces with other 3 players: supermarket chain Lidl, Fairtrade Belgium & International and Kuapa Kokoo. Kuapa Kokoo is a pioneering farmers’ cooperative and leading producer of ethical cocoa beans that has over 100,000 registered members organised in 1,300 communities distributed among six cocoa growing regions in Ghana. Furthermore, Kuapa Kokoo has Rainforest Alliance, UTZ and Fairtrade certification. Lidl, in addition to being the initiator and facilitator of the project, will act as overall coordinator while Rikolto and Fairtrade are the official strategic organisations on the ground who will implement the project, leading to a living income for the 440 cocoa farmers involved in the Way To Go supply chain.

CHALLENGES

  • Many farmers still live in poverty. Often it is not enough for a small-scale farmer to have a minimum price guaranteed for a cash crop such as cocoa. As poverty is the root of the problem, if we do not make sure that farmers can make a decent living out of their activities, deforestation and child labour will not be solved.

  • Since deforestation and child labour are a strong feature of cocoa production in the West African countries, these are the primary challenges to tackle.

  • Even though Ghana is one of world’s biggest cocoa suppliers, its productivity in the cocoa sector is among the world’s lowest. An average farmer’s household from KK produces less than 1 ton of cocoa beans per year. This is because, in addition to stopping investing in their farms, many farmers grow the crop on plots that are too small and with improper practices that do not allow them to sell enough to live on. That is why it is necessary to both improve crop productivity and diversification and to increase additional income-generating opportunities for farmers.

  • Bridging the gender gap. The real gender challenge is at household level, not in the cooperative. Generally, in the cocoa sector, women work in cocoa bean harvesting and processing, but because of their socio-economic conditions and cultural influence, women are not allowed to own a property in some communities, which makes it harder for them to access land. In addition, as cocoa is a ‘cash crop’, there is the perception that it is a man’s crop ‘because a man needs money’, making women generally much less engaged in the sector. The tangible consequence is that when a woman wants to be involved in farming, she is more likely to be running a horticultural or fruit business. The reality is not that there are no women cocoa farmers, but that it is harder for them to get involved in the business or sector.

  • Currently the average cocoa farmer is older than 50, and it is difficult to find examples of generational continuation. Most young people, even if they already own a small plot, do not want cocoa farming to be their way of life. This is because young people want quick money and they believe that cocoa farming is too much hard work for a non-profitable business: a cocoa farm only generates income 5 years after it has been established.

STRATEGIES

  • We chose to form a partnership with Kuapa Kokoo in this programme since, in addition to having been Fairtrade certified for a long time, it is a strong organisation that can guarantee 100% transparency and traceability. Within the cooperative there is a dedicated committee monitoring farmer communities to prevent child labour.

  • Lidl will act as overall coordinator of the Way To Go initiative. Together with Kuapa Kokoo, two interventions were selected on income diversification and good agricultural practices that will contribute directly to the future sustainability of the business. These interventions will be managed jointly by Rikolto, Fairtrade Africa and Kuapa Kokoo. The more Way To Go advances, the more farmers will be able to benefit from the interventions. Rikolto, besides giving advice, will carry out a cost-benefit analysis and look at the economic rationale of the project’s interventions. In the future, Lidl hopes to be able to add more interventions, focusing on e.g. agroforestry, child labour, …

  • Since diversifying farmers' incomes and professionalising their production process are two important pillars of this projects, our colleagues will provide support in this regard.

  1. We will train experts among the farmers to ensure that plant protection products are used according to the strictest standards, that pruning and post-harvesting practices will be carried out properly and, at a later stage, we will introduce agroforestry to plant shade and fruit trees within cocoa plantations. This will contribute to reducing the negative impact of climate change and guarantee increased productivity.

  2. Income diversification is the backbone of this project, and we will join forces with the farmers to grow other crops and to process additional products such as rice, honey and soap and bring these products successfully to the market.

  • In a first stage, Rikolto will set up a Village Savings and Loan Association (VSLA) system, which is a microcredit activity at community level to make investments in farming and community businesses possible. In the past, when such initiatives were set up, we observed that women were the first to come and, finally, the number of women who benefited from VSLAs was greater than the number of men, making it a very strong female empowerment tool. Through the VSLA, we will train women to start seedling nursery activities. In this way, women can sell the seedlings to other community members who will need them for agroforestry practices, get an income from them and, at the same time, contribute to solving the issue of deforestation.

  • Young people who want to get directly involved in cocoa production, and who already own a small plot and have other resources, will be supported in applying good agricultural practices and helped to set up their business with advice and encouragement. The second option will target those who do not want to be cocoa farmers. We will train and help them to start Small and Medium Enterprises (SMEs) that will provide services such as pruning and weeding.

  • Lessons learned will be shared with the Living Income Community of Practice and Beyond Chocolate co-signers.

Duration of the project: Rikolto's cocoa project in Ghana will last for 2 years, from June 2019 to the end of May 2021.

Kuapa Kokoo, established in 1993 and headquartered in Kumasi, was the first cooperative in Ghana to be ever Fairtrade certified.

What is the expected number of project beneficiaries?

During the course of the project we will be working in close contact with at least 440 farmer households, i.e. approximately 2,640 people. As the project’s purpose is to share the knowledge acquired within the whole Kuapa Kokoo organisation, it will indirectly reach its 100,000 associated members and their families, which amounts to approximately 600,000 people.

Short term: the project aims to improve the living conditions of at least 440 cocoa farmer households in Ghana and to raise the awareness of millions of Lidl customers.

Medium term: the project aims to increase the numbers of cocoa farmers by expanding to other chocolate products, spreading to other Lidl countries and inspiring other retailers.

In the long term it is the ambition of Lidl to move not only its cocoa, but all its commodities sourced in the Global South towards a Living Income or a Living Wage. There is no other alternative. And luckily Lidl is not alone. All important and credible players will have to make this shift. And Rikolto is ready to support this transition.

This project will be one of the first achievements of the Beyond Chocolate Charter signed by all major Belgian sector players. In implementing this project we will go beyond our work in Ghana.

What do we want to achieve by 2021?

The project aims to improve the living conditions of at least 440 farmer families (both men and women) in Ghana, to make their business activities resilient and sustainable and to raise awareness among more than one million customers across the countries where the chocolate bar will be sold.

What do we want to achieve by 2030?

The project aims to increase the numbers of beneficiaries by expanding to more Kuapa Kokoo members and other chocolate products, spreading to other Lidl countries and by inspiring other retailers.

Fairtrade Belgium

Fairtrade Belgium

As a member of Fairtrade International, Fairtrade Belgium plays a bridging role between the international objective and the Belgian market: creating a vibrant market for Fairtrade products in Belgium.

Kuapa Kokoo Cooperative

Kuapa Kokoo Cooperative

Kuapa Kokoo Cooperative Cocoa Farmers and Marketing Union Limited (KKFU) is Ghana’s pioneer and the leading producer of ethical cocoa beans. The Union has over 100,000 registered members who are primarily smallholder cocoa farmers organized into about 1,300 communities in 57 primary Societies (District) in six cocoa growing regions. It was established in 1993 with 2000 farmers in response to the partial liberalization of the cocoa sector in Ghana.

Lidl

Lidl

Lidl is a German supermarket chain, based in Neckarsulm, Germany,that operates over 10,000 stores across Europe and the United States.

Fairtrade International

Fairtrade International

Fairtrade International is a product-oriented multistakeholder group aimed at promoting the lives of farmers and workers through trade. Fairtrade's work is guided by a global strategy focused on ensuring that all farmers can enjoy secure and sustainable livelihoods, fulfil their potential and decide on their future.

Abdulahi Aliyu
Abdulahi Aliyu
Cocoa cluster coordinator