1.1. Wicked Problems Converge on Cocoa Farms
The context of cocoa farming has changed little in the last sixty years during which cocoa has been traded as an international commodity [1
]. Whilst the term cocoa means “the food of the gods”, at farm level, the cocoa sector faces a number of deeply embedded, interrelated challenges. These include old trees, pests and diseases, which lower tree productivity [2
]; low farmer and worker profits and incomes [5
]; persistent poor labour conditions; the use of child and forced labour [9
]; negative environmental impacts, such as deforestation, soil degradation, and soil and water pollution [11
]; coupled with political instability in many of the origin countries [12
]. These wicked problems have proved difficult to solve because of incomplete, contradictory, and changing views on how sustainability has been defined in the cocoa sector [16
]. Small-scale farmers continue to dominate cocoa production, particularly in West Africa, where they produced an estimated 73% of total production in 2015 [17
]. These farmers generally rely on cocoa for a major proportion of their household income [18
], and form part of a highly segmented value chain: selling dried and fermented cocoa beans to individual traders or cooperatives, who sell to traders and exporters. Traders then sell to processors and confectionary companies which process cocoa into intermediate products (cocoa powder, butter, and liquor) and, then, into food and cosmetic products [19
1.2. The Growth of Voluntary Sustainability Standards and Services to Farmers
In contrast to the cocoa farm household scale, at a value chain level, virtually every dimension of international cocoa value chains has changed in the last two decades [20
]. In major producing countries, such as Ivory Coast, Ghana, Indonesia, and Cameroon, since the 1990s, exports, market power, and price setting have been largely determined by the private sector. Sufficient quality supply has increasingly become an issue due to growing demand [7
] and supply variability, due to large annual fluctuations in cocoa production caused by multiple factors, particularly the weather. The tight relationship between supply and long-term cyclical recession and expansion booms has affected global market and farm gate prices [12
]. Bean quality has generally been increasing, due to training, increasing use of drying equipment, and market and regulatory standards. The governance of production and quality aspects, input credit and supply, extension services and market infrastructure, has been state-controlled in the main West African producing countries. However, producing country governments have gradually lost their ability to manage the international cocoa market and shape their own domestic markets. Since the late 1990s, a market-based corporate governance and price negotiation system has developed in many production countries, with the breakdown of national institutions, low yielding cocoa harvests, and pressure from international financial institutions for economic structural adjustment. Foreign companies have increased their investments, integration, and position in the chain. Exporters and major traders, such as Cargill, Barry Callebaut, Olam, and Armajaro, then began to buy and sell using London Cocoa Futures market prices. This liberalised system left farmers exposed to global price fluctuations and resulted in reforms in Ghana and Ivory Coast in 1999 and 2012, respectively, including privatising buying and setting minimum export prices [22
]. Increases in cocoa prices have been more fully and rapidly transmitted to consumers than decreases, indicating the market power of traders and chocolate manufacturers [24
] and the increasing concentration due to mergers, and vertical and horizontal integration. Processors Barry Callebaut and Cargill account for 70% to 80% of cocoa processing worldwide, with traders and grinders Barry Callebaut, Cargill, Olam, Ecom, Sucden, Touton, CEMOI, Cocoanect, and Blommer accounting for 60% to 80% of global cocoa processing. The six largest chocolate manufacturers (Mondelēz International, Nestlé, Mars, Hershey’s, Ferrero, Lindt und Sprüngli) transform 40% of chocolate products worldwide [14
]. Despite large fluctuations in demand and supply [15
], demand for cocoa grew by 3.3% annually from 2002 to 2011 [8
These institutional, economic, and market changes and restructuring in the cocoa and chocolate value chain have created space for innovation, particularly new partnerships and sustainability initiatives [29
], defined broadly in the terms embraced by the United Nations sustainable development goals as including ending poverty and hunger; improving health and education, water, and sanitation; reducing inequalities; decent work and economic growth; combating climate change; responsible consumption and production; protecting and restoring marine and terrestrial ecosystems; and reversing degradation and biodiversity loss.
As Figure 1
shows, the majority of sustainability initiatives started in the mid-2000s, and have grown significantly, mainly by replication of similar projects and initiatives by different companies, NGOs, and service providers. They have focused on the two main producing countries, Ivory Coast and Ghana, with outscaling to other larger producer countries. Precise numbers of farmers and cooperatives participating, and volumes produced, are not available, as farmers can join more than one trader’s initiative and have multiple certifications.
Four types of sustainability initiatives are found in the cocoa value chain to address these multiple, long-running “wicked” problems [29
Voluntary sustainability standards (VSS) have a programmatic nature, and consist of different interlocking mechanisms of which the most important are standards (codes of conduct), internal management system requirements to allow for group certification, traceability requirements, and systems, independent verification, and consumer facing labels. VSS are usually owned and governed by different stakeholders, including producers, retailers, and NGOs [30
]. Retailers, chocolate product manufacturers, traders, and processors have all adopted VSS, which is the main force driving the adoption by producers.
Individual corporate initiatives are a form of corporate social responsibility and self-regulation, whereby a business monitors and ensures active compliance with the spirit of the law, ethical standards, and national or international norms. A firm may engage in actions that appear to further a social or environmental good, beyond the interests of the firm and that required by law [31
]. Corporate programmes have increasingly been used by traders-exporters, processors, and manufacturers since the mid-2000s, who have offered packages of interventions or services (such as organising farmers into groups, training, credit, and farm inputs (fertilisers, agrochemicals, cocoa seedlings, equipment) to farmers and their organisations, as a way to secure supplies of cocoa beans of specific quality, produced in specific, often traceable, environmental and social conditions.
Platforms, networks, and associations refer to partnerships of private, public, research, and/or civil society (CSO) or non-governmental (NGO) organisations collaborating on a common goal of sustainability with a declared policy or programme and plan of action.
NGO and CSO campaigns have aimed to raise awareness and lobbied for changes on a sector and chain scale.
Many of these sustainability initiatives overlap: platforms, networks and associations have been used to launch VSS and support the introduction of corporate initiatives. VSS have often been accompanied by packages of services, provided by CSOs, NGOs, and/or government agencies. There exist both producer country agencies, such as via the Ghana Cocoa Board (COCOBOD) in Ghana, and the Fonds Interprofessionnel pour la Recherche et le Conseil Agricole (FIRCA) and Conseil du Café Cacao in Ivory Coast; and consumer country government agencies, such as the Dutch Sustainable Trade Initiative (IDH), and embassy programs, such as German Development Cooperation (GIZ) and Swiss Economic and Development Cooperation (SECO). There have also been projects and programmes funded by international organisations, such as United Nations Food & Agriculture Organisation (FAO) and the United Nations Development Program (UNDP), and World Bank. Traders have also collaborated in a variety of national and international associations and platforms with certifiers, and partnered with research organisations, as well as with government organisations [29
Voluntary sustainability standards have been some of the most notable sustainability initiatives in terms of their increase in scope, scale, and growing coverage of value chain stakeholders. UTZ is a certification program and a label for sustainable farming. UTZ merged with Rainforest Alliance in 2017. UTZ, followed by Fairtrade and Organic, have been the most popular VSS adopted by cocoa traders, chocolate manufacturing, and retail companies from 1987 onwards, shown in Figure 2
. In West Africa, UTZ certified cocoa grew sevenfold from 2010 to 2017, by which time 329,978 farmers in Ivory Coast and 144,007 in Ghana were certified, producing 671,854 tons and 176,200 tons i.e., 34% and 19% respectively of the 2016/2017 national production [32
]. The UTZ standard focuses on mainstreaming sustainability in farming practices, promoting improving farmer’s agricultural and management practices, with a chain of custody approaches, traceability, and transparency reflecting concerns by consumers and NGOs about chain governance. Seven of the main trader-exporters and processors in West Africa have adopted UTZ and, often, a second certification scheme.
Despite the growing body of literature assessing the impacts of sustainability initiatives [32
], questions remain about whether voluntary sustainability standards and associated interventions are effective, and with what environmental and social-economic outcomes. Many evaluations attempting to answer these questions have been small scale, limited to specific locations, certification standards, and countries; cover a limited time period; and have been published as grey literature, where the methodology and robustness is often unclear. To fill this gap, this study uses a large sample of stakeholders in the two largest cocoa production countries, rigorous qualitative and quantitative methods to investigate the impacts of voluntary certification and related packages of services, asking what has been the impact of sustainability-focused interventions on cocoa farmers in West Africa?