Cadbury hopes investing in Ghana’s cocoa farms will stop young workers deserting for the city

Cadbury has been sourcing from Ghana for 100 years and today buys 70% of its cocoa, a key ingredient in chocolate, from the west African country. All Cadbury chocolate sold in the UK – in brands such as Dairy Milk, Flake and Creme Egg – is made using cocoa beans grown in Ghana.

This gives Cadbury a “unique position” when it comes to helping Ghana’s cocoa farmers improve their lives, says the company’s conformance and sustainability director, David Croft. One in seven Ghanaian cocoa farmers, or 100,000 individuals, supply Cadbury through the Ghana Cocoa Board, the state body that controls Ghana’s cocoa industry.

Cadbury sources from Ghana because of the country’s high quality cocoa beans – for which farmers are paid a 10% premium on the world market price. But in recent years, productivity in Ghana’s cocoa sector has dipped, putting the secure supply of Cadbury’s main source of quality cocoa at risk. The UK Institute for Development Studies and the University of Ghana warned in August that cocoa farms in the country were generating just 40% of their yield potential.

The research, commissioned by Cadbury, found that cocoa output was falling as farmers got older and their children turned down farm work for jobs in cities. Report author Dr Stephanie Barrientos explains: “The whole sector is stuck in more traditional ways and young farmers are wanting to move on.”

To secure supply of quality cocoa from Ghana, Cadbury is to invest £30m in rural development in the country over the next 10 years. The money forms the bulk of the £45m Cadbury Cocoa Partnership, a decade-long commitment launched in January to invest in communities that grow cocoa for Cadbury. Apart from Ghana, the partnership covers India, Indonesia and the Caribbean.

Croft says Cadbury has worked with other chocolate companies on building cocoa farming capacity, but “there was a need to scale up and reach more farmers more quickly”. Cadbury aims to help farmers increase their incomes through the partnership.

It will, for example, fund work to teach cocoa farmers about the benefits of pest-resistant hybrid trees, and how they can get hold of them. The company is considering giving farmers microfinance loans to help them grow other crops such as mangoes and sweet potatoes that will offer new sources of income. The goal, says Cadbury, is to support “community-led development” that puts the views of rural villagers at the heart of development plans.

Powerful partnerships

Kate Nicholas of World Vision, the NGO whose Ghana chapter is working with Cadbury on the cocoa project, says: “It is the real understanding of community needs and ability to empower people to tackle poverty that is essential to ensure that these kinds of partnerships and the schemes they create are sustainable.”

In September, Cadbury started asking farmers in 100 villages in Ghana’s cocoa-growing regions what they needed to improve their lives, a process the company says will take four months. Apart from World Vision Ghana, the company is consulting cocoa farmers through two other NGO partners, Voluntary Service Overseas and Care. All three sit on the Cocoa Partnership Board in Ghana, which includes representatives from the Ghanaian government, the UN Development Programme and the UK Department for International Development.

Cadbury is aware of the tensions that will arise from putting “community-led development” into practice. For example, its Ghanaian NGO partners are keen to encourage farmers to foster organic farming in the cocoa sector, where farmers rely on pesticides provided by the cocoa board. Cocoa farmers are upset that the government can only manage to give farmers two of the six pest-control products they have been promised. Croft says: “We are finding that the government is struggling to meet that responsibility.”

Cadbury’s head of corporate responsibility, Alison Ward, adds: “With a lot of villagers you talk to, the first thing they say they want is pesticides.”

Depending on what feedback it gets from cocoa farmers, Cadbury will have to decide how much of the £3m slated as part of the partnership in 2009 will fund projects to promote farming methods that reduce reliance on pesticides. It will have to manage the potential conflict between what farmers say they want and what NGO partners and other development experts say is best. Barrientos points out that Cadbury has started work with the Ghana Cocoa Board on a project to extend traceability in the cocoa supply chain back to individual farms – a prerequisite for being able to certify farms as organic.

While Cadbury has made a clear commitment to improve the incomes of Ghana’s cocoa farmers, it is up against a powerful demographic shift. In a sector where farmers survive on less than $1 a day, the cocoa partnership may find it easier to listen to what young farmers want than persuade them to unpack their bags and decide not to quit for the city.

Farmer funding

As part of the £30m Cadbury has pledged to Ghana by the end of 2017 through the Cadbury Cocoa Partnership, it has invested £1m in 2008. It plans to invest £3m in 2009 and £5m in 2010.

Aside from efforts to help improve farmers’ productivity and incomes, Cadbury is investing in rural education and wells to provide clean drinking water.

The company is looking at whether some villages in Ghana that do not have electricity could generate energy from solar power. Cadbury’s David Croft says such a step would only be taken if it had community support.

Cocoa facts

· 4% of the cost of a typical UK chocolate bar goes to farmers.

· Cocoa prices have fallen in the past decade, down 13% in 2005-06 compared with 1993-94.

· Ghana’s cocoa farmers earn on average only 63 US cents a day, even when non-cocoa incomes are taken into account.

· Ivory Coast and Ghana are the world’s largest sources of cocoa, although cocoa farming is spreading in Asia.

Source: Mapping Sustainable Production in Ghanaian Cocoa: Report to Cadbury, Institute for Development Studies and the University of Ghana, August 2008

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