1 “Don’t Forget the Cocoa Farmers” Tony Lass, MBE CHOCOA 2016 Amsterdam 5 th February 2016

Cocoa is a Smallholder Crop Each grower in W. Africa may have some 3 ha of cocoa Yields low; global average is perhaps as low as 333 kg/ha; unchanged over last years; high loss to pests/diseases (maybe as high as % production  Assume  333kg/ha on 3 ha equals circa 1 tonne/annum/farm World price (physical) /tonne = USD 3000 Farm gate price (say 67%) = USD 2000 Size of av. cocoa farm family 2/3+3/4 = 5/7 heads Cocoa REVENUE/family member/day = USD1.09 – USD 0.78; with NO allowance for costs (tools, chemicals needed) to grow cocoa or for payment for labour from farm family and no chance to pay for hired labour UNDP considers people are in poverty if daily income below USD2.00/person and in absolute poverty if daily income below USD1.25/person Are cocoa users proud of such a supply chain?

Why grow Cocoa in 2016? Farmers are ageing (55 – 65 years of age); cocoa farms ageing too – planted by these ageing farmers years ago; economic life of a cocoa farm only 25 to 30 years For production of 333kg/ha, West African cocoa farm estimated to need some 67 man-days/annum Cocoa growing is hard physical work and is ideally only for the physically fit Current rural labour rates in W. Africa estimated at some USD /day with hirer to supply food to workers as well Most young villagers do NOT now aspire to be cocoa farmers; seen as low return for effort, hard work, drudgery AND young people want services (electricity, water etc); so they move to towns – even if they have no job in prospect Who are to be the future cocoa farmers? Who will replant these cocoa farms?

Responsibilities for Improvements to Cocoa Supply Chain? Governments of producing countries have duty to provide healthcare, education, potable water, secure land tenure, roads etc for their citizens – though their resources may be scarce; cannot only be responsibility of cocoa traders, processors or users Major traders /processors /users now engaged in programmes to alleviate some of these constraints to cocoa growing – some programmes are visionary but some initiatives are rather less so Various COLLECTIVES now also engaged including: 2QC in Cd’I; CocoaAction, IDH; International Cocoa Initiative, ISO/CEN work on Sustainability Standard; Global Cocoa Agenda of World Cocoa Conferences, VOICE Network etc;

Certification?? Certification of cocoa growing processes (by Fairtrade, RFA, UTZ or other scheme) cannot deliver the total solution but maybe a useful tool to train cocoa farmers and assist in improving productivity in cocoa growing systems Sadly these schemes can usually only work with farmer groups thus disadvantaging some farmers who are not members – even of an informal farmers group Presently, not all certified cocoa beans sold as certified & not all certified cocoa achieves a premium price Ideally certified cocoa programmes need a long term guaranteed buyer to ensure increased farmer effort is rewarded Certification is a step but not the whole solution

Future ? Six largest chocolate companies active but estimated to only consume some 35 – 45 % annual global cocoa production Remaining 55 – 65% global cocoa are either much less engaged, not engaged at all or are getting a “free ride” How should the cocoa world engage this silent majority of cocoa users to improve cocoa supply chains? Could/should the traders/processors who handle this tonnage develop ways to engage this silent majority?

7 Thank you for you kind attention Tony Lass Fox Consultancy Services Ltd Fox Hill, Henley Road, Claverdon, Warwick UK CV35 8LJ

Who am I? Worked for major UK chocolate company involved in cocoa supply chain for 36 years; including some releases for some short term consultancy assignments for a number of international donors Since retirement, continued to act as a consultant for them for some years and now for both companies and donors on projects in all parts of cocoa supply chain Presently in early stages of re-writing 5 th Edition of standard text on the cocoa crop (“Cocoa”); that is published by Blackwell Science; will be loosely based on 4 th Edition of which I was joint author