West Africa Eyes Opportunity For Better Cocoa Prices With EUDR

There are concerns, mainly by civil society, about the potential implications of the European Union Deforestation Regulation (EUDR) particularly on West African smallholder cocoa farmers.

Cocoa production in the region is often cited for its contribution to deforestation and environmental degradation.

This negative perception no doubt plays against cocoa from mostly Cote d’Ivoire and Ghana in the international cocoa marketplace, resulting in persistently lower prices that perpetuate farmer poverty.

On the back of global deforestation and environmental concerns, the EU has introduced legislation aimed at reducing its contribution to the challenge deemed a major driver of climate change.

Effective 2024, firms importing targeted commodities like cocoa, coffee, palm oil, rubber, soy and cattle into the EU market will be required to prove their supply chains are ‘deforestation-free.’

According to the law, non-compliance would lead to an EU market restriction or ban.

In Indonesia and Malaysia, the development has sparked protests among oil palm and rubber farmers’ associations who are demanding the revocation of the EUDR while threatening boycotts.

Opportunity amidst fear

But in West Africa, despite the fears of possible adverse ramifications for the millions of smallholder cocoa farmers, one man sees the EUDR as a light on the horizon for better prices.

“There is always fear, but it has to be turned into an opportunity,” said Alex Assanvo, the Executive Secretary of Cote d’Ivoire-Ghana Cocoa Initiative (CIGCI) in an exclusive chat with Cocoa Post.

CIGCI is an intergovernmental organisation formed by the world’s top two cocoa-producer countries to tackle common challenges and make the cocoa sector prosperous and sustainable.

Assanvo, a former senior chocolate industry executive based in Europe, relocated to Accra in 2021 to lead the charge for just and remunerative prices for cocoa from the two countries.

EUDR to end lip service?

Because of this regulation, today, no one can escape the issue of living income and cost or price of cocoa.

Assanvo believes the law will bring an end to the era of industry’s lip service to addressing the economic leg of cocoa sustainability.

“If there were no legislation, we will continue to hear ‘supply management’, ‘we need to do this before and this or that’, but because there is a regulation and the same importing countries that are asking for clean cocoa, as they call it, then we are not the ones deforesting, someone is buying this cocoa,” he argued.

Among others, the EU Deforestation Regulation would practically be demanding traceability for the targeted commodities down to the farm, using GPS technology.

The West African cocoa bloc’s marksman indicated, that the two countries having already invested in elaborate traceability systems and technology, well ahead of the EU regulation, pointed to their unwavering commitment to sustainable cocoa production.

“We started almost 3 – 4 years ago, by implementing the African Regional Standards and traceability process through census in Cote d’Ivoire and Ghana. So, it has been done even before any legislation came,” noted Assanvo.

Investing in traceability systems

In Ghana, the cocoa sector is set for a full roll-out of the Cocoa Management System (CMS) in the upcoming 2023/24 cocoa year, according to Stephen Fiifi Boafo, Public Affairs Manager of Ghana Cocoa Board.

Mindful of the consequences of what the law brings, we are ensuring that a farmer, for starters, is not even producing in a forest zone, said Boafo.

In furtherance of the CMS, the country has been registering all cocoa farmers by mapping their farms with Global Positioning System (GPS) technology and tagging the information to the biodata of the farmer.

“If the farm is within a forest zone, then you do not qualify as a cocoa farmer; because this system we are developing, we will superimpose it on that of the Forestry Commission, so we can tell a farm that is within the forest zone and such a farmer is disqualified,” he explained.

He said successfully registered farmers are issued with the Cocoa Card, an identification with a QR code embossment which reveals the bearer’s data when read at the point of sale.

The Cocobod Spokesperson revealed that “From October this year before a farmer will be able to sell cocoa to the Ghana Cocoa Board for export, that farmer will come with a Cocoa Card” without which the farmer cannot sell their produce.

According to Boafo, Ghana’s Cocoa Management System has been hailed as advanced by peers from other cocoa-producing countries during a recent meeting organised by the European Union.

Cost of clean cocoa

“So, what we are bringing now is, ok you want this clean cocoa? Well, there is traceability associated to it,” said Assanvo.

The CIGCI boss intimated it is costing the two countries a great deal to invest in systems that show ‘proof‘ to the market and consumers that their cocoa is ‘deforestation-free.’

“This has a meaning, that means it has cost and this cost if it’s not featured [in the price of cocoa] then that means that they are not interested in doing any sustainability,” stated Assanvo.

Indeed, the market requirements for sustainable cocoa come with its attendant burden of cost for almost the entire value chain, beginning with the farmer and their production practices.

“Because there is compliance cost, the cost associated to all these measures, the role of the families, the households, the impact on the farmers. If it doesn’t bring anything, well we are not going to go anywhere, and therefore the mutuality principle is there,” Assanvo underscored.

He further observed, “This is the element that has been missing in all this Legislation; we see deforestation and even corporate due diligence, we hope that the last one will probably end up integrating some of these elements.”

Ghana and Cote d’Ivoire together account for over 60 per cent of the global supply of cocoa beans, the key ingredient for the over $100 billion per annum chocolate industry.

Regrettably, the duo command only 6 per cent of that value with millions of West Africa’s smallholder cocoa farmers earning incomes of less than one dollar (US$1) a day.

The European Union market is the largest buyer of cocoa beans from the West Africa region.

The cocoa-producing giants are resolute about changing the narrative, even as they are ready to embrace the soon-coming era of the EU Deforestation Regulation.

Economic Pact on Sustainable Cocoa

The Cote d’Ivoire-Ghana cocoa bloc reckons that there cannot be a real change that speaks to the interest of cocoa producers if the very architecture of the cocoa trade system is not fixed.

Therefore, in conjunction with key industry players and experts, the group has instituted a technical expert group.

They have the task of fashioning out solutions to address key market issues like accountability, monitoring, also the true cost of cocoa.

Everyone is looking for a new norm of cocoa – sustainability – which is coming with cost. This cost is not being considered and therefore we developed a process to build the Economic Pact.

A few months ago, the CIGCI signed an intent for agreement with the EU on the former’s proposed Economic Pact on Sustainable Cocoa (EPSC).

“We are bringing a new value to our cocoa and this is long-term because there is no way we are going to achieve any sustainability plan without looking at the economic element,” Alex Assanvo assured.

His sense of optimism springs from the successes of the bloc’s Living Income Differential (LID) price mechanism and the more recent monthly publication of country differentials measure, which he believes has “brought a bit of serenity in the sector.”

Cocoa Farmers’ Right to Dignity

Perhaps the EU may take advantage of this unique opportunity to demonstrate that, beyond deforestation and corporate due diligence, it also cares about the rights of those poor cocoa farmers to a life of dignity.

After all, those smallholder cocoa growers and their households are human beings, too, with rights to a life of ‘No poverty’, ‘Zero hunger’, ‘Good health and well-being’, ‘Quality education’, ‘Gender equality’, and ‘Decent work and economic growth’ as partly enshrined in the 17 Global Goals.

With the combined interventions of the EUDR and EPSC, European consumers, lawmakers, and environmental and human rights campaigners are practically wielding in their hands the wand and power to create a future that is sustainable, equitable and just for themselves and the marginalised cocoa growers in Africa.

Watch an excerpt of Alex Assanvo interview


Editor at Cocoa Post
Kojo is passionate about projecting the voices of cocoa. He also believes in cocoa value addition at origin as a model to redistribute industry wealth.
4th Steering Committee MeetingAlex AssanvoBryan AcheampongCCCCIGCICocoa PostCocoa PriceCOCOBODCote d'Ivoire-Ghana Cocoa InitiativeEconomic Pact on Sustainable CocoaEU Deforestation LawEUDRGhana Cocoa BoardGlobal goalsLiving IncomeMOFAWest Africa
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