RETHINKING PROCUREMENT MODELS IN THE COCOA SECTOR: RECOMMENDATIONS FOR MORE INCLUSIVE BUSINESS MODELS
The cocoa industry stands out as one of the most profitable sectors worldwide. However, paradoxically, the primary contributors to cocoa cultivation—namely, the farmers—often receive only a small fraction of the profits, typically around 7–10%. This imbalance is
especially evident in countries like Ghana, Ivory Coast, and Ecuador, where cocoa farming plays a significant role in the economy. Despite the substantial revenue generated by cocoa production, farmers in these regions struggle to attain a living income. Challenges they face include poor labour conditions, limited access to education and financial services, and inadequate infrastructure. These conditions perpetuate a cycle of problems, from human rights violations such as child and forced labour to market-related hurdles like low cocoa productivity and minimal bargaining power within the cocoa value chain.
Proposed solutions often focus on increasing cocoa production to boost farmers’ incomes. However, this approach is unsustainable due to high costs and adverse environmental impacts, including deforestation, biodiversity loss, and soil degradation. Moreover, the ongoing stagnation of farmers’ incomes exacerbates social inequalities and hinders efforts to enhance productivity. These challenges are further compounded by the looming threat of climate change, which jeopardises the stability and quality of cocoa production.
In response to these multifaceted issues, Rikolto is committed to cultivating fair and sustainable cocoa supply chains that benefit all stakeholders, especially smallholder farmers. As part of our array of strategies supporting a Living Income model for smallholder cocoa farmers, Rikolto advocates for inclusive business practices and promotes more equitable procurement policies. Our aim is to pioneer new approaches to doing business that can serve as a model for the entire industry, inspiring widespread adoption of these inclusive practices.
Area of focus: Cocoa
Author(s): Tom Van den Steen, Daniela Chamorro
Organisation/institution: Rikolto