Documente Academic
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Documente Cultură
March3,2009
www.fsgimpact.org
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SummaryofCtedIvoireCocoaSector
AddressingCtedIvoirecocoasustainabilityissuesisanindustryandnational imperative
BothindustryandcountryhavesignificantstakesinthehealthofthecocoasectorinCtedIvoire
CocoagrowingconditionsinCtedIvoirearebleak butcanbeimproved
Economic,social,environmentalconditionsarepoorandinadownwardspiralofdecline Conditionsarealreadycreatingvolumeandqualityrisk TurnaroundofthecocoasectorinCtedIvoireisbothpossibleandneededalongwith improvementsinotherorigins
ClearstrategiesexisttotakecorrectiveactionStakeholdersmustmobilize urgently
Priorityshouldbeplacedonimprovingeconomicstothefarmer Solutionstoimprovefarmerincomeareknownbuthavenotbeensuccessfullybroughttoscale Improvingfarmerincomewilldriveconcurrentenvironmentalandsocialimprovements,in combinationwithotherefforts Addressingchallengesinthecocoasectorcanbeintegratedwithbroaderagriculturaldevelopment efforts
Achievingsuccesswillrequireanewlevelofcollaboration
Developing/workingwithinacommonagenda:government,NGOs,donors,supplychainandthena publicprivategovernancestructureforcocoasectoractivitiesinCtedIvoire Integratingcommercialinterestsinsustainabilitywithpublicgoodsinvestments
CocoaSustainabilityinCtedIvoireAVisionforChange
FSGSocialImpactAdvisors
CtedIvoireCocoaCaseStudy
I. II.
SituationAssessment VisionandStrategies
III. TakingAction&Partnerships
CocoaSustainabilityinCtedIvoireAVisionforChange
FSGSocialImpactAdvisors
SituationAssessment
CtedIvoireIstheLeadingCocoaProducingCountryintheWorld, SupplyingMorethanTwiceasMuchastheSecondLargestCountry
AnnualCocoaProductionbyRegion,2007
2,257,000tons
100% Cameroon Nigeria 80 Ghana Mexico PNG DR
602,000tons
582,000tons
Ecuador Indonesia
ROW
Brazil
Africa
Asia
1 L. ROW America
RegionasPercentageofGlobalSupply
CtedIvoirecanbecomenotjustavolumeleader,butaleaderinsustainable, competitive,intensifiedanddiversifiedcocoafarmingsystems
Source:Industrydata1Cocoafromtherestoftheworldrepresentslessthan10%oftotalproductionandisfromsmallerorigincountries(e.g.,PapuaNewGuinea)
CocoaSustainabilityinCtedIvoireAVisionforChange
FSGSocialImpactAdvisors
SituationAssessment
CtedIvoireIsRankedAmongtheLowHumanDevelopmentCountries accordingtotheUnitedNationsHumanDevelopmentIndicators
Cted'IvoireCountryLevel DevelopmentChallenges
PoliticalUncertainty Electionshavebeenpostponedseveral timesandmaynotbeheldin2009 WeakEconomicGrowthandOutlook Reducedforeigninvestmentandslow economicgrowthhaveresultedfrom uncertainfuture Percapitaincomedown15%since1999 DiminishedPublicServicesandInvestment 72%ofcocoafarmingvillagesdonot haveahealthcenter 9%havenoprimaryschoolwithin3km
55years
164/177
48.7%
125/139
5/5
39.6%
160/172
5/5
$1648
147/174 166/177
5/5 5/5
UNHumanDevelopment IndexTotalRanking
CtedIvoireleadsincocoaproduction,butnotindevelopmentagainstother cocoaproducingcountries
Source:UNDPHumanDevelopmentReport,CIAFactbook,InitialDiagnosticReportonChildLabor 1SelectedcocoaproducingcountriesincludeIndonesia,Ghana,Cameroon,andNigeria 2DataonlifeexpectancyisfromCIAFactbookrankingsarefromUNDPHumanDevelopmentReport
CocoaSustainabilityinCtedIvoireAVisionforChange
FSGSocialImpactAdvisors
SituationAssessment
TheVastMajorityofCocoaFarmersinCtedIvoireAreatSubsistence Level,WithLimitedAbilitytoInvestSufficientlyinTheirFarms
Cted'IvoireAverageFarmandFamilyLevelEconomics
KeyFarm Indicators
CurrentAvg.Yield CocoaVolume CocoaPrice
CocoaFarmingInefficient,under priced,subsistence
450Kg/Ha Averagefarmsize3Ha 1.35tons Recentfarmgatepriceof$11.40/Kg ~$1600(GrossIncome) Grossincometoolowtoinvestinoptimal farminputs Costofoptimalfarminputs($300/Ha or$900totalona3Hafarm) 49yearsold CtedIvoire:52kgofcocoa Indonesia:8kgofcocoa
Income
1 AverageFarmerAge
1IncountryexpertinterviewsFranoisRuf,CIRAD
CocoaSustainabilityinCtedIvoireAVisionforChange
FSGSocialImpactAdvisors
SituationAssessment
ChallengingEconomic,Environmental,SocialandPoliticalConditions inCtedIvoirePlaceConsiderablePressureontheCocoaSupplyChain
Economic LowCocoaYields450Kg/Ha TaxBurden34%versus~15%inGhanaandzerotoverysmallinothercocoaorigins ResultingLowShareofPricestoFarmers Environmental Deforestationnonewland 1 FullSunCocoaSystems 35%noshade DecliningSoilFertility~14% accesstofertilizers Social LackofSocialServicesOnly ~28%ofcocoafarmingvillages haveahealthcenter ChildLabor89%ofchildren, 43%injuries,9%forcedlabor Migration
Notes:1Thisdoesnotincludefarmsthathave18shadetrees,theacceptableshadelevelforseveralcertificationprograms. Source:IndustryDocuments,UnitedNations,WorldBank
CocoaSustainabilityinCtedIvoireAVisionforChange
FSGSocialImpactAdvisors
SituationAssessment
CocoaSectorSustainabilityConditionsAreCurrentlyinaMutually ReinforcingDownwardSpiral
EconomicIssues
Nonewplant Inabilityto materials investinfarms/ coops Unsustainable farmerincome Declining cocoayields &quality
Environmental Issues
Fullsunsystems Lossofbiodiversity exposuretopestsand disease
CocoaSector CycleofDecline
1 Deforestation
Decliningsoilfertility Agingtrees
Farmerslackaccessto healthcaremanycant affordschoolfees Declininginterest incocoafarming Lowavailabilityof increasedmigration socialservices tocities Declining cocoayields &quality Lossofhuman capacityfor farming
Social Issues
Intheabsenceofcorrectiveaction,thesenegativetrendswillaccelerate andthreatenoverallcocoaproductionlevelsandquality
1~90,000Ha/yearattributabletococoafarming3millionhaoftotalrainforestremaininCtedIvoire
CocoaSustainabilityinCtedIvoireAVisionforChange
FSGSocialImpactAdvisors
SituationAssessment
QualityDeclinesAreTangible,ProductionDeclinesAreLikely
CtedIvoireCocoaBeanQuality
12% 20042005 10% 8% 6% 4% 2% 0% 20052006 20062007
Moulds
FFAs
SlatyBeans
TotalCocoaProductioninCtedIvoire 20052020(MetricTons)
2500 2000
ForecastScenarios
1500
1 2 3
1000
500
Source:Industrydata
CocoaSustainabilityinCtedIvoireAVisionforChange
20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20
FSGSocialImpactAdvisors
CtedIvoireCocoaCaseStudy
I. II.
SituationAssessment VisionandStrategies
III. TakingAction&Partnerships
CocoaSustainabilityinCtedIvoireAVisionforChange
10
FSGSocialImpactAdvisors
VisionandStrategies
ANewComprehensiveVisionofCocoaSustainability,SharedbyAll Stakeholders,IsUrgentlyNeededinCtedIvoire
Vision
ARevitalizedCocoaSectorinCtedIvoire
Buildingareliablesupplyofcocoaandimprovingfarmerlivelihoods
Goals
Strategies
Actionshouldprioritizeeconomicissuesastheyunlocktheabilitytomake concurrentimprovementsinenvironmentalandsocialdimensions
CocoaSustainabilityinCtedIvoireAVisionforChange
11
FSGSocialImpactAdvisors
VisionandStrategies
OpportunitiesExistToIncreasetheFarmersShareofFOBCocoaPrices byApproximately40%ThroughTaxReformandQualityInitiatives
PotentialImpactofPriceBasedGains
$3,500
(GainsinUSD)
PriceBasedGains Cocoafarmerscanrealizeupto40% morevaluefortheircocoathrough: QualityPremiumAchieveupto USD$200(premiumreceivedin Ghana),allocatedproportionallyto farmersandsupplychainpartners forqualityandtraceability TaxReformReductionoftotal taxesfrom35%to17.5%with benefitsaccruingproportionally acrossthesupplychain MarketInformationSystemCocoa farmerscanalsoincreasefarmgate pricethroughimprovedmarketpricing information(notyetestimated)
FOBPrice($)/MetricTon
$3,000
487
$2,500
+40%
$1,416
$1,013
$1,131
Current
Farmerprice
1 TotalTaxes
PayforQuality
Tradingmargins& incountrytransport
TaxReform
Exportercosts& localprocessing
OceanFreight
12
FSGSocialImpactAdvisors
VisionandStrategies
VolumeBasedGainsinCombinationwithPricedBasedGainsCan GenerateSignificantNetIncomeImprovements
1 Pricebasedgains produceamodestbutdirectincrease infarmersbottomline(i.e.,requirenoinvestment) 2 Volumebasedgains incombinationwithpricebased gainsgeneratesignificantlymoreincome,butrequireup frontinvestmentbyfarmersinfarminputs
CropYield (kg/ha)
Incomewith qualitypremium
PriceBasedGains (PotentialFamilyNetIncomeImpact)
2000 $7,000 $6,000 1600
VolumeandPriceBasedGains (PotentialFamilyNetIncomeImpact)
2000 1800 1600 1400 $5,000 $7,000 $6,000
CocoaYield (kg)/ha
CocoaYield (kg)/ha
FamilyIncome (USD)
FamilyIncome (USD)
800
Y ea r1 Y ea r Y 3 ea r5 Y ea r7 Y ea r9 Y ea r1 0
13
Y ea r Y 1 ea r 3 Y ea r Y 5 ea r 7 Y ea r9 Y ea r1 0
FSGSocialImpactAdvisors
VisionandStrategies
FourLeveragePointsWillBeCriticaltoRealizingthe GoalsoftheSustainabilityVision
1
PolicyReformwillhelpunderpintheefforttoachievesectorlevelimprovements ineconomic,environmental,andsocialconditions
FurtherResearch&Developmentisnecessaryinseveralkeyimpactareas(e.g., optimalplantmaterial,agroforestrysystems)
LastMileExtensionreferstothedevelopmentofefficientnewmechanismsto efficientlydistributefarminputsandtransferknowledgeatscale
CocoaSustainabilityinCtedIvoireAVisionforChange
14
FSGSocialImpactAdvisors
VisionandStrategies
TheCompletionofSeveralActivitiesWithinEachLeveragePointWill LeadtotheRevitalizationoftheCocoaSectorinCtedIvoire
LeveragePoints
Common Agenda
Policy
3 Research&
Development
4 LastMile
Extension
Economic Strategies
Setfortha visionfor change Garnerearly buyinfrom government, industry,and donors Gainconsensus onalignmentof agriculturaland environmental goals
Increasefarmer Develop shareofFOB improvedplant prices material/genome mapping Increase government Determine fundingforthe economicimpact cocoasector ofcertification& diversification Encourage Determine enforcementof optimal forestprotection agroforestry policies system Demonstrate modelsofsocial serviceprovision Determine impactofrural migration Newknowledge& toolsimproved plantmaterial
Distributeinputs andeducate farmersincrop husbandryand postharvest techniquesat scale Improvefarmer knowledgeon environmentally friendly production Increasefarmer knowledgeof appropriatelabor practices
KeyMeasures ofSuccess
Farmerquality, yieldsand income
Environmental Strategies
Social Strategies
Gainconsensus Advocatefor increased onprioritysocial fundingfor issues socialservices &rural development Collective agendafunding Government engagement
Newextension capacity
IntermediaryMilestones
CocoaSustainabilityinCtedIvoireAVisionforChange
15
FSGSocialImpactAdvisors
CtedIvoireCocoaCaseStudy
I. II.
SituationAssessment VisionandStrategies
III. TakingAction
CocoaSustainabilityinCtedIvoireAVisionforChange
16
FSGSocialImpactAdvisors
TakingAction
Today,aMultitudeofDisconnectedInvestmentsFailtoTransformthe CocoaSectorFromExtensivetoIntensiveandDiversifiedFarming
EconomicInitiatives FarmerProductivity Quality Taxation MarketInformation EnvironmentalInvestments Deforestation FarmingPractices ClimateChange ImprovingLiving Conditions SocialInvestments ResponsibleLabor Practices
SampleofActorsCurrentlyWorkinginCtedIvoiresCocoaSector
Govtof CtedIvoire
CurrenteffortsareinsufficientRevitalizingthecocoasectorwillrequire deeperintegrationofrespectiveeffortsandcompetencies
Note:Organizationwebsites,FSGresearch
CocoaSustainabilityinCtedIvoireAVisionforChange
17
FSGSocialImpactAdvisors
TakingAction
BuildingaCommonAgendaShouldFocusonDefiningLocationSpecific IntegrationofDedicatedEffortswithSectorLevelSupport
ScopeofActionon CertifiedSupplyChains FarmLevelWork Farmerfieldschools Capacitybuildingofpartner coopsandtraitants Certificationandtraceability ofproduced/purchased cocoa Inputprovisionlinkedto trainingandcertification Germplasm,fertilizer, creditasexamples Improvedcommunity supportservices
Exporters and Manufacturers BuildingSupport/DemonstratingSuccessatSectorLevel
Agreementoninterventiontargetsamongkey partners GeographicareaoffocusRoles,responsibilities, reporting,governanceAgreementonkeypartners FormationofSteeringCommittee(multistakeholder) Scaleupcertificationschemesanddeterminebest organizationalapproach(farmercoopsortrading groups)andstrengthenselectedfarmerorganizations (condition:verifiedstandards) TransformationandscaleupofLastMileextension models R&Dinvestmentstoimproveextensionprovision Communityresearch,empowerment&enhancements Supportivepolicyreform&Infrastructural enhancements
CocoaSustainabilityinCtedIvoireAVisionforChange
18
FSGSocialImpactAdvisors
TakingAction
ThereAreManyReasonsToBelieveaCocoaSector TransformationIsPossible
ConditionssupportingCtedIvoireCocoaSectorTransformation Willingandinterestedbeneficiaries
Commonunderstandingofbothsectorchallengesandsolutions
Commitmentandmotivationamongstakeholders
Sectorlevelapproachtakesintoaccountcommercialselfinterest
Realisticacknowledgementofgovernmentandsectorpolicy conditions
Otheragriculturalsectortransformationexamplesexisttodrawfrom
CocoaSustainabilityinCtedIvoireAVisionforChange
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FSGSocialImpactAdvisors