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Combating Deforestation through Sustainable Cocoa Production in Ghana and Ivory Coast

Deforestation is a risk to the productivity of our raw material supply chains because of its contribution to global climate change as well as its impact on local weather patterns and ecosystem services in affected areas.

As deforestation persists, the planet’s capacity to absorb carbon pollution diminishes and more carbon is being released; tree cover loss in tropical forests accounts for about 16 to 33 percent of global emissions. In developing countries, deforestation and forest degradation, primarily accounts for some 18% of global carbon dioxide emissions.

Reducing these has been identified as a potential strategy for achieving
global emission reduction targets in a fast and cost-effective manner. Tropical forests have been one of Earth’s best defenses against rising carbon dioxide levels.

The trees suck carbon from the atmosphere as they grow, and researchers estimate that, despite ongoing deforestation, tropical forests hold more carbon than humanity has emitted over the past 30 years by burning coal, oil, and natural gas. But scientists have worried that the ability of tropical forests to act as carbon sinks will diminish and ultimately reverse with continued global warming, as trees stressed by heat and drought die and release their carbon.

The Upper Guinean Forest of West Africa is one of only three forested biodiversity hotspots in Africa. Until the end of the 19th century it covered most of Sierra Leone, Liberia, South-East Guinea, Southern Ivory Coast and South-West Ghana, but less than a fifth of this rainforest remains today.

The cocoa farming climate change relationship goes both ways: In addition to cocoa-related deforestation increasing emissions, countries where cocoa is produced are already seeing the effects of climate change, and these changes are affecting cocoa production. In Ghana, higher temperatures and lower precipitation are changing the places where cocoa is produced. These trends will worsen unless decisive action is taken to limit climate change.

Today, between them, Ghana and Ivory Coast produce nearly two-thirds of the global supply of cocoa, the main ingredient in a chocolate industry worth more than $100bn a year in sales. Some entrepreneurs have tried to make chocolate in Ghana. But most have hit problems.

The cocoa industry continues to exploit both forests and communities of West Africa for cocoa that is sold for large quantities of cheap, environmentally unsustainable cocoa beans. The low price of cocoa is costing us dearly here in Côte d’Ivoire in terms of deforestation and abuses of human rights.

Several reports note that about half of the world cocoa market is controlled by just three companies: Cargill, Olam, and Barry Callebaut. The investigation traced how cocoa makes its way from growers in national parks, through middlemen, to these traders, who then sell it onto Europe and the United States where the world’s largest chocolate companies make it into truffles, bars, syrups, and myriad other chocolate treats.

Ghana supplies about one-fifth of all cocoa beans, for which it earns about $2bn a year, less than one-fiftieth of the value of the chocolate that is manufactured, branded and sold. Nana Akufo-Addo, Ghana’s president, says his country is locked in a colonial-style relationship with the world’s chocolate manufacturers in which it provides raw materials only to import finished goods.

While deforestation is one of the biggest problems with cocoa farming, some areas have been impacted a lot more than others. For instance, in Cote d’ Ivoire, better-known as the Ivory Coast, forest cover went from 12 million hectares to less than 3 million from 1960 to 2017.

In contrast, Ghana and Ivory coast, which have high electricity costs and where little chocolate is eaten, have found it hard to wrest a greater share of profits from an industry that keeps most of the added value near the western consumer markets it serves.

Ivory Coast’s cocoa production has nearly doubled to 2m tonnes over the past decade as farmers clear new forest land. In July 2019, Ghana and Ivory Coast unilaterally announced a fixed premium of $400 a tonne over the benchmark futures price from October 2020.

Ghana has seen quite a big impact from cocoa farming as well. Specifically, “agricultural encroachment largely driven by cocoa has increased almost ten-fold since 2010,” a Mighty Earth briefing paper reads.

Based on the World Resources Institute Climate Analysis Indicator Tool (WRI CAIT), Ghana’s GHG profile is dominated by emissions from the land-use change and forestry (LUCF) sector, 53% of Ghana’s total emissions, which is driven by changes in forest land. In Ghana, forest degradation and deforestation are driven primarily by cocoa farm expansion, coupled with logging and a recent increase in illegal mining.

With cocoa as the dominant industry in Ghana, it doubles as the primary driver of forest loss. This reality has been exacerbated by recent increases in the logging industry and illegal mining, according to the World Bank.

Cocoa has been grown illegally in many forest reserves for decades, and it is not feasible to evacuate hundreds of thousands of people who have settled in these areas. Fully one third of all the existential threats to animal species are directly attributable to rich-country demand for such goods as coffee, beef, tea, sugar and palm oil.

Various assessment indicate that deforestation within our supply chain represents the largest single contributor to our end-to-end carbon footprint. The size of a cooperative is correlated with the average distance travelled by cacao: larger cooperatives source cacao from larger areas.

In reality, the distance between producers and coops is likely linked to several factors, including topography, road access, and buying price. Such factors are important to consider when determining the area of deforestation risk. For instance, a large river between a cocoa producer and a coop could prevent deforestation-tainted cocoa from being sold to the closest cooperative, resulting in this problematic cocoa being sold to a more geographically remote cooperative. Due to the complexity of the supply chain, a larger number of members does not necessarily indicate a larger cocoa area, and consequently, deforestation risk.

Farmers experience direct losses in the form of crop damages as a result of timber extraction, and are not officially rewarded for their nurture of timber trees. Accordingly, famers may well perceive their problems as temporary and to disappear when the trees are gone.

They may, or may not, perceive the problem along ecological lines. They undercut the political and administrative elite’s control over the timber resource by engaging with illegal chainsaw operators or by deliberately destroying timber trees from farm land.

Their livelihoods are largely dependent on food and cash crops, not timber trees, and the potential benefits from a share of revenue and further tree rights may be perceived by the individual to be fairly marginal. In combination with low political power at the national arena, this may explain why farmers have not organised common responses or actions.

The average (urban) Ghanaian citizen may not perceive the
situation as a problem. He still has easy access to affordable chainsaw lumber and other wood products. He may, or may not, experience or perceive environmental problems, but even if he does, he may not necessarily associate them with deforestation and forest degradation.

Moreover, in his capacity of taxpayer and voter, he is unlikely to be aware of the loss of natural capital associated with the political
timber economy. In relation to the latter, the complexity of forestry issues, for instance, harvesting rules, taxation regime and benefit sharing, may help explaining why NGOs and other advocacy groups face difficulties in bringing forestry issues to the attention of the general public, in the media, except as isolated cases. The complexity may also function as a constraint for NGOs and advocacy groups, who may not possess sufficient analytical and technical skills to analyse the situation and present a clear case.

Improving the sustainability of cocoa will require a substantial overhaul of the current system. The National Plan for Côte d’Ivoire builds on the government strategy adopted in May 2018. Key strategic priorities include passage of the new Forest Code; creation of a National Forest Preservation and Rehabilitation Fund; development and implementation of the national cocoa traceability system; and implementation of pilot projects in five priority regions.

The National Plan for Ghana leverages the Ghana Cocoa Forest REDD+ Programme to reduce greenhouse gas emissions from deforestation significantly and to enhance carbon stocks through sustainable forest management. Priority actions include scaling up landscape approaches to end forest degradation in six Hotspot Intervention Areas, improving cocoa yields through adoption of climate-smart practices, and strengthening supply chain mapping.

Both Côte d’Ivoire and Ghana are introducing a differentiated approach for improved management of forest reserves, based on the level of degradation of forests. Up-to-date maps on forest cover and land use, socio-economic data on cocoa farmers, and detailed operational guidelines covering forest management and land use are being developed and will be publicly disclosed.

The Global Shea Alliance (GSA) and Food and Agriculture Organization of the United Nations (FAO Regional Office for Africa), released a study which underscores the shea tree’s potential to mitigate climate change in West Africa.

The study found that, at present, the shea value chain fixes 1.5 million tons of CO2 every year in West Africa.

Relative to production volumes, every ton of shea kernel produced has a negative carbon footprint of 1.04 tons of CO2. According to study, increasing the tree population by 7 million trees per year over 14 years raises the CO2 fixed to about 9 million tons per year, leading to an aggregated carbon fixing impact of 180 million tons of CO2e over 20 years. The net present value of this investment is $1.9 billion, resulting in an internal rate of return of over 100% when accounting for both public and private investments.

International financial and market incentives also have a role to play. The governments should focus on preventing forest burning, increasing monitoring and enforcement to stop encroachment while providing the poor with alternatives to forest exploitation.

Moreover, it’s too soon to attribute causality, the downturn in primary forest loss in Ghana and Ivory Coast compared to 2018 could signal the effectiveness of corporate efforts to get deforestation out of commodity supply chains when linked to government programs, sometimes known as the jurisdictional approach to sustainable land use.

It was in early 2019 that dozens of companies accounting for 85 percent of world’s use of cocoa announced how they were aligning their efforts with the national implementation plans of the two countries under the Cocoa & Forests Initiative. The accumulating evidence of what does and does not work to slow forest loss leaves no room for excuses for our collective failure to meet the goals of the New York Declaration on Forests.

Satellite monitoring systems now give us the information to get ahead of the problem by working at its source: on the frontiers of endangered forests. There, working in tandem with cocoa farmers, local communities, forest owners, companies and governments, we can develop solutions that protect forests, while, crucially, ensuring decent livelihoods for local communities.

Deforestation and social issues such as the grinding poverty that many cocoa farmers live under and the use of child labor go hand in hand. To fight one, you have to address the other. One way to do this, and strengthen cocoa farmers’ resilience, is agroforestry: planting trees or shrubs on, around, and among cocoa plantations.

Major brands have adopted the agroforestry model to eliminate deforestation from their supply chains. However, since many companies investing in this model have not prioritized conserving existing forests, it’s no surprise it has not succeeded, although it has brought other benefits, including preventing soil erosion and improving fertility.

While agroforestry models, and finding ways to increase the productivity of small farms is a start including supporting farmers to diversify their crops so they have other sources of income to compensate the volatility of the cocoa price it isn’t enough.

Companies and governments have begun to translate plans into action on the ground, with strong support from the World Bank, the UK’s Department for International Development, the German Federal Ministry of Economic Cooperation and Development and other partners. Key steps include:

  • Government collection of land use and socio-economic surveys in priority areas to collect baseline data for the design of new agroforestry and conservation programmes
  • Development of farm mapping and traceability systems to ensure cocoa is sourced legally from farms outside protected areas
  • Development of new landscape corridors and community-based landscape management to connect up fragmented forest reserves and develop landscape governance systems, aligned with Tropical Forest Alliance 2020 efforts
  • Investments in sustainable agricultural intensification in order to “grow more cocoa on less land”, with a focus on climate-smart production techniques; farmer training; land and tree tenure reforms; increased access to financing; and new agro-forestry models
  • Launch of payments for environmental services contracts directly with farmers
  • Use of satellite monitoring to track illegal deforestation in hotspot areas and to issue deforestation alerts

Planting trees not only captures carbon but also helps rebuild forests and communities, protect threatened and endangered biodiversity, promote soil nutrients, and conserve water all of which help increase the resilience of farmers.

In March 2019, Côte d’Ivoire (Ivory Coast), Ghana, and several major chocolate and cocoa companies released action plans to end deforestation under the Cocoa & Forests Initiative, which launched in November 2017 at the UN Climate Change Conference in Bonn, Germany. Mars, Mondelēz, Olam, and Nestlé were among the companies to establish zero deforestation policies for their supply chains.

Nestlé said it’s had mapped, using GPS co-ordinates, 75% of the 120,000 cocoa farms it sources from directly in Ivory Coast and Ghana, which produce some two thirds of the world’s cocoa. It found around 3,700 farms in protected forests in the process of mapping, and removed them from its supply chain.

The company sources nearly 80% of its cocoa directly in Ivory Coast and Ghana and expects to finish mapping its direct supply chain by October. It aims to have 100% sustainable cocoa sourcing in its confectionary products by 2025.

Ghana in July 2020, joined a World Bank initiative that promises nations up to $50 million over 5 years for reductions in the carbon-dioxide emissions caused by deforestation. The nation, along with Côte d’Ivoire and Colombia, also belongs to the Cocoa and Forests Initiative, a partnership with at least 35 companies that together use 85% of the world’s cocoa. The program, founded in 2017, created a forum and guidelines for countries, companies and farmers to retool supply chains so that development and conservation aren’t at odds.

As part of the pact, each nation has signed off on plans to bring both jobs and sustainable agriculture practices to poor communities by 2022. Companies, including Nestle SA, Unilever NV and The Hershey Company, have pledged to root out deforestation in their supply chains and help regrow forests where possible.

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