Smallholder Cocoa Production Struggles to Feed Producers and Meet Global Demand
Almost 90 percent of the world’s cocoa originates from smallholder producers farming less than five hectares of land. Farmers face considerable challenges to maximize their yields, including changing weather patterns, disease, aging trees and limited access to improved varieties, inputs and technical assistance.
As a result they are earning on average less than 10 percent of the international price per pound. Yet as global demand for cocoa outpaces supply, there are opportunities for smallholder farmers to benefit from increased incomes through improved cocoa production and sustainability.
Climate Smart Agricultural Value Chains
LWR works with smallholder cocoa producers in Latin America, the Caribbean and Asia to increase incomes and improve livelihoods by optimizing opportunities presented in the cocoa market. With more than a decade of experience in cocoa, LWR uses a climate smart agricultural value chain approach to improve access to inputs, technical resources and capacity, postharvest processing and export market access, while promoting environmentally responsible and sustainable management of cocoa crops through agroforestry. In doing so, farmers produce more while preserving the land’s fertility and biodiversity for future generations, fulfilling a triple bottom line of people, profit and planet. LWR’s investments leverage private sector support, as well as government and foundation grants, to expand LWR’s impact in the cocoa sector.
Ground Up: The LWR Coffee and Cocoa Initiative
The global coffee and cocoa markets are worth more than $175 billion per year combined. But smallholder producers capture just a fraction of that value. With expertise developed over decades, LWR brings a unique perspective and skill set to improve producers’ lives, from the ground up.
Read more about Ground Up: The LWR coffee and cocoa initiative.
Access to Inputs
Access to inputs is critical to producers’ success. LWR supports cocoa farmers to access inputs through their cooperatives and associations at wholesale prices and through the creation of nurseries. Cooperatives’ internal credit systems also allow farmers to access necessary inputs for their production.
Technical Resources and Capacity
LWR promotes environmentally responsible cocoa crop husbandry in its technical and extension support including disease control, shade management and repopulation in an agroforestry system. LWR’s focus on agroforestry systems offers concrete reforestation and climate change adaptation solutions, while encouraging farmers to intersperse food crops with cocoa plants for increased food security. Producers, in turn, reap the benefits of increased yields and healthy soil and trees, which can produce cocoa pods for more than 10 years.
LWR works with cocoa producers to improve postharvest processing techniques and infrastructure. Better fermentation, drying practices and infrastructure (like drying tunnels, drying ovens and fermentation boxes) also help improve cocoa quality. Efforts to increase traceability, establish quality control systems, and train tasters at origin also contribute to increased efficiency and cocoa quality among LWR’s partner organizations.
Export Market Access
LWR promotes producer engagement with international markets by supporting smallholder farmers to secure third party certification by certifying agencies including Fair Trade USA, Rainforest Alliance, UTZ Certified, Fairtrade International (FLO) and others.
Strategic alliances with key industry players also benefit cocoa farmers’ sales and incomes at a grassroots level. Purchase agreements have been secured between LWR partners and buyers such as RITTER SPORT and Ecom Agroindustrial Corp. Ltd. LWR has leveraged relationships to convene national-level cocoa fora in a number of countries and promoted cocoa quality through competitions using Cocoa of Excellence’s standards. We link producers to companies and organizations that provide technical expertise and assistance in production and processing, sample analysis and interactive feedback, including The Hershey Company and CATIE (Centro Agronómico Tropical de Investigación y Enseñanza), among others.
With the generous support from the U.S. Department of State, LWR’s Pathways to Prosperity project combines proven tools and innovative approaches to foster connections between smallholder cocoa producers and markets in El Salvador, Honduras and Nicaragua. Through this project, nearly 1,000 farmers will improve their production, internal control and traceability systems, and access to markets. National and regional cocoa forums will also connect farmers with value chain actors.
Sustainable Cocoa Farming
LWR remains committed to increasing cocoa producers’ ability to both feed a global market and put food on their own tables. LWR engages men and women, adults and young people alike, by providing tailored services and promoting gender and age integration in cooperative membership and leadership. Additionally, LWR’s innovative programs aim to utilize renewable energy sources for cocoa production and processing, as a means to improve smallholder farmers’ lives and mitigate negative environmental impacts of agricultural production.