Contract-Farming in Cocoa Value Chains in Africa: Possibilities and Challenges

23 Pages Posted: 10 Feb 2019

See all articles by Lindsey Callahan

Lindsey Callahan

University of Washington, School of Law, Students

Date Written: June 1, 2018

Abstract

The cocoa industry is a global multi-billion dollar industry that faces numerous challenges at the farm level. Cocoa is largely grown on smallholder farms in equatorial Africa, which face poverty, declining productivity, volatile prices and lack of funding for investment, as well as human rights and environmental issues. Contract-farming is a value chain model that has been proposed to address many of the challenges faced by cocoa farmers. This paper provides an overview of the cocoa industry, including past and current initiatives to address issues and inequities in the cocoa market, and an overview of current research on contract-farming of cocoa, including an examination of three chocolate companies that source cocoa in Africa using a contract-farming business model: Theo Chocolate (Democratic Republic of Congo), Divine Chocolate (Ghana), and Mad├ęcasse (Madagascar). This research finds that contract-farming does offer cocoa farmers the opportunity to receive a higher price point for cocoa, and is more beneficial than industry sustainability programs. There are significant gaps in the research into contract-farming, however, and it is not clear how contract-farming impacts sustainable economic development in the longer term, even when farmers obtain a higher price point for cocoa. Contract-farming may increase risks associated with land tenure insecurity, marginalization of women, and crop monoculture; however, contract-farming can be carried out in a way that mitigates these risks.

Keywords: contract-farming, cocoa, chocolate

Suggested Citation

Callahan, Lindsey, Contract-Farming in Cocoa Value Chains in Africa: Possibilities and Challenges (June 1, 2018). Available at SSRN: https://ssrn.com/abstract=3325432 or http://dx.doi.org/10.2139/ssrn.3325432

Lindsey Callahan (Contact Author)

University of Washington, School of Law, Students ( email )

William H. Gates Hall
Box 353020
Seattle, WA 98105-3020
United States

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