GIZ calls for strengthening cocoa production in deforestation-free supply chains

Cocoa farming is maintained world-wide by smallholders. In order to stem the environmental impact of deforestation through agriculture and livestock farming, the European Union has adopted a Regulation on Deforestation-free Products which also refers to cocoa farming. GIZ is supporting producers in making their deforestation-free cocoa traceable and visible in transnational supply chains.

Who hasn’t already experienced this? Walking down the supermarket aisles, we are personally confronted with the global challenges. Chocolate bars advertise forest conservation, and packs of coffee emphasise that workers are well-paid. For a long time, such voluntary certification initiatives launched by the private sector, and often run in cooperation with non-governmental organisations, were regarded as a key solution to securing human rights and environmental protection in widely ramified transnational supply chains. 

With regulations such as Germany’s Supply Chain Act, applying since 2023, and the EU Regulation on Deforestation-free Products (EUDR), which enters into force on the 30th December 2024, legislators have gone one step further to effectively counter the negative impacts of international trade and consumption in the Global North. 

The EUDR addresses a critical aspect: the environmental impact of deforestation on agriculture and livestock farming. As borne out by a UN Food and Agriculture Organization report in 2022, above all in countries of the Global South, deforestation accounts for a major share of greenhouse gas emissions. In the same year, scientists, among them some from the German Centre for Geosciences (GFZ), demonstrated in the specialist journal Science that at least 90 per cent of all logging in tropical regions was caused by expanding agriculture and livestock farming. But many of the products for which forests are destroyed are produced for markets in the Global North. Thus the EUDR stops imports of cocoa, coffee, soy, palm oil, rubber, timber and beef which have contributed to deforestation since the 31st December 2020.

Cocoa farming is maintained world-wide by smallholders. Although proving that cocoa is deforestation-free is the duty of the import businesses and organisations within the framework of the EUDR, along the supply chain, producers are facing the challenge to have their cocoa registered as deforestation-free.

The Open Cocoa Chain innovation Project
 

This is where the innovation project Open Cocoa Chain comes in, which the Fund for the Promotion of Innovation in Agriculture (i4Ag) is implementing in Columbia and Peru in cooperation with Colombia’s National Federation of Cacao Growers (FEDECACAO) and Helvetas Swiss Intercooperation. The aim is to support cacao producers in making their deforestation-free and climate-friendly cocoa visible in the transnational supply chains and thus strengthen their market position. 

The Open Cocoa Chain applies a digital, interoperable approach which enables the traceability of traded cocoa via a block-chain. Additionally, gender equality training in business decision-making processes and peer-to-peer mentoring, as well as other measures, are provided to boost the role of women in sustainable cocoa growing. 

Interoperability of the solution is based on being able to feed data on zero forestation and on climate-friendly growing practices into a block-chain via already existing apps and farm management systems. At the same time, two apps are being developed for smallholdings in the framework of the project. The block-chain secures data transparency along the supply chain, thus enabling importers to verify that traded cocoa is deforestation-free. 

A successful piloting of the Open Cocoa Chain confirms that the distribution of interoperable solutions promotes the flexibility and independence of farmers. For interoperable approaches are a low-threshold alternative to traceability solutions which are owned by the supply chain actors. Nevertheless, growing cocoa for exports does not guarantee a secure livelihood.

Income earned by most of the cocoa producers is not sufficient to lead a life without poverty. Germany’s Fairtrade Foundation points out that on a global average, cocoa growers receive a mere six per cent of the sales price of a chocolate bar. Premium prices for deforestation-free and climate-friendly cocoa and agreements on income to secure a livelihood can represent instruments for a forward-looking cocoa industry.

Technical innovations can be employed as an important element among a wide range of measures in international cooperation in order to improve more deep-lying structural conditions of inequality. At the same time, among others, land rights, access to financial services to finance sustainable agriculture and the promotion of cooperatives represent further central aspects to set out from in order to boost farmers’ sovereignty in international agricultural trade. 

Author: Jerome Scheuren, Fund for the Promotion of Innovation in Agriculture (i4Ag), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Germany, contact: jerome.scheuren@giz.de 

Further information:

Greenhouse gas emissions from agrifood systems Global, regional and country trends, 2000–2020. FAOSTAT Analytical Brief 50, FAO.

Pendrill, F. et al. 2022: Disentangling the numbers behind agriculture-driven tropical deforestation. Science 377(6611).