DRAFT
CARE INTERNATIONAL
COCOA LIVELIHOODS EMPOWERMENT PROGRAMME (CLEP)
PROGRAMME DOCUMENT
CARE International in Ghana
PROGRAMME PERIOD: 2010 - 2025
DRAFT
TABLE OF CONTENTS
1
DRAFT
1 Cocoa Production and Poverty in Ghana...... 4
2 CARE Ghana’s Mission and Vision for the CLEP of Ghana ...... 4
3 Situational Analysis...... 5
3.1 Historical Context of Ghana’s Cocoa...... 5
3.2 Actors in Ghana’s Cocoa Value Chain...... 6
3.2.1 COCOBOD...... 6
3.2.2 Licensed Buying Companies...... 7
3.2.3 Landowners...... 7
3.2.4 Sharecroppers ...... 7
3.2.5 Caretakers ...... 7
3.3 Vulnerability of Households in Cocoa Growing Areas...... 8
3.3.1 Global Cocoa Market and Cocoa Substitutes...... 8
3.3.2 Climate change/variability...... 8
3.4 Underlying Causes of Poverty...... 8
3.4.1 Land Tenure System...... 8
3.4.2 Borrowing of Funds...... 9
3.4.3 Lack of Extension Training and Education...... 9
3.4.4 Large Household Size...... 9
4 What’s the Impact Goal of the CLEP Program?...... 10
5 Who are the CLEP Beneficiaries? - Impact Groups and Priority Impact Groups.....10
6 Building Capacity for Change – the CLEP Target Groups...... 10
7 What Will a Transformed CGA Look Like? - The CLEP Theory of Change...... 11
7.1 Socio-cultural Beliefs Excluding People’s Access to Resources ...... 11
7.2 Advocacy for Accountability and Effective Resource Allocation...... 11
7.3 Improved Incomes, Livelihood Opportunities, and Social Services...... 11
8 How Will This Change be Realized? - The Pathways of Change...... 12
9 CLEP Breakthroughs – Indicators of Change...... 14
10 CARE’s Current Initiatives and Impact Measurement...... 15
11 Funding Strategy for the CLEP...... 17
12 Alliance Building Opportunities with CARE...... 17
13 CARE Ghana’s Core Competencies and Expertise Relative to the CLEP...... 17
14 Programming Principles of CARE...... 18
14.1 Rights-Based Approach ...... 18
14.2 Working with Partners and Other Stakeholders...... 18
14.3 Advocacy and Engagement in Policy-Making and Implementation...... 18
14.4 Gender and Diversity...... 19
14.5 Disaster Risk Reduction and Conflict Prevention...... 19
14.6 HIV AIDS mainstreaming...... 19
14.7 Starting with the End in Mind - Exit Strategies and Sustainability...... 20
15 The CLEP’s Learning, Monitoring, and Evaluation Strategy...... 20
15.1 Learning, Documentation, and Communication Strategy ...... 20
15.2 Social and Organizational Learning...... 20
15.3 Impact measurement and knowledge systems...... 20
16 Sources...... 21
17 ANNEX...... 23
17.1 Unifying Framework for Poverty Eradication and Social Justice...... 24
1
DRAFT
Acronyms
AEAAgriculture Extension Agent
AFSPAgriculture and Food Security Program
CBLACommunity Based Land Agreement
CBOsCommunity Based Organizations
CGACocoa Growing Areas
CMCCocoa Marketing Company
CRIGCocoa Research Institute
CICARE International
CGACocoa Growing Areas
CLEPCocoa Livelihoods Empowerment Programme
COCOBODCocoa Board of Ghana
CSOsCivil Society Organizations
CSRCorporate Social Responsibility
DADistrict Assembly
DRRDisaster Risk Reduction
FOB Free on board
GLSSGhana Living Standards Survey
GOGGovernment of Ghana
IGImpact Group
LBCLicensed Buying Company
LCFLocal Cocoa Facilitator
M&EMonitoring and Evaluation
MDGMillennium Development Goals
MDIMillennium Development Indicators
MMYEMinistry of Manpower, Youth, and Empowerment
MOFAMinistry of Agriculture
NGOsNon-Governmental Organizations
PBCProduce Buying Company
PECCNPoverty, Environment, and Climate Change Network
PIGPriority Impact Group
PLWHAPeople Living With HIV/AIDS
PQIProgramme Quality and Impact
RBARights Based Approach
STCPSustainable Tree Crops Program
VS&LVillage Savings and Loan
WFPWorld Food Programme
1Cocoa Production and Poverty in Ghana
Ghana’s foreign exchange earnings - excluding anticipated production of oil in late 2010 - are largely dependent upon three traditional export commodities – gold, timber, and cocoa[1]. Cocoa and gold accounting for 71% of Ghana’s exports of goods in 2008[2]. Cocoa contributed over $1.5 billion to total foreign exchange earnings in 2008[3]
Cocoa production accounts for about 10% of agricultural production in Ghana, but contributed about 30% to its GDP growth during 2001-05 because of rapid yield growth. Cocoa production nearly doubled between 2000 and 2006, reaching 740,000 MT, but falling to 650,000 MT in 2007 in part because of poor weather[4]. Production in 2008/09 fell again to 507,000 MT. Cocoa in Ghana is grown on more than one million small farms averaging about 3 ha concentrated in the southern regions of the country. This smallholder production is high labour intensive involving tree felling for land preparation, slashing of vegetative cover, brush burning, seed/seedling sowing, weeding, insecticide/fertilizer application, and harvesting/post processing of beans[5].
In 2005-06, only 24% of cocoa farmers were poor, compared to 39% for rural areas. Cocoa farmers have benefited from higher yields and higher international prices and are receiving an increasing share of these prices, yet they remain vulnerable to changes in international cocoa prices and export volumes. A 2009 WFP report states that “a decrease of 100 (new Ghana) cedis in the producer cocoa price would increase poverty as measured by the WFP by about 15 percentage points[6]”.
2CARE Ghana’s Mission and Vision for the CLEP of Ghana
CARE Ghana’s vision, mission, and strategic plan is to work with its partners to support the poor, vulnerable, and marginalized to enable them to lift themselves out of poverty and realize their potentials. The Cocoa Livelihoods Programme will focus on improving the development of the poor, vulnerable, and marginalized farming households in the Cocoa Growing Areas (CGA) of Ghana. The CGA is composed of the following: the Ashanti, Brong-Ahafo, Central, Eastern, Volta, and Western regions.
The focus of programming in the CGA will be:
Strengthening the capacity of households and communities to meet their livelihood needs - which are cocoa and climate dependent - and make their livelihoods more resilient to production risks.
Address the needs of the poor and vulnerable – specifically caretakers.
Creating an enabling environment for greater participation in the development process among the different actors in the cocoa value chain.
Advocating among cocoa communities for improved savings models (e.g. VS&L) and across financial institutions for more responsive financial schemes for farmers.
Advocating for more transparency and equity in land tenure agreements between landowners and landless caretakers and sharecroppers.
3Situational Analysis
3.1Historical Context of Ghana’s Cocoa
Ghana’s cocoa industry has a history of almost 200 years. Key points in this history are outlined below:
In 1815 Tetteh Quarshie, brought the first cocoa pods to Ghana from Fernando Po and began cultivating cocoa in the Eastern Region.
1940s - The center of production shifts away from the Eastern Region to the Ashanti Region where new fields were created in part to avoid infestation by the cocoa swollen shoot virus.
1947 – The Cocoa Marketing Company (CMC) Ltd was established in the UK to control sale of the Ghana’s cocoa on the London market. Even today, the London market is where all the West African cocoa is traded.
1964 - The original Amelonado varieties of cocoa are crossed with an Amazonian variety to produce a high-yielding hybrid cocoa which has been the main planting material ever since[7].
1984 – COCOBOD formed. GOG takes on more investment in cocoa industry.
1985 – The average age of cocoa farmer was 60-65 years old. The early 80’s were marked by decreased productivity due to age. Lack of new planting materials meant rehabilitation of old farms impossible as old planting materials susceptible to most disease and pests. These factors prompted the Cocoa Research Institute of Ghana to provide new planting material.
1992 to 1993 – Ghana adopts liberalization of its internal market. More buying companies appear. Today, there are about 19 LBCs in operation with the Produce Buying Company (PBC) – a former state owned company - holding 30-40% of the market share.
West Africa leads the world in cocoa production (about 70%), and Ghana is the second largest producer of cocoa globally after Cote d’Ivoire[8]. Ghana’s cocoa production by region is presented below.
Table 1. Cocoa production in Ghana by region.
Region / Cocoa Production (MT)* / Households cultivating cocoa**Western / 304,236 / 60%
Ashanti / 80,168 / 20%
Eastern / 51,395 / 20%
Brong Ahafo / 50,353 / 17%
Central / 37,712 / 18%
Volta / 1,223 / 4%
* 2004/2005 Purchases at week 33 (COCOBOD Research Depart)
** Comprehensive Food Security and Vulnerability Analysis 2009 (WFP)
Historically, cocoa has been exported almost exclusively in raw form from Ghana – i.e. beans. Recently, however, more processing has been happening within the country. Processors grind and process the beans into cocoa butter (mainly for cosmetic industries), liquor (chocolate manufacturers), or powder (for food, drink, and baked goods industries).
Over the past decade or so, trade in cocoa on the world market has been consolidated amongst four major chocolate multinationals: Nestle, Mars, Kraft (formerly Cadbury), and Hershey. These chocolate manufacturers work closely with multinational agribusiness companies (e.g. Callebut, Cargill, ADM, and ED&F Man) who process raw cocoa beans as smaller ‘grinders’ and processors have been outcompeted in the global chocolate industry[9].
3.2Actors in Ghana’s Cocoa Value Chain
3.2.1COCOBOD
Ghana’s Cocoa Board (COCOBOD) is the national agency responsible for the development of the industry. To date, and despite pressure from the IMF and other multilateral donor organizations, Ghana has maintained its state involvement in the sales and quality control of its cocoa. COCOBOD’s main roles in the sector include:
Encourage the production of cocoa, coffee and sheanut
Initiate programmes aimed at controlling pests and diseases of cocoa, coffee and sheanut.
Undertake and encourage the processing of cocoa, coffee, sheanut and cocoa waste with the aim of adding value for export and local consumption.
Undertake, promote and encourage scientific research aimed at improving the quality of cocoa, coffee, sheanut and other tropical crops.
Regulate the internal marketing of cocoa, coffee and sheanut
Secure the most favorable arrangements for the purchase, grading and sealing, certification, sale and export of cocoa, coffee and sheanut
Purchase, market and export cocoa and cocoa products produced in Ghana which is graded under the Cocoa Industry (Regulations) (Consolidation) Decree, 1968 NLCD 278, or any other enactment as suitable for export
Assist in the development of the cocoa, coffee and sheanut industries of Ghana.[10]
3.2.2Licensed Buying Companies
Licensed buying companies (LBC) are the internal bulk buyers of cocoa. Their role in the cocoa value chain is to mobilize cocoa collection, provide preliminary screening of cocoa, and act as information points for the buying of cocoa according to COCOBOD policies. Increasingly, LBCs have been providing some extension services to cocoa farmers and it is anticipated that they will continue to support cocoa development.
3.2.3Landowners
Landowners – as the term suggests – are those with rights to the land. They could be indigenous/outsider residents or indigenous/outsider absentee landowners. In most areas of the CGA, land ownership is controlled by traditional authorities (chiefs, family heads, etc).
3.2.4Sharecroppers
Sharecroppers are those cocoa farmers who enter into “abunu” (and sometimes “abusa”) agreements and have livelihoods that are vulnerable to and dependent upon agriculture. Cocoa farming - through abunu - is often pursued as a means for these farmers to gain access to land for food crop farming (i.e. food security).
Abunu agreements involve the sharecropper assuming all the investment start-up costs (i.e. clearing the land, planting cocoa, etc). Once the cocoa begins bearing pods - and usually based upon a verbal agreement - the landowner and sharecropper will divide the farm with each party taking ownership of half the acreage (e.g. generally after 8 years). At this point the sharecropper becomes a landowner so long as the cocoa trees are alive.
3.2.5Caretakers
Caretakers are mainly migrants from one of the three northern regions of Ghana whose livelihood is dependent upon cocoa production. They typically work for absentee landowners who have already invested in the development of their cocoa farms. Their livelihood is dependent upon cocoa production, and they are the poorest and most vulnerable with little access to land or other social infrastructure.
They most often work the cocoa farm based upon an “abusa” agreement whereby at harvest of the cocoa the profits are divided with the landowner getting two-thirds and the caretaker getting one-third. Included in this agreement, the caretaker must pay an initial fee ranging anywhere from GHC400 – 1000 for use of land[11].. Most caretakers seek out “by day” labour – farm labour on a daily basis outside their cocoa farms – as a coping strategy for additional income. Wages for this work range from 3 to 3.5 GHC per day, but this work is periodic and infrequent. As a result, caretakers are vulnerable to many livelihood threats and often borrow from informal lenders at interest rates of nearly 100%. As one farmer described the situation, “…if you take GHC 100 you pay back GHC 200”[12]
A common problem with both the “abunu” and “abusa” agreements is that upon harvest of the cocoa produce, the landowners often leave no money to reinvest in inputs to increase farm productivity. In the end, the sharecropper must use part of his earnings from the sharecropping agreement to maintain the farm[13].
3.3Vulnerability of Households in Cocoa Growing Areas
3.3.1Global Cocoa Market and Cocoa Substitutes
Bulk cocoa bean trade accounts for about 95% of the world market and bulk supplies (and thus prices) are mainly determined by delays in planting and harvesting, weather variability, and disease and pest. World market changes in cocoa price does affect producer prices in Ghana, but the involvement of the COCOBOD acts as a buffer to these price fluctuations (e.g. offering guaranteed prices and ~70% of fob price). This has been identified as a protective measure for farmers from the worst consequences of price vulnerability[14], but others authors note that price volatility (e.g. 2002 record low prices) still make farmers vulnerable to global prices[15]. The acceptance of 5% cocoa butter substitutes in confectioners – adopted by the EU in 2000 – may positively (from greater market penetration due to greater resistance to heat/melting) or negatively (substitution) impact cocoa prices. Emerging markets for Fair Trade certified cocoa may be a niche that can improve household incomes and reduce vulnerability[16].
3.3.2Climate change/variability
Climate change is increasingly becoming an issue affecting the vulnerability of Ghana’s agriculture. More variable rainfall patterns are an anticipated outcome from climate change. Cocoa production shows some responsiveness to this variability. In Ghana, cocoa production nearly doubled between 2000 and 2006, reaching 740,000 MT, but falling to 650,000 MT in 2007 in part because of poor weather[17].
3.4Underlying Causes of Poverty
3.4.1Land Tenure System
Ghana’s cocoa is produced by smallholding farms – on average less than 3 ha in size[18]. Land for cocoa farming is scarce in some parts of Ghana (e.g. Western Region) and absence of land and capital are significant barriers to entry for many poor farmers seeking to work or expand in cocoa[19]. Many farmers do not own the land they farm, they practice sharecropping or caretaking to gain access to land. Thus, the bulk of the labor force for Ghana’s cocoa lack land ownership and incentives to improve the farms. This limits both Ghana’s cocoa production and perpetuates a two-class system.
3.4.2Borrowing of Funds
In a study conducted by the MMYE, farmers have cited lack of credit and farming inputs as their main limitation to expanding or continue cocoa farming[20]. The enabling environment for farmers to access loans from a formal source with fair levels of interest is largely unavailable. As a result, farmers borrow at a very high interest rate from informal sources to cope. The farmers use a large part of their income from the sale of cocoa to settle their debts. Savings is difficult for these farmers, yet examples from Ghana farmer unions (e.g. Kuapa Kokoo cooperative) indicates that developing more effective lending schemes with farmers controlling the terms can greatly improve farmers’ income, creditworthiness, and reduce poverty[21].
3.4.3Lack of Extension Training and Education
Many farmers lack the knowledge of best cocoa farming practices and other extension services. Due to the lack of information and policies these farmers to not enjoy any economies of scale, they eke out a living on subsistence farming and are locked in a cycle of dependency on poor production systems.
As part of the IMF structural adjustment policies of the 1990’s, the cocoa extension performed by the COCOBOD was eliminated and responsibility for these services was shifted to MOFA’s agric-extension agents (AEAs). Due to the technical specialties of cocoa extension, much of this knowledge became scarce or not readily accessible over the coming decade. Anecdotal evidence from a doctoral student performing research surveys with a former COCOBOD extension agent revealed that many farmers thirst for this technical information. Conducting interviews in farming communities, many cocoa farmers would eagerly ask questions, seek advice/clarification, etc. from the agent with some coming to seek his advice well into the night[22]. COCOBOD has recently engaged in a public-private partnership to again supporting cocoa extension beginning in Districts where the Cadbury Cocoa Partnership is working.
3.4.4Large Household Size
The mean household size for the cocoa households in the a study conducted in the Ashanti and Brong Ahafo regions was 8.5 as compared to 4.0 for all households in the same regions[23]. There are high birth rates amongst the poorest of the cocoa farmers. Lacking financial resources or other assets, these farmers believe that they need more hands to expand their yield. As a result, women have more children to support the farming and these children become an additional financial burden. Parents can rarely pay for these children’s formal education resulting in many dropping out or receiving no formal education at all. Health care is also reduced due to the limited income and high demand.
4What’s the Impact Goal of the CLEP Program?
CARE’s CLEP addresses the following three Millennium Development Goals:
Goal 1: Eradicate extreme poverty and hunger
Goal 3: Promote gender equality and empower women
Goal 7: Ensure environmental sustainability
The impact goal of the Cocoa Programme is:
By 2025, poor and marginalized households in cocoa growing communities will benefit from sustainable cocoa production and a pro-poor socio-economic environment (dignified living conditions); they will be empowered to sustain change in gender equality, governmental accountability and equitable resource management.