Cote d'Ivoire: Financing the Transition to Agroforestry

press release

Bamba Ibrahim, a 35-year-old cocoa farmer in Agboville in the Ivory Coast grew up in a family of cocoa farmers, helping his family with the farm while going to school. But When he was 15, he started farming full-time. Today, his cocoa beans are worth than a few years ago, as the price of cocoa has dropped. "Of course, I wish I had more land so I could plant more cocoa and make more income," he says.

The failure of current models of cocoa production

The chocolate business is one of the largest in the world. In 2015, the global market for cocoa amounted to approximately US$100 billion. West Africa accounts for 70 per cent of global cocoa production, supplied by smallholder farmers like Ibrahim. Côte d'Ivoire and Ghana are the largest producers. In Côte d'Ivoire, cocoa production and trade represent 40 per cent of export revenues and employs 8 million people, almost one third of the country's population.

One serious issue with cocoa production in West Africa is the systematic decline of the quality and quantity of cocoa yields. Over the years, extensive cultivation practices have led to ever-increasing expansion of cocoa areas, deterioration of soil quality and decreasing crop yields. This has resulted in large-scale deforestation and the deterioration of soil quality in Côte d'Ivoire. Over 80 per cent of the country's forests have disappeared since 1960. Côte d'Ivoire used to be a world biodiversity hotspot of great biological richness and species diversity, but deforestation has put that at risk as animals are rapidly losing their last habitat--including elephants, pygmy hippos, flying squirrels, pangolins, leopards and crocodiles.

The need for finance to produce greener chocolate

From the perspective of smallholder farmers, West African governments and the cocoa industry, increases in production will have to come from the intensification of production. There are many options that could ensure sustainability and climate resilience while increasing yields, namely climate-smart agriculture, soil conservation practices, promotion of agroforestry at scale to ensure shade-grown cocoa production and soil rehabilitation. How to streamline these solutions is intimately linked to knowledge dissemination and the availability of finance.

The financial challenges of smallholder farmers

According to the World Bank, Ivorian producers receive only a small share of the export price on international markets and most earn less than a dollar a day, says a Yale study.

Things have gotten even worse for smallholder farmers in the last year. From July 2016 to March 2017, global cocoa prices fell by more than a third. Most smallholder cocoa farmers in Côte d'Ivoire are trapped in poverty, haunted by food insecurity and with no access to finance or knowledge to ensure productivity gains.

"The UN Environment Programme is helping build sustainable cocoa production by engaging the private sector and technical partners, and encouraging farmers to use high-quality seedlings and the right agroforestry techniques to take care of their plantations. But the seedlings and plantations cost money and small famers do not have the means, so we need the help of the private sector and the chocolate industry to help them access funds. The UN Environment Programme has helped us bring the different partners together to set up mechanisms that will enable the small farmer to access finance," says colonel Kouamé Ahoulou Ernest, coordinator of the national REDD+ secretariat.

Sustainable financing solutions for zero-deforestation cocoa

"We have introduced agroforestry in some pilot projects," says Jean Paul Aka, national sustainable land use finance specialist and REDD+ expert, "but if we want to scale up, we need to help farmers that work outside cooperatives to access finance, in order for them to convert to agroforestry, buy seeds and bridge the revenue gap while waiting for the new plants to bear cocoa fruits. That's what we're working on.

"We have started organizing platforms (such as the 1 for 20 Conference in Abidjan, last November) where we bring together cooperatives, cocoa producers, cocoa supply chain, traders, companies, the forestry sector, the fruit sector and the national and international banks. Because one of the big, remaining challenges is that smallholders need to possess a land title to qualify for a bank loan. But getting a title costs about US$1,400 per hectare, a sum not many farmers have. So we hope that by bringing the financial actors and the chocolate industry together, they can develop a mechanism to help the farmers access finance. I am optimistic because the government has promised to improve forest cover to 20 per cent by 2040."

As for Ibrahim, he has never bought or tasted chocolate. "For the money I would have to spend on a bar of chocolate, I can buy a bag of rice to feed a family of seven people," he says.

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