Economic modelling of cocoa-agroforestry solutions in Côte d’Ivoire
Smallholder farmers across Côte d’Ivoire rely heavily on cocoa production as a source of income. Yet the production of cocoa has significant environmental and economic challenges, threatening the livelihoods of producer communities across West Africa.
How to balancing the well-being of farmers and the conservation and restoration of forests along with cocoa production? Côte d’Ivoire’s government has set the ambition to restore forest cover to 20% of the land area by 2030. This objective is framed in the country’s National REDD+ Strategy (2017), Policy for Forest Preservation, Rehabilitation and Extension (2018) and the 2019 Forest Code. It was backed by the world’s leading cocoa and chocolate companies through the signature in 2017 of the Cocoa & Forests Initiative (CFI), which defines core commitments, verifiable actions, and time-bound targets required to promote a deforestation-free cocoa supply chain.
Throughout these initiatives, the adoption of cocoa agroforestry at scale is recognised as a key component that will help drive sustainable cocoa production, while contributing to restoring ecosystems in areas where cocoa is grown. Agroforestry – deliberately integrating trees on farms and across the wider agricultural landscape – holds potential to accrue new and additional economic benefits for farmers. Agroforestry plantations are also more resilient to the impacts of climate change, and those who develop and manage the plantations are less likely to use forest resources in an unsustainable way.
The potential for agroforestry in the cocoa sector to raise farmers’ income is often raised as a motivation for adopting this approach. Yet few studies have addressed the impact of agroforestry adoption on cocoa-farm economics, or examined implications for financing and sustainability of these practices.
Teaming up to analyse their respective cocoa-agroforestry income projections, Cargill, PUR Projet, the European Forest Institute (EFI) and the United Nations Environment Programme (UNEP) have assessed the impact of agroforestry on household incomes across Côte d’Ivoire’s cocoa production landscape.
Cargill and PUR Projet partnered in 2018 to design and implement tailored, supply chain-based and community-led agroforestry and reforestation interventions with cocoa farmers and communities associated with their direct sourcing networks. Using data collected throughout these projects, PUR Projet has developed tailored models for increasing revenue.
Through the 1 for 20 Partnership, UNEP and EFI work together to promote wider adoption and investment in cocoa-agroforestry systems in Côte d’Ivoire. The Partnership promotes using economic analysis of agroforestry models to inform cocoa and forest stakeholders about the potential for scale-up of sustainability initiatives. The Partnership’s economic modelling tool was developed based on agroforestry pilot experiences.
By modelling cocoa farm economics, the viability of various agroforestry scenarios can be accessed. The results help to understand, monitor and improve the economic impact of agroforestry on cocoa farmers. To this end – and ahead of the World Cocoa Foundation’s 2020 Partnership Meeting, a conference dedicated to cocoa sustainability – Cargill, PUR Projet, EFI and UNEP in a new joint paper present models with varying scope and data, illustrating a variety of agroforestry approaches. The resulting joined-up economic models suggest that adopting cocoa-agroforestry can indeed be economically viable for cocoa farmers in Côte d’Ivoire.
The joint analysis shows that agroforestry holds the potential for significantly shifting farmer household income distributions such that more cocoa farmers meet poverty and living income benchmarks. Comparing projected revenue increases achieved through agroforestry scenarios at household level, daily net income per household member would increase by from 9% up to 50%.
The marketing of agroforestry products also hold good potential to increase incomes of cocoa farming households on average over a 30-year implementation cycle. Since adoption of agroforestry is promoted as among the key interventions to help address deforestation in Côte d’Ivoire, this is a promising prospect.
Yet, our models suggest that income increases through agroforestry alone will not lift the majority of farmers in cocoa supply chains out of poverty, the main factor for significantly raising farmers’ income remains the cocoa revenues generated from land assets. This is why further diversification of incomes beyond cocoa-agroforestry stays important.
To strengthen the agroforestry business case for smallholder farmers, and to achieve scaled-up transformation towards agroforestry systems, further conceptualisation and testing of innovative and inclusive financing and incentive schemes must be done. This could include schemes that reward on-farm carbon sequestration or other environmental services generated.
Cocoa farm economic modelling is a first step towards the design of bankable business cases, capable of attracting the necessary capital that will be needed to scale-up agroforestry implementation. This can be done through financing farmers, the value chain or landscapes more broadly. Yet a variety of technical and market factors need to be addressed to make agroforestry work at scale.
The more awareness of the economic, environmental and social benefits provided by agroforestry systems, the more smallholder farmers will be motivated to set up these systems, and the less financial incentive will be needed. Setting up agroforestry systems requires technical competencies, inputs and services. Informing and training farmers, cooperatives, and local trading partners can therefore be an effective way to build local and autonomous competencies essential to the success of agroforestry.
At this point, agroforestry represents an important supply opportunity to ensure the survival of the timber sector in Côte d’Ivoire. The demand, particularly domestic, for timber, fuelwood and local products is such that markets for agroforestry production are largely assured.
Agroforestry is an important component of ecosystem restoration and part of the national solution for protecting and conserving remaining forests. Going forward, cocoa-agroforestry productivity and income gains in cocoa must be linked to the protection of natural forests. For this to happen, a more holistic approach must be adopted, integrating agroforestry into value chains and territories at national and local scales.
To read and download the report, click here.
About the authors:
Cargill exists to nourish the world in a safe, responsible and sustainable way. Every day, we connect farmers with markets, customers with ingredients, and people and animals with the food they need to thrive in more than 125 countries. Cargill Cocoa & Chocolate provides high-quality cocoa and chocolate more sustainably throughout the world and brings our customers peace of mind, integrity and excitement. Our Cargill Cocoa Promise underlines our central commitment to enabling farmers and their communities to achieve better incomes and living standards in harmony with the environment.
PUR Projet works with companies to regenerate the ecosystems upon which they depend. While developing socio-environmental projects to empower local communities, it helps companies strengthen their supply chains through agroforestry, land restoration and sustainable farming practices.
The European Forest Institute (EFI), through its EU REDD Facility, supports countries to improve land-use governance as part of their efforts to slow, halt and reverse deforestation. It also supports the overall EU effort to reduce its contribution to deforestation in developing countries.
The United Nations Environment Programme (UNEP) is the leading global environmental authority that sets the global environmental agenda, promotes the coherent implementation of the environmental dimension of sustainable development within the United Nations system, and serves as an authoritative advocate for the global environment.
The 1 for 20 Partnership is a collaboration between the UNEP and EFI aimed at supporting country’s REDD+ national strategy through the mobilisation of resources at scale for the restoration of Côte d’Ivoire’s forests.
Disclaimer. This article has been produced with the assistance of Cargill, PUR Projet, the EU REDD Facility and UNEP. The views are of the authors’ and do not reflect the position of their funding organisations.