Agriculture and Environment: Cocoa
Better Management Practices: Work with companies to "Green" their supply chains
A second key leverage point is the marketing and supply system.
A careful examination of the cocoa value chain indicates that there are a few areas where most of global production passes through the hands of only a few. These leverage points should be the key targets for affecting the sustainability of production at the local level.
For example, cocoa producers traditionally sell their product to 1 of the 3 buyers - middlemen who aggregate stocks for resale (e.g., Phibro, Sucres at Denrees, Jacobs Suchard, S.W. Group, Tardivat, Cargil), cocoa butter producers (e.g., Gill and Duffis, Barry, W.R. Grace, Gerkens, Van Houten), or chocolate confectioners (e.g., Jacobs-Suchard, Mars, Nestle-Roundtree, Cadbury, Hershey's).
The last two categories represent very few players. In some areas buyers have near monopolies; in others a few buyers have oligopolistic control of markets. The category of middlemen has the largest number of players, but even there the total numbers are quite small by comparison to the number of producers, especially when dealing with specific regions.
One proposal would be to pressure large multinationals to make conservation investments in pristine forest areas as compensation for the forest destruction that occurs with the production of cocoa. These "forest offsets" would be similar in theory to carbon offsets. Since multinationals are few in number and heavily capitalized, such negotiations would be more simple, cost-effective, and timely than efforts to modify the behaviour of hundreds of thousands of small producers.
The problem with this approach is that it assumes that production impacts cannot be mitigated directly, for example, that there are no better ways to produce cocoa. Rather, the goal is to make sure that every company involved protects a forest equal in size to the one that the product they buy will destroy for the establishment of farms.
The theory is that there would be no net loss from cocoa production. This is fine when replanting occurs under existing cocoa and shade trees. If, however, cocoa production is indeed a moving frontier, then this option is not feasible. It does not even postpone the inevitable forest destruction for very long unless the set-asides are purchased and put into protected status.
A better approach would be to work with companies in the supply chain to develop screens for more ecological production that they can use for their purchases. Once the ecologically based screens are created for buyers, they can also be used to reduce the risks of investors and insurers who are also important players with the industry.
Such screens will send a signal to producers about what type of products, produced in what way, they want to purchase. While no one knows how to produce cocoa indefinitely on the same piece of land, better practices for the industry are known and those not well known can be made available to those producers who are able to be competitive.
Grafting improved varieties, high-density planting, avoiding steep slopes and riparian areas, reducing the exposure of soil during planting, utilizing ground cover, intercropping, reducing input use, reducing waste or converting it to usable by-products, and regular replanting are some of the techniques that can be encouraged. If adopted they would reduce considerably the most common problems from current practices. By working in partnership with producers to encourage the adoption of these practices, buyers can help to maintain their sources of supply well into the future.
