Cocoa Industry

Integrating Small Farmers into the Global Value Chain

Format *
This publication examines the vertical and horizontal integration in the cocoa industry and its potential impacts on stakeholders along the value chain, in particular small cocoa farmers who constitute the backbone of cocoa production worldwide. It contends that the concentration pattern observed at all segments of cocoa GVC may have contributed to a high level of efficiency, but could become problematic, in particular if it fosters oligopsonic/monopsonic or monopolistic/oligopolistic behaviour in the industry with detrimental effects for small players. It also discusses the extent of integration of cocoa farmers into international markets by assessing the transmission of international cocoa prices to the domestic prices paid to farmers. The results suggest that transmission has increased with trade liberalizing reforms undertaken by cocoa producing countries, but, overall, the outcomes are mixed, so far. The reforms have increased the exposure of farmers to the vagaries of international markets, but they are not associated with a significant, if any, increase in the share of world prices of cocoa accruing to farmers. In order to make cocoa cultivation a more viable source of livelihoods for farmers, and ensure a sustainable global cocoa economy, it would be essential for governments and other stakeholders to implement policies that enable cocoa farmers to increase their incomes. The publication is useful for governments of cocoa producing countries, development practitioners, including agricultural economists and the private sector, with an interest in empowering farmers, and in the development of a sustainable cocoa economy. Ultimately, it should make an invaluable contribution to the debate on how to reduce poverty, and attain the Sustainable Development Goals (SDGs) with their commitment to ''leave no on behind'', especially in cocoa farming communities.

Details:

Agency/Department
United Nations Conference on Trade and Development (UNCTAD)
PDF ISBN
9789210579278
PDF Publication Date
Page Count
48

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