[Ghana] Cocoa farmers bet on modern purchasing model to grow income
Over 25,000 cocoa farmers in Ghana have been registered with a high tech purchasing model championed by agricultural multinational Cargill that allows them to sell directly to the company therefore reaping higher market value for their produce.
The licensing buying company, LBC, model dubbed Cargill Kokoo Sourcing Ltd, which has been operational since November 2016 is built on the principles of sustainability and full traceability in Ghana.
Farmers deliver their cocoa to community warehouses where their beans are digitally weighed in front of them, assigned a fully traceable bar code and funds are then transferred straight to the farmer's phone or e-wallet using E-money through partnerships with E-Zwich, MTM mobile Money and Tigo Mobil Money.
The revolutionary move to mobile money in Ghana adds assurance for the farmer, improves their ability to trade more effectively and eradicates all risks associated with cash payments.
Details of the beans are then recorded in a standardized management system before the beans are collected by larger trucks, which transfer them to central warehouses. Through Cargill's new bar code system, the company can now trace each individual bag of Ghanaian cocoa beans, sourced through the Cargill LBC, to the individual farm, creating a fully traceable supply chain down to farmer level for the first time in Ghana.
Speaking about the importance of working with our partners to introduce this new payment system into rural areas in Ghana, Lionel Soulard, Managing Director West-Africa Cargill Cocoa & Chocolate said, "Never before has it been more critical for cocoa farmers in Ghana to be the master of their own destiny and improve their own livelihoods. With the introduction of an innovative digital payment system, or mobile money for short, this first-of-its kind initiative at scale in Ghana is creating a great opportunity for smallholder finance at the farm level.
"We strongly believe that this way of doing business is the future for cocoa farmers in Ghana. Mobile money is the first step towards improving incomes for farmers, as we build the infrastructure and capabilities for a more efficient and effective supply chain. Our aim is to create an enabling environment for smallholder finance for the future, resulting in better entrepreneurial spirit already noticeable at the farmer level," continued Soulard.
Mr. Joseph Boahen Aidoo, CEO from COCOBOD said, "We are pleased to have worked with Cargill on such an innovative project, and this shows our continued partnership with Cargill goes from strength to strength. We see this model as the future of cocoa sourcing in our country. COCOBOD will continue to work with all stakeholders in the sector to support the livelihoods of the farmers to bring about efficiency in production and at the same time environmental sustainability and transparency in the sector."
The introduction of this model reflects Cargill's commitment to transform the Ghanaian cocoa sector for the benefit of all stakeholders, and reaffirms the Cargill Cocoa Promise, Cargill's commitment to improving the lives of cocoa farmers and their communities and, in doing so, securing a long-term supply of cocoa.
Soulard continued, "Having long standing relations with cocoa farmers and their communities is critical for the full implementation of our sustainability approach and we now intend to expand our existing sustainability activities to enable farming communities to benefit from training, community and farm development support. We intend to scale up existing activities to enable the current 9000 farmers dealing with the LBC to benefit from good agricultural practice training, community development, farm development and support in line with the COCOBOD strategy. Developing our sourcing capabilities in the world's second largest cocoa producing country is an essential step to meet growing customer demand for sustainable, certified cocoa."
"We are excited to continue this sustainability journey in Ghana, in partnership with COCOBOD, to address key challenges for our industry such as deforestation. Together, we are investing in the next generation of cocoa farmers and supporting the development of farmer aggregates," said Soulard. "We look forward to building on our long history in the country and to embracing innovative sustainability practices and the latest technologies along the way. Above all else, we are committed to improving the livelihoods of Ghanaian cocoa farmers and their communities for generations to come."
Cargill celebrated the establishment of its own licensed buying company (LBC) - Cargill Kokoo Sourcing Ltd - in Ghana, in the presence of a Deputy Minister for Trade and Industry, Hon. Carlos Kingsley Ahenkorah, a Deputy Minister designate for Food and Agriculture, Hon William Quaitoo, the Ambassador of the United States to Ghana, H.E Robert P. Jackson, the Ambassador of the Netherlands to Ghana, H.E Ron Strikker, representative of the Chief Executive Officer, COCOBOD and representatives from Cargill.
Cargill already sources directly from farmers and farmer organisations in other origin countries. Moving to this model in Ghana means that the company will be better positioned to efficiently implement the Cargill Cocoa Promise at scale and better serve its customers.