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Business Panel Global Cocoa and Chocolate Markets: New Challenges, New Opportunities

Business Panel Global Cocoa and Chocolate Markets: New Challenges, New Opportunities. Brussels, 18 September 2012. Sustainability in cocoa and WCF Programmes Certification initiatives in cocoa CEN process on sustainable and traceable cocoa. Central- West Africa –some facts.

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Business Panel Global Cocoa and Chocolate Markets: New Challenges, New Opportunities

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  1. Business Panel Global Cocoa and Chocolate Markets: New Challenges, New Opportunities Brussels, 18 September 2012

  2. Sustainability in cocoa and WCF Programmes • Certification initiatives in cocoa • CEN process on sustainable and traceable cocoa

  3. Central- West Africa –some facts • +/- 1-2 mln cacao farmers, family 4-7 members • 3-7 ha, 1-2 tonnes cacao/year, 2-5 bags/month • Producer price as a percent of traded price: Ghana +/- 65%, CdI 41% , but new system with minimum prices (Brazil 92%) • No large plantations -> cocoa/chocolate industry owns no cocoa farms • Long/complex chain from farm to port • App. 87% of European bean imports (beans & products) originate in West Africa • Certification? 5%-? > ‘low hanging fruit’, competition at all levels • Child labour: no tolerance, no watertight guaranties

  4. Cocoa: Current Situation and Challenges

  5. World Cocoa Foundation • Formed in 2000 to address cocoa sustainability • 90+ member companies from Europe, the Americas, Asia and Africa and 85% of global turn-over • Partnership/Roundtable Meetings every 6 months in different venues • Programs in West Africa, Latin America, Southeast Asia, and Research • Partnership Focus (Gates Foundation, USAID, USDA,BMZ/GTZ, Danida, Swedish, host governments) • Not a certifying body, but working with partners in a convening role

  6. World Cocoa Foundation – Proud of Our Members

  7. WCF Mission: Sustainable Cocoa Economy The World Cocoa Foundation promotes a sustainable cocoa economy through economic and social development and environmental stewardship in cocoa-growing communities. People: Healthy and thriving cocoa-farming households and communities Planet: Responsible, sound environmental practices Profit: Improved and more equitable economic returns for farmers

  8. Global Program Updates West Africa Southeast Asia Latin America Research WCF/Cocoa Livelihoods Program STCP WCF/ECHOES IFC Cocoa Farm Finance Program African Cocoa Initiative Cocoa Project in Vietnam CoCoPal Philippines Swisscontact Aceh, Indonesia Program Peru Project WCF Challenge Grants Borlaug Fellows Germplasm & Breeding Cocoa of Excellence Monilia Resistance – CATIE Witches Broom Resistance – Univ of Trinidad • Reached over 480,000 farmers & 20 countries

  9. WCF Working for Sustainable Cocoa Production Program Focus

  10. Functional literacy training adults

  11. Cocoa Livelihoods Program (2009-2013) • The Cocoa Livelihoods Program will work with +/-200,000 smallholder, cocoa-growing households in West and Central Africa. • Overall goal of the program is to increase (double) farmer income while strengthening local service capacity • Budget: $ 40 mln Objectives: • Marketing efficiency is improved: professionalizing 40 farmer organizations, giving them the tools needed to expand their group marketing of quality cocoa and improve services to their members. • Cocoa production efficiency and quality are improved at the farm level: training farmers on good agricultural practices, proper application of input supplies such as fertilizer, post-harvest techniques and improving the distribution of improved planting material. • Farmers improve their competitiveness on diversified cocoa farms: providing farmers with improved business skills to help them more effectively manage their farms, encouraging diversification of household income and developing Business Service Centers to provide needed farming services.

  12. African Cocoa Initiative (ACI) • Public-private partnership: World Cocoa Foundation (WCF), cocoa industry members, the Dutch Sustainable Trade Initiative (IDH) and USAID • Key government institutions in the four countries of Cameroon, Côte d’Ivoire, Ghana and Nigeria. • ACI is a $13.5 million, 5-year program • Goal of institutionalizing effective public and private sector models to support sustainable productivity growth and improved food security on diversified cocoa farms in West and Central Africa. • The program aims to double cocoa productivity for 100,000 farm households and in doing so raise per capita income by 150-200%.

  13. ACI: key components • Strong National Partnership Platforms • Improved Productivity through Better Planting Material • Enhanced Extension and Farmer Training Services • Market-Driven Farm Input Services

  14. Key Takeaways… • No silver bullet to address diverse constraints • Crop drives economic growth, employs millions in producing and consuming countries • Collective efforts are most effective • We need successful farmers!!!

  15. Certification and CEN

  16. Certification – the EU framework • EU communication – contributing to Sustainabile Development: The Role of Fair Trade and non-governmental trade-related sustainability assurance schemes • Respecting the dynamics, no legislation • Proposal for a Directive on public procurement • Labels (art 41)

  17. Certification – some facts • Certification: private initiatives • FLO, Utz Certified, Rainforest Alliance • 10 years old – response to crisis in coffee • Originally consumer focus • Today, farmer focus as important • Important private and public commitments: • Mars: 100% certified by 2020 • Fererro: 100% certified and Source Trust by 2020 • NL: 100% certified chocolate in 2025 • Soft commitments in Germany: towards 50% by 2020 • Cocoa certified: <5%, coffee 8-10% • Certifiers compete on all levels

  18. Certification – the challenges Growth from single digit to double digit in a short period • The sustainability/development issue: • Farmer organization is vital • Supportive and enabling environment • Producer countries/producers still skeptical – CdI position in CEN process • ‘Low hanging fruit’ is certified –reach ‘difficult’ farmers • Commitments will generate huge pressure at producer level • Pressure should not result in ‘certifying poverty’

  19. CEN process on sustainable and traceable cocoa • Process started in May, meeting in September • Committee (TC415) to develop European (voluntary) standard “Establish a framework which meets the needs of producers and consumers/other stakeholders for sustainability of cocoa production and traceability of the cocoa supply chain. The outcome shall be a clear, measurable, robust and achievable standard, which is cost effective for stakeholders and which encompasses the following objectives”: • Process: 3 years, if successful • Link work with ISO processes • All relevant stakeholder groups, consuming and producing countries

  20. CEN process on sustainable and traceable cocoa (3) • Obtain clarity and transparency of requirement of sustainability of cocoa bean production and for traceability of cocoa beans and cocoa products. • Establish a credible and transparent measure of attainment of long term sustainable cocoa production. • Obtain involvement throughout the entire standard setting process for the CEN cocoa standard by an active participation of cocoa producing and consuming countries. • Become a scaleable and implementable standard global recognised for its inclusive nature as well as its ability to deliver long term sustainability impact to which all standard schemes can align. • Support the eradication of forced labour, child labour and the worst forms of child labour in conformity with the applicable ILO conventions • Support the improvement of the standard of living, social conditions and working and labour conditions, including health and safety, of populations engaged in the cocoa sector

  21. CEN process on sustainable and traceable cocoa (3) • Improve impact of productive and sustainable cocoa production on the environment. • Improve farmer income and livelihoods, including improving productivity of cocoa farming, encouraging diversification of production and income, and facilitating access to markets for cocoa farmers • Upscale the production of sustainable cocoa beans in an efficient manner and at viable costs. • Support and promote transparency on all costs and economic impact of certification. • Promote farmer organization and empowerment • Improve communication on traceability and sustainability of cocoa products • Liaise with ISO/TC 34 regarding quality and food safety. s

  22. Final remarks • WCF: • is working with partners in a convening role. • certification is a tool, not an objective. • Some producing countries/farmer organizations are still reluctant • Upscale from current figure of cocoa certified to double digit commitments in the near future without comprising on the quality of the criteria used. • Clearer view on role of certifiers. s

  23. Thank you for listening and your patience! • Further questions & more information • Geert.waelkens@worldcocoa.org

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