The Landscape for Cocoa Livelihoods project hypothesizes that two significant barriers to households’ ability to achieve a living income from cocoa in Ghana are caused by (1) low yields and (2) lack of a market for positive environmental externalities for shade grown and deforestation-free cocoa.
The project proposes to develop and test a mechanism for managing landscapes that provides living income opportunities for cocoa farmers by addressing these two barriers. Specifically, certain farmers will be better placed to achieve living income through intensification, while for others, payments for their positive externalities will be a more suitable strategy. By segmenting the landscape into priority intensification and conservation zones based on ecosystem services, strategies to achieve living incomes can be better aligned to restoration of environmental functioning and are therefore more sustainable in the long run. Good agricultural practices will be promoted for both systems, including climate smart practices and optimal shading levels.
Based on initial simulations, an estimated 3,000 farmers will eventually be able to close the living income gap of 1,500 eur per household through doubling of cocoa yields, while a smaller number of an estimated 500-1000 conservation-priority farmers near environmentally significant zones will eventually be able to close the annual living income gap through a more diversified livelihood approach including shrinking the yield gap, income from shade and timber trees, and payments for maintaining ecosystem services.
In sustainable intensification zones, the project will deploy Targeted GAP together with demonstration of benefits of diversification through agroforestry. Targeted GAP is a mechanism Cocoa Life has started to pilot in Ghana which provides interest-free production loans for purchase of fertilizers, fungicides and hired labour to a carefully selected number of cocoa farmers. The annual loan (~$800) ensures required resources are available at the right time in order to achieve significant productivity improvement (pilot results indicate double yields are possible). Careful selection of borrowers increases chance of success and reduces repayment risk as they are farmers with a strong, though informal, credit history with the trading company, mature and healthy trees and high willingness to invest in cocoa and adopt new practices such as agroforestry.
In conservation zones, in addition to Targeted GAP for cocao agroforestry management, additional standards related to management of adjacent community forests will also apply. Initial simulations suggest that at scale, an annual payment of about 350 euro per household per year may be feasible to simultaneously achieve living income and avoid deforestation and forest degradation.
Reforestation will be explored as part of the Cocoa and Forests Initiative work planned for the region in order to mobilize resources for reforestation activities. The Landscape for Cocoa Livelihoods project will distribute seedlings to promote tangible tree ownership and appreciation of biodiversity conservation as well as providing the incentives and monitoring mechanism to increase impact and sustainability of reforestation initiatives.
Concrete measurement and monitoring of the living income levels will be achieved through integration of the remote sensing monitoring system and Olam’s traceability system for recording transactions. The system records the volumes and payments at point of purchase, enabling spatial triangulation of volume and payment increases with observed land use change monitoring for determining where intensification and conservation strategies are achieving their intended effects.