Abstract
It is often claimed that cocoa producers are poor, but the extent of their poverty is rarely defined. We analyzed six data sets derived from household questionnaires of 385–88,896 cocoa producers in Côte d'Ivoire and Ghana. Across all data sets, many households (30–58%) earn a gross income below the World Bank extreme poverty line and the majority (73–90%) do not earn a Living Income. Households with less income per person per day generally achieve lower cocoa yields, consist of more household members, have a smaller land size available, and rely more on cocoa income than households with higher incomes. When comparing the effects of increasing prices and yields on gross income, yield increases lead to larger benefits especially for the poorest households. Doubling the cocoa price would leave 15–25% of households with a gross income below the extreme poverty line and 53–65% below the Living Income benchmark. At yields of 600 kg/ha, against current yields around 300 kg/ha, these percentages are reduced to 7–11 and 48–62%, respectively, while at yields of 1,500 kg/ha only 1–2% of households remain below the extreme poverty line and 13–20% below the Living Income benchmark. If we assume that the production costs of achieving a yield of 1,500 kg/ha are 30% of revenue, still only 2–4% of households earn a net income below the extreme poverty line and 25–32% below the Living Income benchmark. Whilst sustainable intensification of cocoa production is undoubtedly a strong approach to increase cocoa yields and farmer incomes, achieving this does not come without pitfalls. The poorer households face multiple barriers to invest in cocoa production. A better understanding of cocoa producing households and the resources available to them, as well as the opportunity for alternative income generation, is required to tailor options to increase their income. The utility and interpretability of future household surveys would be drastically improved if definitions and variables addressed were approached in a standardized way.
Highlights
Most of the world’s cocoa originates from West Africa, with Côte d’Ivoire and Ghana contributing more than 60% of all cocoa (ICCO, 2019)
The incomes of many cocoa producing households in both Ghana and Côte d’Ivoire fell below the World Bank extreme poverty line of 2.12 $ (PPP 2018), and the majority were below the Living Income benchmark of 5.81 $ (PPP 2018) for Ghana and 6.32 $ (PPP2018) for Côte d’ Ivoire (Figure 2)
The lowest mean and median total income pppd was found in the Wageningen University & Research (WUR) study of Ghana, resulting from a low cocoa income due to low yields and little income from other sources
Summary
Most of the world’s cocoa originates from West Africa, with Côte d’Ivoire and Ghana contributing more than 60% of all cocoa (ICCO, 2019). All cocoa in West Africa is produced by smallholder farmers, many of whom are poor (e.g., Fountain and Hütz-Adams, 2018; Cargill, 2019; Fairtrade, 2020). Both Côte d’Ivoire and Ghana have taken a variety of measures to make cocoa more profitable for farmers, through the Conseil du Café-Cacao and the Ghana Cocoa Board (Cocobod), respectively. In 2019, the governments of Côte d’Ivoire and Ghana introduced a premium on the export price of cocoa for the 2020/2021 season, known as the Living Income Differential, of USD 400 per ton.
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