Cacao Value Chain Analysis

COMMODITY CHAIN

Cacao often involves a long and intricate value chain, thus payments to farmers for the beans are just a modest share of the cost of the consumer products derived from cacao. Since cacao production essentially depends on natural resources along with unskilled and semi-skilled low-cost labor rather than special and sophisticated technology, it makes only for a narrow portion of the expenditures. This value chain involves several agents as farm-level activities which can influence quality, transportation enterprises who act as intermediaries in the transit of the commodity to ports or processors, exporting firms and manufacturers who transform the cacao into finished consumer goods. In the same manner, agronomic and environmental factors can affect the value chain as those can potentially influence agrarian products (Abbott, 2013).

Although cocoa has its origins in South American tropical rainforest, by the end of the 19th century it had expanded to Africa, which by the mid-1920s had already become the primary cacao producer in the world. However a large amount of cacao production in West Africa, around 90 to 95 percent of cacao produced is cultivated by smallholders with farm sizes ranging from two to five hectares (ICCO, 2008). The majority of those small-scale farms are clustered in the southern region of West Africa. Thanks to the

Privatization of cooperatives and boards is one of these measures, but its completion remains problematic for handful reasons. Mainly, the chocolate industry defends Cocobod, Ghana’s cocoa board which fixes the buying price for cacao in Ghana, and opposes its privatization, as that country remains as the only supplier for high-quality cacao to the world market, charging a substantial premium over the ICCO (International Cocoa Organization) price (Abbott,