Producer Profile

KUAPA KOKOO - COCOA CO-OPERATIVE, GHANA

“Fairtrade is a good thing. Things you take for granted may be hard to come by in Ghana. Fairtrade is good to the farmer and makes us happy. We would like to sell more cocoa to Fairtrade so more farmers can taste a better life.

“We have taken our destiny into our own hands. Through Fairtrade and Kuapa we now have a lot of progress. We have good drinking water, toilet facilities and schools. Kuapa pay the farmers on time and there is no cheating when the cocoa is weighed. We meet every two weeks to share our problems. We are able to generate extra income through our soap making schemes that help us through the lean months. Kuapa Credit Union gives us loans and enables us all to benefit. We can take a loan out as an individual or as a group.

“Kuapa have assisted women, they ensure that women have a voice and that we are heard. I have learnt a lot from Kuapa. I grew up in cocoa and I see many differences between Kuapa and the other buying companies.”

Comfort Kwaasibea, cocoa farmer

SUMMARY

Kuapa Kokoo is a cocoa-growing co-operative set up in 1993 in response to the partial liberalisation of the cocoa sector in Ghana. It is the only farmer-owned organisation among the private companies that have been granted government licences to trade cocoa. In this marketing role, Kuapa Kokoo purchases cocoa from members and other farmers on behalf of the state-run cocoa board which controls all exports. Kuapa Kokoo now represents almost 50,000 small-scale cocoa growers and in 2007 sold 12% of production to the Fairtrade market.

CADBURY’S COMMITMENT TO FAIRTRADE

Cadbury’s groundbreaking move to convert all Cadbury Dairy Milk chocolate in Australia, New Zealand, Canada, Japan, the UK and Ireland to Fairtrade will quadruple the sales of cocoa under Fairtrade terms for cocoa farmers in Ghana. As well as the guaranteed minimum Fairtrade price, the farmers will benefit from the Fairtrade premium, an additional sum of US$150 for every tonne of cocoa, which goes straight to the farmers’ groups to spend on business improvements, cash payments, and social projects within their communities such as healthcare and clean drinking water.

This move will initially increase Fairtrade cocoa sales for Kuapa Kokoo, but will also open up new opportunities for thousands more farmers to benefit from the Fairtrade system. Around 650,000 mainly small-scale cocoa growers in Ghana do not belong to farmers’ organisations and sell their crop individually to licensed buying companies. In the longer term Fairtrade will be working with Cadbury and local organisations to help organise more groups of cocoa farmers into co-operatives and work with them to achieve Fairtrade certification. This will build on the Cadbury Cocoa Partnership (CCP), launched in January 2008, in which they are investing AU$100m over 10 years in Ghana to improve the lives of cocoa farmers. Combining the expertise and standards of Fairtrade with work being done in the CCP will lead to a more sustainable future for tens of thousands of cocoa farmers, their families and their villages.

SOCIAL CONTEXT

Members are predominantly smallholders living in remote and deprived parts of the country. Most of the cocoa growing villages do not have access to healthcare, clean drinking water, or electricity and rely on kerosene for artificial light. Most villages lack basic schools, educational materials, and teachers. High illiteracy rates are improving with the introduction of the government’s free compulsory basic education programme.

The average farm is 4 hectares with around 3 hectares under cocoa, which accounts for virtually 100% of farmers’ cash income. The farms are family-run but larger farms sometimes employ seasonal labour. Some farmers grow plantain, coco yam, cassava and vegetables for home consumption and plantain and oranges for sale at local markets. But the soil in many cocoa farms is too poor to grow vegetables and other food crops so they must be bought in at extra cost.

Transporting cocoa and other crops is hampered by unreliable transport and the lack of access roads. Apart from free basic education, farmers must contribute to social services such as healthcare and secondary education. Farmers are very concerned about having to employ expensive casual labour to help with weeding and harvesting because of the decrease in family labour as young people in particular are increasingly migrating to towns looking for a better life.

KUAPA KOKOO AND FAIRTRADE

Kuapa Kokoo was Fairtrade certified in 1995.
Sales to the Fairtrade market have grown from around 3% of total production in 1999 to 12% in 2007.
The Fairtrade minimum price for cocoa is US$1,600/tonne plus the Fairtrade premium of US$150/tonne for investment in business, social or environmental projects. When the world cocoa price is US$1,600/tonne or above, the Fairtrade price is the world price plus the US$150/tonne premium.
The Fairtrade minimum price is an export price paid to the producer organisation and includes the costs of delivery to port and loading on the ship (known as Free on Board or FOB). The producer organisation deducts its costs from the amount it pays farmers for their cocoa beans.
Each year Cocobod sets a farmer price for the coming cocoa season. It is a proportion of the predicted world FOB price, based on an assessment of world cocoa futures prices at the London and New York exchanges. The high quality cocoa grown in Ghana typically attracts a price differential which is shared with growers at the end of the season in the form of an annual bonus payment.
The government price has effectively been above the Fairtrade minimum price in recent years due to high world prices. It includes an additional price differential of up to 10% for high quality Ghanaian cocoa beans, an incentive to increase productivity and boost the economy with additional dollar earnings.
Like most commodities, world cocoa prices are volatile and have been subject to a long-term downward trend – figures from the UN Food & Agriculture Organization show that in real terms prices in 2000-2005 were a quarter of what they were in the 1970s.
Cocoa futures prices at the New York Exchange fell to a 27-year low of US$714 a tonne in November 2000, before tightness of supply saw them rebound to a 28-year high of US$3,275 in July 2008.
Price volatility has increased as a result of the global financial crisis: cocoa fell to US$2,000 a tonne in autumn 2008, climbed to US$2,800 in January 2009, then dropped back to US$2,300 in March 2009. Despite this volatility, a probable global cocoa deficit in 2009, predicted by the International Cocoa Organization (ICCO), should prevent prices falling steeply.
Kuapa Kokoo’s partnership with Fairtrade is helping develop a strong, democratic institutional framework at all levels of the organisation. With the additional income from Fairtrade premiums, Kuapa Kokoo has been able to improve the livelihoods of its members; projects undertaken by the organisation have helped the farmers, especially the women, empower themselves, build confidence and independence, and ensure a sense of community participation and ownership. The extra income from Fairtrade sales has been used for:
- • Direct payments to farmers in the form of an end-of-year bonus
- • Dozens of social projects including the provision of wells and bore holes for drinking water, and construction of public toilets
- • Mobile health programme which visitsmembers’ villages
- • Funding various activities including the construction of two day-care centres, a block of six classrooms and purchase of two mobile cinema vans for a farmers' education programme
- • Construction of warehousing at the Tema port
- • Employment of Development Officers to advise farmers on good agricultural practices, set up training programmes in management and leadership skills, and organise HIV/AIDS workshops
- • Initiation of alternative income generating schemes, particularly for the empowerment of women, such as tie-dye textiles, soap making, corn milling, and snail farming for local and export markets.

The participation of women is actively promoted. Each society elects a Management Committee of seven which includes at least two women. Each society then delegates one female and one male member to elect Area/Regional Executive Committees of which two of the seven members must be women. Five of the 33 members of the National Executive Committee are women and one of the two delegates sent to the AGM by each society must be a woman. Seminars and workshops have also been introduced to help women develop other income generating activities such as soap making using the potash produced from burnt cocoa husks.