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Economic Development

Kraft Foods’ Cocoa Partnership in Ghana

To develop the next generation of cocoa farmers in Ghana, Kraft Foods created a cross-sector initiative with a long-term view.

The US State Department is working to accelerate practices and thinking around the impact economy—an economy in which government works with civil society and the private sector to create positive social and environmental impact while generating economic value. The following article is part of a series written by participants in Secretary of State Hillary Clinton's Global Impact Economy Forum in Washington, DC, April 26-27.

 

Chocolate is one of the world’s most popular treats. It’s a favorite in markets from the United States and the United Kingdom to Russia, India, and Brazil, and in homes around the world, including mine. But while the confection is everywhere, the key ingredient—namely cocoa—can be grown only in a few countries near the equator. And those countries tend to be places where political and economic stability is not always assured and where poverty reduction and social welfare remain a concern for citizens and governments alike. Even more challenging, cocoa farming is mostly done by small-holder farmers and has not really seen the technological advances that could make cocoa farming less laborious and more profitable for farmers. 

Ghana is the second largest cocoa growing nation in the world. As such, cocoa is a very important crop for the Ghanaian economy and Ghana is an important source for the world’s chocolate makers. Today, there are approximately 700,000 cocoa farmers among a population of 25 million. The average age of a cocoa farmer is about 56. And given the many factors that make cocoa farming difficult, risky, and often not very profitable, most cocoa farmers are telling their kids to pick a different job. 

My company, Kraft Foods, is one of the largest buyers of branded cocoa in the world and Ghana is a key source for us. So it’s pretty easy to understand why we have a vested interest in ensuring there is a next generation of cocoa farmers in Ghana.

After much in-depth research and discussion, we’ve learned that developing the next generation of cocoa farmers is about more than getting higher yields and better prices for them—even though that is clearly important. It’s ultimately about creating thriving and sustainable cocoa communities. But that is not something we can do alone.

In 2008, we launched an ambitious 10-year, $70 million plus initiative called the Cocoa Partnership. It was designed to support cocoa communities in core cocoa-growing regions of the world, starting in Ghana. Because our research made clear that improving yields would not be enough, our program has four platforms: 1) to increase current incomes by increasing cocoa yields sustainably; 2) to make cocoa farming an attractive business for youth; 3) to provide additional sources of income and better access to goods and services; and 4) to improve village life. (For more information on the program see the attached figure.)   

It’s a long-term bet by Kraft to try to increase the quantity and quality of Ghanaian cocoa. But we’re confident we’re on the right path. Results so far include: programs in 100 communities, with 100 more to come within the year; a 20 percent increase (above the country average) in cocoa yields in our targeted communities; a $5.5 million social premium generated for Ghanaian cocoa farmers from sales of Fair Trade products over the past three years; and support for nearly 200 community-initiated development projects—from solar panel installations to well creations.

While much has been accomplished, much remains to be done, especially on the social front. And it won’t be easy. We’ve learned some lessons along the way—both from what we did right and what we got wrong—that may help others in trying to tackle similar issues. Here are my Top 10 Tips for developing multi-stakeholder, public-private partnerships of this nature: 

1. Get everyone to acknowledge up-front that business and social aims are not at odds or mutually exclusive. They can—and more often should—go hand-in-hand.

2. Embrace the fact that solving complex societal issues cannot be done by any single actor or sector—no matter how big. Solving these issues in ways that are sustainable and scalable takes collaboration among business, government, and civil society, so plan to partner up from the start.

3. Recognize that multi-partner collaborations take longer and are more complicated. Set your internal stakeholder expectations for the longer-term—five years minimum. That’s a long time in corporate life these days, but it’s also the only way to ensure broad, lasting change. So be sure to make the business case compelling enough that even management changes won’t derail your efforts.

4. Secure and segregate funding from the outset. That helps ensure that even amidst corporate change or challenging quarters, your program won’t be at risk.

5. Know that various actors will have very different perspectives and motivations. Be prepared to talk a lot early on, to ensure that everyone is equally committed to the outcome and that relationships are built on mutual transparency, trust, and accountability. Then put the agreement in writing.

6. Allow partners to do what they do best. For example, companies should focus on R&D, innovation, and market creation. National/local government is needed for infrastructure, risk mitigation, land rights, legal protections, and creating a supportive policy environment. International donor partners, such as the US Agency for International Development, the UK Department for International Development, and the UN's World Food Programme, can play a key role both by investing in underpinning programs like education, nutrition, sanitation, hygiene, and extension services, and by advocating for the enabling environment on issues like trade, finance, and human rights.

7. Know that solving yield and income issues are far simpler than shifting social and cultural norms. But you must be mindful of and have a plan for both kinds of change—and sequencing and staging plans are critical.

8. Recognize that communities won’t value what has been “gifted” to them or imposed upon them. That’s why our program focuses on community empowerment.

9. Build flexibility into the system. Things never go exactly as planned, so having alternatives and flexibility will help ensure you’ll keep moving toward your desired outcome.

10. Don’t be discouraged by how long change takes nor declare victory too early. Holistic, systemic change is tough. But if you’ve done the work up front to build a model that is sustainable, you’ll know when there is enough momentum to keep it moving without you. And then let it go and move on.

These are some of the things we’ve learned through the Kraft Cocoa Partnership and other corporate development programs. It won’t make doing them any easier, but I feel strongly that finding ways for business and society to simultaneously get what they need is the only way to tackle these big issues. I hope this advice at least helps.

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COMMENTS

  • Graham Baxter's avatar

    BY Graham Baxter

    ON May 3, 2012 04:23 AM

    Can’t believe Yeatman didn’t even mention Cadbury whose Ghana partnership Kraft bought in the takeover.

  • BY Roger Ekuh-Ngwese

    ON March 31, 2014 09:53 AM

    Hi Mrs. Yeatman,

    We have been practicing a similar trade model for over 10 years.
    Thought an old blog post , could we discuss this even further?
    I would like to know where this initiative is at.

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