Impact of fair trade certification on rural livelihoods

Cocoa farming plays a critical economic and social role in Ghana. Cocoa is the country’s second most important export and provides income to a large segment of the Ghanaian population. But the cocoa sector has been afflicted with continuing problems, including declining productivity, crop damage from pests and disease, persistent poverty among farming communities, health and environmental problems, and instances of child and forced labor on farms. A variety of initiatives aimed at addressing these problems have been introduced recently by government and non-governmental organizations. Principal among these initiatives is the program developed by the Cadbury Cocoa Partnership (CCP).

This baseline survey has gathered detailed data on conditions and challenges faced by a large sample of cocoa farmers. The goal of the survey was to measure economic and social indicators before the implementation of the key components of the CCP program to enable later comparisons with data gathered post implementation. Overall we surveyed farming households and community leaders in 335 villages in the main cocoa growing regions (Eastern, Central, Ashanti, Brong Ahafo, and Western). We interviewed a sample of approximately 3,000 cocoa farmers, gathering information about approximately 13,400 household members.

This baseline survey provides rich insights into conditions faced by cocoa farmers across the country. Several key results stand out. First, productivity is generally low. Farming practices are simple and the use of fertilizers is negligible. Regional variation in productivity exists but it is minor compared to within region variation. The opportunity for significant productivity gains is apparent as some farmers are much more productive than others in the same region.

Second, the low productivity results in extremely low incomes for cocoa farming households. The average income per capita per day for a cocoa farming household is below GHC 1. This situation describes a kind of poverty trap in which extremely low income inhibits the adoption of more advanced farming practices, including the use of fertilizers and pesticides.

Third, these conditions coincide with cocoa farmers’ own assessments of their situation that suggest that the general trend is worse rather than better. Less than half of cocoa farmers (40% of farmers, ranging from 21 % in Western to 52 % in Eastern region) would recommend to their children to follow in their footsteps and instead believe that opportunities are better in other sectors.

Fourth, farmers are not organized in ways that allow them to confront these problems. Less than 10% of farmers report being members of a farmers’ association.

Finally, separate responses from farmers and village leaders indicate substantial agreement about what types of community infrastructure is needed most urgently: roads, education, and health consistently ranked among their top priorities.