Cocoa farmers in Africa to benefit from new payment system
Global food ingredients business Cargill has formed a licensed buying company (LBC), Cargill Kokoo Sourcing Ltd, in Ghana, supporting workers in the cocoa industry.
The move allows the company to directly source cocoa from certified farmers in Ghana for the first time to improve traceability of payments.
So far, over 25,000 farmers have registered with the scheme, which was first initiated at the end of last year, and 9,000 are reportedly now said to be pursuing selling beans through Cargill’s LBC network.
The company is already sources directly from farmers and farmer organisations in other origin countries. Moving to this model in Ghana means that the ingredients business will be better positioned to efficiently implement its Cargill Cocoa Promise - assisting farmers across West Africa and Brazil, at scale and better serve its customers.
Cargill’s high–tech purchasing model is built on the principles of sustainability and full traceability in Ghana.
Farmers deliver their cocoa to community warehouses where their beans are digitally weighed in front of them, assigned a fully traceable bar code and funds are then transferred straight to the farmer’s phone or e-wallet using e-money through partnerships with E-Zwich, MTM mobile Money and Tigo Mobil Money.
As Cargill explained, the innovative move to mobile money in Ghana adds assurance for the farmer, improves their ability to trade more effectively and is believed to eradicate risks associated with cash payments.
Details of the beans are then recorded in a standardised management system before the beans are collected by larger trucks and are then transferred to central warehouses.
Through the company’s new bar code system, the company can now trace each individual bag of Ghanaian cocoa beans, sourced through the Cargill LBC, to the individual farm, creating a fully traceable supply chain down to farmer level for the first time in Ghana.
Lionel Soulard, managing director West-Africa Cargill Cocoa & Chocolate said: “Never before has it been more critical for cocoa farmers in Ghana to be the master of their own destiny and improve their own livelihoods.
“With the introduction of an innovative digital payment system, or mobile money for short, this first-of-its kind initiative at scale in Ghana is creating a great opportunity for smallholder finance at the farm level.
“We strongly believe that this way of doing business is the future for cocoa farmers in Ghana. Mobile money is the first step towards improving incomes for farmers, as we build the infrastructure and capabilities for a more efficient and effective supply chain. Our aim is to create an enabling environment for smallholder finance for the future, resulting in better entrepreneurial spirit already noticeable at the farmer level,” continued Soulard.
Mr. Joseph Boahen Aidoo, CEO from Ghana’s Cocoa Board (COCOBOD), welcomed the development of the new buying company, which was initially put in motion at the end of last year.
He said: “We are pleased to have worked with Cargill on such an innovative project, and this shows our continued partnership with Cargill goes from strength to strength. We see this model as the future of cocoa sourcing in our country. COCOBOD will continue to work with all stakeholders in the sector to support the livelihoods of the farmers to bring about efficiency in production and at the same time environmental sustainability and transparency in the sector.”
The introduction of this model reflects Cargill’s commitment to transform the Ghanaian cocoa sector for the benefit of all stakeholders, and reaffirms the Cargill Cocoa Promise, Cargill’s commitment to improving the lives of cocoa farmers and their communities and, in doing so, securing a long-term supply of cocoa.
Soulard added: “Having long standing relations with cocoa farmers and their communities is critical for the full implementation of our sustainability approach and we now intend to expand our existing sustainability activities to enable farming communities to benefit from training, community and farm development support.
“We intend to scale up existing activities to enable the current 9000 farmers dealing with the LBC to benefit from good agricultural practice training, community development, farm development and support in line with the COCOBOD strategy. Developing our sourcing capabilities in the world’s second largest cocoa producing country is an essential step to meet growing customer demand for sustainable, certified cocoa.”