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Markets Institute: Shifting the Cocoa Production Paradigm

Each year, we consume close to 3 million tons of cocoa products globally. With a 2015 market value of some $100 billion, cocoa production employs between 5 to 6 million farmers, mostly smallholders living on less than $1 a day.

But cocoa is in crisis. Productivity is declining. Plantations are well beyond their most productive years, and cocoa farmers are getting older as well. And, because of climate change, West Africa, which produces 70% of the world’s cocoa, will be much less suited for production by 2030 than it is today. Moreover, what is happening in cocoa today will likely be the norm across other commodities, particularly tree crops, over the next two decades.

Cocoa can't survive in its current form; a new mindset is needed to rehabilitate the sector. To that end, the Markets Institute at WWF is working with key industry players—companies, banks, governments, researchers and NGOs—to help identify collaborative approaches that can be used to rehabilitate existing cocoa plantations.

For example, we are exploring how new business models and finance tools, such as long-term contracts and insurance, can buy down the risk of investing in more sustainable cocoa production. And because cocoa is a huge driver of child labor and deforestation, we are also working with stakeholders to determine how to remove illegality from cocoa supply chain.

At the end of the day, if we can get cocoa right, it could be the example for other sectors as well—not only to feed future generations and protect the environment, but to make smallholder farmers more viable.