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BY KATIE - MYGREENPOD, 02 December '16
Can chocolate get any better?
Almost all Ghana’s cocoa production is destined for export, making cocoa the country’s second most important export commodity after gold.
When Ghana’s cocoa market was liberalised in the early 1990s, a group of visionary farmers spotted an opportunity. They decided to get organised, set up a company and sell their own cocoa to the Cocoa Marketing Company (CMC), the state-owned company that would continue to be the single exporter of Ghanaian cocoa.
With the support of trade development company Twin Trading, these farmers pooled their resources and set up a farmers’ co-op that would trade its own cocoa and manage the selling process rather than relying on government cocoa agents. They called the co-operative Kuapa Kokoo, which means ‘good cocoa growers’.
‘Those who impact positively on the lives of others shall forever live in the memory of the heart.’
Former president of the Kuapa Kokoo Farmers’ Union
PA PA PAA
Ghana – the world’s second largest cocoa producer after Côte d’Ivoire – is famed for the high quality of its cocoa beans. Kuapa Kokoo’s motto is pa pa paa, which means ‘the best of the best’ in the local Twi language.
Kuapa Kokoo weighs, bags and transports the cocoa to market and carries out all the necessary legal paperwork for its members. It doesn’t cheat the farmers by using inaccurate weighing scales, as other buying agents often do, and the savings generated by the co-op’s efficient operations are passed on to its members. Its premium quality cocoa is now sold to chocolate companies around the world and trades at a premium on the global market.
The benefits Kuapa gains for its members – not to mention the transparent, accountable and democratic way it does business – mean more and more farmers are attracted to the association: it now has over 85,000 members organised in thousands of societies.
All these farmers are empowered to gain a dignified livelihood, increase women’s participation in Kuapa’s activities and develop the environmentally friendly cultivation cocoa.
A FARMER-OWNED BAR
During their 1997 annual general meeting, the cocoa farmers, who were already receiving a Fairtrade price from some international customers, voted to invest in a chocolate bar of their own. Rather than aiming for the niche market where most Fairtrade products are placed, they decided to produce a mainstream bar to compete with chocolate from other major brands in the UK.
Twin and Kuapa helped to set up The Day Chocolate Company in 1998, with the enthusiastic support of The Body Shop, Christian Aid and Comic Relief. The company was named in memory of Richard Day, a key member of the team at Twin that had helped Kuapa Kokoo develop its organisation.
The Department for International Development pulled out all the stops to guarantee Day’s business loan, and NatWest offered sympathetic banking facilities.
Divine Fairtrade milk chocolate, made from Kuapa’s best fairly traded cocoa beans, was launched in October 1998, using a new business model that meant the co-operative of Ghanaian cocoa farmers owned a share of the company that made the chocolate.
This first ever farmer-owned Fairtrade chocolate bar aimed at the mass market was on UK supermarket shelves by Christmas that year.
The Divine bar’s success is underlined by the fact that Day Chocolate changed its name to Divine Chocolate Ltd on 01 January 2007.
The farmers’ ownership stake was a first in Fairtrade chocolate; it means Kuapa Kokoo has a meaningful input into decisions about how Divine is produced and sold. Two representatives from Kuapa Kokoo are directors on the company’s board and a quarter of the board meetings are held in Ghana.
In 2006 The Body Shop decided to donate its shares in the company to Kuapa Kokoo members and in 2015 Divine merged its UK and USA businesses. As a result, the farmers’ co-operative is now the largest shareholder in a much bigger company, with a 44% stake in a profitable business with a £12m turnover.
In a ferociously competitive chocolate market worth almost £4bn in the UK alone, being the new bar on the block can be a daunting prospect. There are hundreds of chocolate brands available in the UK, and the biggest companies spend up to 10% of their profit margins – tens of millions of pounds – in their fight to retain their brands’ positions in the Chocolate Top Ten.
But these challenges bring potential for huge success.The UK has one of the highest per capita levels of chocolate consumption in the world; capturing even a small portion of this market would allow Divine to deliver real benefits to cocoa farmers.
In the summer of 2007, having paid off original debts and loans, Divine Chocolate’s chairman took great pride in handing over the first dividend cheque to the co-operative.
‘A LOVELY IDEA’
During an interviewed in early 1993, a commercial affairs representative of the Government of Ghana said the goal to create a new chain between farmers and the export market was ‘Just a lovely idea. But it cannot be done.’
Today Kuapa Kokoo proudly produces up to 5% of Ghana’s cocoa – which can be up to 640,000 sacks of cocoa a year. The farmers have grown the co-op’s membership and worked on internal systems to better manage and track it.
The Fairtrade premium has been invested in farming communities and farming skills, and improving standards of living by addressing water, health, education and sanitation issues.
Kuapa Kokoo has also taken a lead on addressing child labour, and is piloting a number of environmental initiatives aimed at improving productivity and adapting to climate change.
The co-operative’s incredible success is the result of a farmer-led response to liberalisation. It goes to show that great – and unexpected – things can be achieved when old systems are given a good shake up.