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A larger piece of the cake for Ghanas' cocoa farmers? - Redistributing value through the Living Income Differential

Bartel, Kurt LU (2022) SIMZ31 20221
Graduate School
Abstract
Many cocoa farmers, despite their crucial role for the production of chocolate and other cocoa products that many consumers enjoy, struggle to earn a decent income and improve their livelihoods. This thesis analyses the impact of the Living Income Differential, a fixed 400$ price markup added to the per-tonne cocoa price, on the position of Ghanaian farmers in the global value chain. Based on the theoretical foundation of Political Economy, in particular Global Value Chain Analysis, the case study shows how difficult it is for cocoa farmers and the governmental marketing board COCOBOD that represents them, to influence volatile global cocoa prices for pro-poor market development and social upgrading. The insufficient outcome of the LID... (More)
Many cocoa farmers, despite their crucial role for the production of chocolate and other cocoa products that many consumers enjoy, struggle to earn a decent income and improve their livelihoods. This thesis analyses the impact of the Living Income Differential, a fixed 400$ price markup added to the per-tonne cocoa price, on the position of Ghanaian farmers in the global value chain. Based on the theoretical foundation of Political Economy, in particular Global Value Chain Analysis, the case study shows how difficult it is for cocoa farmers and the governmental marketing board COCOBOD that represents them, to influence volatile global cocoa prices for pro-poor market development and social upgrading. The insufficient outcome of the LID implementation is another example for the power imbalances and market dynamics evident in global value chains that constrain the improvement of farmer livelihoods and their communities.
Furthermore, this study examined the role of sustainable production models to maximize farmer benefits and complement price-based approaches such as the LID. The data was collected through 6 semi-structured interviews with high-rank experts and over 100 farmer surveys. The research shows that while both cocoa-buying companies and public regulators are spending a lot of resources on the provision of farm inputs, seedlings, loan and credits schemes, income diversification strategies and agricultural trainings, the challenges to improving farmers' livelihoods and sustainable production systems are great and require long-term and holistic approaches that go beyond current efforts. (Less)
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author
Bartel, Kurt LU
supervisor
organization
course
SIMZ31 20221
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Global Value Chain Analysis, Cocoa Prices, Living Income Differential, Social Upgrading, Ghanaian Cocoa Farmers, Value Distribution, Cost of Production
language
English
id
9098698
date added to LUP
2022-09-20 08:51:18
date last changed
2022-09-20 08:51:18
@misc{9098698,
  abstract     = {{Many cocoa farmers, despite their crucial role for the production of chocolate and other cocoa products that many consumers enjoy, struggle to earn a decent income and improve their livelihoods. This thesis analyses the impact of the Living Income Differential, a fixed 400$ price markup added to the per-tonne cocoa price, on the position of Ghanaian farmers in the global value chain. Based on the theoretical foundation of Political Economy, in particular Global Value Chain Analysis, the case study shows how difficult it is for cocoa farmers and the governmental marketing board COCOBOD that represents them, to influence volatile global cocoa prices for pro-poor market development and social upgrading. The insufficient outcome of the LID implementation is another example for the power imbalances and market dynamics evident in global value chains that constrain the improvement of farmer livelihoods and their communities. 
Furthermore, this study examined the role of sustainable production models to maximize farmer benefits and complement price-based approaches such as the LID. The data was collected through 6 semi-structured interviews with high-rank experts and over 100 farmer surveys. The research shows that while both cocoa-buying companies and public regulators are spending a lot of resources on the provision of farm inputs, seedlings, loan and credits schemes, income diversification strategies and agricultural trainings, the challenges to improving farmers' livelihoods and sustainable production systems are great and require long-term and holistic approaches that go beyond current efforts.}},
  author       = {{Bartel, Kurt}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{A larger piece of the cake for Ghanas' cocoa farmers? - Redistributing value through the Living Income Differential}},
  year         = {{2022}},
}