Cocoa

Looking at the Benefits of Crop Diversification for Ghana’s Cocoa Farmers

cocoa - hands in beansby Aayush Gupta, Sustainable Finance Summer Analyst 

If you were to suggest to a Ghanaian smallholder cocoa farmer that he clear out a section of cocoa trees to make way for a different crop, chances are he would balk: why remove any of the plants that provide one’s only source of income? But there are several reasons to diversify crops, such as hedging farm revenue against the volatility of cocoa prices.

As a summer analyst with the Rainforest Alliance’s Sustainable Finance Initiative, I conducted a two-month investigation of crop diversification as an intervention strategy for smallholder cocoa farming in West Africa, with a focus on Ghana. After thoroughly reviewing existing literature on the pros and cons of crop diversification, and interviewing local experts, it became clear that some Ghanaian cocoa farmers do diversify—most commonly in the form of shade crops or intercrops at the early stages of the cocoa plant’s life—but the approach is uncoordinated and haphazard. There’s a need to better organise and scale diversification in order to increase cocoa producer livelihood and landscape resiliency—especially in light of the increasing threat to current cocoa yields in the larger West African region.

At the Rainforest Alliance, we’ve developed a preliminary framework to help determine farm and landscape level diversification strategies, taking into account criteria such as farm location and geography, climate change threats and farm age. Additionally, we have developed an analytical tool to help understand the cost and benefits of diversification in the Ghanaian smallholder cocoa sector that can be adapted to other geographies.

Applying this framework and tool to my project, I analysed the environmental and economic cases for Ghanaian smallholder cocoa to diversify into oil palm. While the benefits of crop diversification (such as improved annual revenue streams and reduced exposure from mono-crop production) seem obvious, they’ve been hard to corroborate. I was challenged in my project to scrutinise diversification multi-dimensionally; in fact, the economics, politics and agronomics of considered geographies all have an equal role to play in justifying and creating a diversification intervention strategy.

As we continue to develop our thinking and methodology for crop diversification, we are excited for stakeholders beyond the scientific community—namely governments, donors, and private sector organisations—to join our discussion and propel the potential for producer- and landscape-level impact.

Aayush Gupta is an undergraduate student at NYU Stern School Business majoring in Finance and Economics. Aayush served as a summer analyst with the Sustainable Finance Initiative, funded by the Citi Foundation, after winning the Rainforest Alliance- NYU Stern Cocoa Investment Challenge with his classmate Jessica Guo.

One thought on “Looking at the Benefits of Crop Diversification for Ghana’s Cocoa Farmers

  1. Pingback: Faces of Climate Change – Part Two | The Frog Blog UK & Ireland

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