Rolling out climate smart Cocoa through public-private partnership in Ghana: A Framework highlighting the step-by-step procedure towards climate smart cocoa finance in Ghana

The cocoa industry has been the mainstay of the Ghanaian economy over the years through the provision of revenues from foreign exchange earnings and the generation of employment for farmers who are mainly small holders. Climate change is a phenomenon that has been taking place throughout history but over the last century it has accelerated and scientists believe it is increasingly due to human activities (Cook et al, 2016). The climate in Ghana has likewise been affected and it is having an impact on agricultural production and therefore cocoa. Thus, cocoa farming areas have been delineated into three climatic impact zones – Cope, Adjust and Transform. The Consultative Group for International Agricultural Research (CGIAR) through the International Institute of Tropical Agriculture (IITA) in Ghana together with the Rainforest Alliance has recently documented and aligned Climate Smart Cocoa practices across the three impact zones to help farmers mitigate the effects of climate change. This document is a step-by-step process to facilitate the partnership among public and private sector financing of Climate smart cocoa (CSC)

Unlocking Barriers to Adoption and Scaling of Climate Smart Cocoa Practices in Ghana

Cocoa production in West Africa has been adversely affected by climate change at varying degrees. The cocoa farming areas in Ghana vary according to severity in impact of climate change and has been delineated into three climatic impact zones namely; Transform, cope and adjust zones. For years, cocoa industry technical experts have recommended Good Agricultural Practices (GAPs) without considering the different farmer typologies across the climate impact zones. The Consultative Group for international Agricultural Research (CGIAR) through the International Institute of Tropical Agriculture (IITA) in Ghana recently documented and aligned climate smart cocoa (CSC) practices across the three impact zones to help farmers mitigate against the effect of Climate change. The aim of this study was to identify farmer typologies in the different climate impact zones and how this affect adoption of CSC recommendations. Data was collected using semi-structured questionnaire from 270 cocoa farming household on socio-economic characteristics and intensity of CSC implementation across. Preliminary findings from a principal component analysis using the R software statistical package showed three cluster of Cocoa farmers in the impact zones. The results also show varying intensity of implementation of CSC practices which determines the efficiency of the clusters. The first cluster of cocoa farmers is characterized as the least efficient in production in terms of Cocoa productivity (248.2793 kg/ha) and Cocoa income (USD 981.3244 per annuum) while the second cluster of farmers are the most efficient with the highest cocoa income (USD 3000.309 per annum) and Cocoa productivity (583.6498 kg/ha). The third Cluster represent farmers with the most resources in terms of land under cocoa (3.7 ha) and hired out labor (≃4 people from the household). In all clusters, access to hybrid seedlings, financial challenges and extension service delivery were identified as challenges hindering adoption of CSC recommendation. It is recommended that farmer typologies aligned with CSC recommendations in the climate impact zones should be taken into consideration for effective adoption

Stepwise Climate-Smart Cocoa pilots in the cope and adjust climate impact zones

As part of efforts in developing a business case for investing in climate-smart cocoa (CSC) practices, IITA has partnered with Public and Private sector organizations (PBC and CARGILL respectively) in the cocoa industry to co-learn on tailored made climate-smart cocoa practices in Ghana. A collaboration agreement has been signed between IITA and the companies to run CSC pilots for a period of 12 months. The end goal is to introduce farmers to the CSC practices through a co-learning process and to co-generate CBA data on each CSC practice through the establishment of stepwise CSC Pilots in two cocoa climate impact zones. This is expected to enhance the adoption and scaling-up of climate-smart cocoa by the companies and other stakeholders in the cocoa industry

Adoption of Climate-Smart Cocoa practices in the adjust and cope climatic impact zones of Ghana

Cocoa (Theobroma Caocao) remains an important crop to the Ghanaian economy, due its historical contribution to revenue, foreign exchange and the creation of direct and indirect jobs. The sector however continues to face production challenges such as aging cocoa trees, reduced soil fertility, pest and disease infestations and recently the effects of climate change. These threaten the productivity and sustainability of cocoa in Ghana. The introduction of Climate Smart Cocoa (CSC) practices for designated climate impact zones in Ghana thus offer significant avenue for improving productivity and livelihood of cocoa farmers (IITA, 2019). Promoting the adoption of Climate Smart Cocoa (CSC) practices among farmers is central to sustaining the crop, improve livelihood and resilience of farmers, and mitigate the emission of greenhouse gas (GHG) (Bunn et at., 2019). Although cocoa farmers are being introduced to CSC practices, their adoption is likely to be influenced by various factors. In Ghana, Akrofi-Atiotianti et al. (2018) established that factors such as the age and location of farms, farmers’ age, residential status and access to extension services influences adoption of Climate Smart Agriculture (CSA) by cocoa farmers. Another key variable relevant to the adoption of Climate Smart Cocoa practices is timely access to weather information by cocoa farmers. The provision of weather stations data to famers can assist them to identify climate trends and improve their climate change risk assessments (UTZ, 2016). Such weather information can be made available to farmers either through the sharing of information within farmer groups or through mobile phone applications. This report presents the factors that influence CSC adoption among selected cocoa farmers in two Climatic Impact Zones in Ghana. It also established how critical farmer access to weather information influences cocoa productivity. Such studies will advise policy makers and help initiate practicable strategies that will facilitate the successful adoption of these practices by farmers. The CCAFS CSC( IITA and Rainforest Alliance) project team adopted the 5Q approach to rapidly access CSC adoption rates among cocoa farmers across two climatic impact zones ( Cope and Adjust ). The main aim was to see if the stepwise CSC Approach being promoted was yielding the desired results and to understand cocoa farmers perceptions on what these gains could be. A Semi-structured questionnaire was administered to 200 cocoa farmers all of whom are part of CSC trials in 4 cocoa growing communities across two climatic impact zones ( Cope and Adjust ) managed by AGRO ECO . This brief report encapsulates the CSC adoption rates and farmers perceptions on the benefits derived from CSC

Policy document detailing the use of the stepwise investment approach for Climate-Smart Cocoa adoption by farmers and companies

"The International Institute of Tropical Agriculture (IITA) and Rainforest Alliance (RA), in conjunction with its partners The International Center for Tropical Agriculture (CIAT), The Sustainable Food Lab (SFL) and Root Capital (RC) through the Climate Change Agriculture and Food Security’s (CCAFS) Phase 1 (2015-2018) on Mainstreaming Climate Smart Cocoa (CSC) project laid the foundation for this second phase of CCAFS. Under phase one, a lot of progress was made which led to the development of the climate exposure maps for Ghana’s cocoa sector and the recommendation of site-specific Climate smart Agriculture practices for the cocoa sector which recently being used by the Ghana COCOBOD as basis for the development of a climate smart cocoa standard. This novel approach to climate resilience, mitigation and adaptation in the cocoa sector promises to be the anchor towards sustainable production of the crop and the results of which can serve as a model for other crops in the region and beyond. What is lacking is the industries inability to push for the institutionalisation of these CSA packages (WCF Climate Smart cocoa Manual) in the training programs of companies and other certification bodies. There is also very limited data on the stepwise approach for climate smart cocoa and the need to establish a business case for CSA investment in both the cope and adjust zones. This document serves as a policy guide to help companies and cocoa sector stakeholders to adopt the use of the proposed stepwise Investment pathway using climate smart cocoa practices

Synthesis of lessons-learned in successful scale-out of Climate Smart Cocoa through the private sector in Ghana

CCAFS II Cocoa project was initiated in 2019 to consolidate the gains of CCAFS I on Mainstreaming Climate Smart Cocoa Value Chains. The focus of CCAFS 1) Conduct a detailed cost-benefit analysis (CBA) of the CSC packages and augment that with return on investment on these practices to inform specific policies/actors on impact lending in cocoa; 2) Co-generate CBA data for CSC packages with the private sector on the stepwise approach to influence a sector-wide policy strategy on Climate-smart cocoa by re-engaging both public and private sector companies; 3) Develop a framework to institutionalize a stepwise investment approach for cocoa extension delivery and voluntary standard programs under certification. This infographic highlights the lows and the highs of implementing CSC through the private sector lens and provides insights to others enrolling in this type of endeavor

Farmer Training and coaching has increased the knowledge and implementation of Climate Smart Cocoa Practices among over 1000 cocoa farmers in Ghana

Farmer interviews indicated that all beneficiary farmers have become aware of the CSC recommendations. Field surveys from the Cope and Adjust zones show that the 1113 farmers coached in the climate smart cocoa have implemented practices at various levels. Each farmer has implemented at least 2 climate smart cocoa recommendations in the establishment and management of their cocoa farm. Farmers who implemented CSC practices observed 30-35% increase in the survival rate of transplanted cocoa seedlings. This implies that the implementation of the CSC recommendation has help cocoa seedlings to thrive in both zones in Ghana

De-risking Lending in Ghana’s Cocoa Sector to Promote Climate Smart Cocoa Adoption – Proposed Framework

Cocoa is important raw material to the global chocolate industry (Financial Times, 2015). Globally, between 40–50 million people depend on the cocoa sector for their livelihood (Beg et al., 2017). In Ghana, the crop remains a key source of foreign exchange and contributes about 13% to gross domestic product (GDP) (Aboah et al. 2019; Asubonteng et al., 2018). Export earnings from cocoa is about 30% (Monastyrnaya et al., 2016). In terms of employment close to 30 % of Ghana’s population derive their income from the sector’s Supply Chain (Anthonio and Aikins, 2009; Gockowski et al., 2011). To increase the output of cocoa, smallholders tend to engage in area expansion rather than intensification which leads to clearing of total forest (Jagoret, Deheuvels & Bastide, 2014). This practice has led to a significant reduction in the volume of forest cover in Ghana thereby rendering the sector susceptible to climate change effects. Although the cocoa sector faces hydra-headed challenges, climate change tends to increase the vulnerability of the smallholder farmer (Fountain & Huetz-Adams, 2018). Climate change is a phenomenon that has been taking place throughout history but over the last century it has accelerated, and scientists believe it is increasingly due to human activities (J. Cook, et al, April 2016). To ameliorate these challenges the smallholder farmer needs to adopt sustainable production systems that guarantee a decent livelihood for family farmers while avoiding practices that are detrimental to the environment (Amiel Lauran, & Muller, 2019). To reduce the impact of climate change on the Ghanaian Cocoa Sector, the Consultative Group for International Agricultural Research (CGIAR) through the International Institute of Tropical Agriculture (IITA) in Ghana together with its partner, Rainforest Alliance has recently documented and aligned Climate Smart Cocoa practices across the three impact zones (Cope, Adjust and Transform) to help farmers mitigate the effects of climate change. However, to achieve this, the adoption of improved agricultural and climate-smart practices must be promoted in the sector. Access to Financing CSC activities by the smallholder farmer is a critical challenge to promoting and sustaining the adoption of CSC practices among cocoa farmers in Ghana. The lack of finance will increase the use of traditional methods of adaptation to climate change (Abraham & Fonta, 2018). While the agricultural sector in Africa is constrained by numerous challenges, finance remains a critical cross-cutting factor. It remains a critical policy challenge in most sub-Saharan African countries since creating assess will serve as a stimulus to the adoption of improved technology by the smallholder farmer in most developing economies. Agricultural finance is fundamental to the adoption of improved inputs and technologies among smallholders. By creating access to finance, we promote the use of productivity-enhancing inputs like fertilizer, improved seeds, pesticides, and investment in long-term new technologies (Balana & Oyeyemi, 2020; Twumasi et at., 2019). The lack of finance or credit will therefore limit the use of high-yielding technologies and varieties (Njagi et al. 2017). Specifically, access to finance improves smallholder investments in productivity-enhancing farm inputs or agro-processing equipment which results in increased productivity, higher-value products, diversity of agricultural production that drives economic growth. This notwithstanding formal sector lending to the sector remains low in most of these countries, for example, the share of commercial bank lending to agriculture in Africa ranges from 3 percent to 12 percent. Specifically, in countries like Sierra Leone and Ghana commercial bank lending to Agriculture is estimated at 3 and 4 percent respectively. Other countries like Kenya, Uganda, Mozambique, and Tanzania have 6, 8, and 12 percent respectively. Credit market failures constrain the optimal adoption of new technologies (Makate et al., 2019; Ogada et al., 2014) including Climate Smart Agricultural (CSA) practices. Smallholders tend to rely on their own income (i.e., on-farm and off-farm) to finance their productive activities (Adjognon et al., 2017). The irregular and inadequacy of own income make it difficult for the smallholder to invest in farm enterprises that thrive on new technologies and practices (Birdle et al., 2020). Again, with technologies that require high up-front investments, adoption remains out of reach for households with limited cash (D’Souza & Mishra 2018; Chhetri et al., 2017). Although some CSA practices can be accommodated within the production systems of smallholders without requiring external funding (Asfaw et al. 2014; Di Falco et al. 2012), the lack of finance will jeopardize the adoption of resource-driven CSA practices among smallholders (Carter et al., 2016; Conradt et al., 2015). The average production cost of farmers practicing CSA cocoa production is higher (GHS 920-USD 242) compared to the conventional cocoa production (GHS 621-USD 163) system in Ghana Akrofi-Atitianti et. al., 2018). For such farmers, labor constitutes the largest cost component for about 51% of total cost compared to 42% for conventional production (Akrofi-Atitianti et. al., 2018). By developing innovative financial mechanisms will promote the adoption of Climate Smart Agricultural practices in the Ghanaian cocoa sector. Promoting the take-up of CSA technology cocoa farmers will produce higher output per hectare with an average value of GHS 2786 (USD 733) compared to GHS 1978 (UD $521) for conventional cocoa (Akrofi-Atitianti et. al., 2018). IITA and the Rainforest Alliance developed this blueprint to provide a step-by-step process to complement the climate-smart cocoa practices and enable the financing of climate-smart cocoa in Ghana and it is the result of the assessment of the current agriculture finance sector with a major focus on cocoa

Impact of Stepwise Climate-smart cocoa practices on beneficiary farmers-under CCAFS project in Ghana (Project endline)

This report is an end-line study report of the International Institute of Tropical Agriculture (IITA) project titled “Climate Smart Cocoa and its influence on voluntary standards and Impact lending in West Africa”. The project in Ghana focused on introducing cocoa farmers to Climate-Smart Agriculture (CSA) practices using a “stepwise approach” which is termed “Stepwise Climate Smart Cocoa practices”. The study sought to ascertain the level of acceptance and adoption of the stepwise climate-smart cocoa (CSC) practices within the project implementation areas in Ghana. Analysis of data from 1113 project targeted farmers using descriptive statistics and regression analysis showed that adoption of CSC practices is very high among farmers (Over 98% of farmers are aware and carrying out CSC practices) because of the project pieces of training and 99% of farmers stated that CSC practices are beneficial. The majority of farmers (53%) who were directly trained on stepwise CSC practices went on to train colleague farmers who were not part of the project partners’ Farmer Business Organization. The factors that influenced the adoption of stepwise CSC practices are the age of the farmer, level of education of the farmer, cocoa farming experience, household size, walking distance to the farm, and land size. The majority of farmers are willing to pay for CSC practices at a cost ranging from GHS 100.00 to GHS 480.00. Few farmers (3%) expressed having challenges with the adoption of CSC, relating this to financial difficulties with affording practices, tiredness in carrying out practices, the time-consuming nature of carrying out practices, and the fear of adoption

CCAFS Climate Smart Cocoa Baseline Survey Report-Ghana (Introduction of stepwise climate smart cocoa practices to farmers)

The International Institute of Tropical Agriculture (IITA) and the Rainforest Alliance (RA) have developed improved practices for climate-smart agriculture in the cocoa sector, summarized under the term climate-smart cocoa (CSC) and is carried out as part of the CGIAR research program on Climate Change, Agriculture and Food Security (CCAFS). In phase 1 of the CCAFS project on CSC, climate exposure maps for Ghana’s cocoa sector and site-specific recommendations for climate-smart agricultural practices were developed and adopted in 2019 the Ghana COCOBOD as a basis for the creation of a national climate-smart cocoa standard. Furthermore, a stepwise investment pathway towards CSC was developed to provide farmers with tangible investment packages allowing them to optimize their resource use. This novel approach to climate resilience, adaptation, and mitigation has a high potential to foster sustainable cocoa production in Ghana while positively impacting farmers’ livelihoods. This approach can also serve as a model for other crops in the region. The current challenge is to mainstream the CSC practices across the sector because the cocoa industry struggles to institutionalize CSA packages in training programs of companies and certification bodies. In addition to that, more data on the stepwise approach for climate-smart cocoa is needed to be able to establish a business case for CSA investment in both, the adjust and cope zone. These challenges are being addressed in phase II of the CCAFS project on climate-smart cocoa