The Ivory Coast: A case study on climate change and the chocolate we eat

The Ivory Coast has featured prominently in this year’s commodity news with reports of cocoa shipments falling far below levels of previous years. This week, Reuters reported that cocoa port arrivals dropped a dramatic 16% year-on-year since the start of the season last October. A series of recent reports have linked unseasonably dry weather to the sharp decline in grindings and exports. In particular, the Harmattan winds that blow from the Sahara southward across much of West Africa have been unforgiving to this season’s harvest. Industry expectations are for the trend to continue into the next growing season mainly due to low rainfall. Not only have volumes been affected, but quality as well with smaller average bean size and high acidity being reported. As a consequence, exporters have turned away as much as half of arriving volumes. The socioeconomic impact of this damage on the country’s smallholder producers has been extensive.

The Ivorian case is emblematic of supply-side challenges being faced worldwide by the cocoa industry. As the world’s largest producer, what happens in the Ivory Coast will have repercussions felt by chocolate consumers everywhere. This article reviews some of the proximate causes as well as the fundamental driver behind the crisis.

In June, a group of researchers at the International Center for Tropical Agriculture published an article examining the impact of climate change in West Africa’s cocoa belt and the results are cause for dismay. The authors predict both increased precipitation and temperature extremes during the dry season. They identify the forest-savanna transition zone to be the most vulnerable, predicting 87% and 57% drops in suitable growing areas in Nigeria and Ivory Coast, respectively, by 2050.

Relative climatic suitability (in percent) for cocoa of the West Africa cocoa belt

Relative climatic suitability (in percent) for cocoa of the West Africa cocoa belt (Source: CIAT)

Although it is difficult to draw a causal link to climate change, farmers in the Ivory Coast recently reported a mass caterpillar invasion that has affected around 17,000 hectares of growing areas. (Link: video). The extent of the damage and the potential spread of the caterpillar have yet to be fully understood.

Another effect of shifting weather has been the conversion of cocoa acreage to informal mining operations as pits are torn directly into cocoa fields to extract gold. In other cases, cocoa farmers are being drawn from parched farms to the mining regions, leaving trees abandoned.

An informal miner on a cleared plot (Source: AFP)

An informal miner on a cleared plot (Source: AFP)

Against this backdrop, ethnic tensions are simmering as thousands of Ivorian refugees return to their homes only to find the farms occupied by newcomers, often from other regions, in the wake of the country’s 2010 civil war. Many settlers include migrants from neighboring countries that have also been subject to a changing climate. The government’s efforts to adjudicate disputes through the issuance of land title have been woefully inadequate; overall, land tenure remains precarious. In such legal limbo, farmers are understandably reluctant to make needed investments in their orchards.

Displacement and the resulting resource conflicts have manifested themselves in widespread squatting across the country’s remaining protected forests. Experts estimate that the Ivory Coast has lost 80% of its forested area since 1960. Forest clearance continues largely unabated and cocoa farming is pervasive on such plots. Experts believe as much as one third of the country’s cocoa may originate from protected areas.

Burnt cocoa farm in a protected area (Source: Reuters)

Burnt cocoa farm in a protected area (Source: Reuters)

This has pitted human livelihoods against the survival of endangered species, including the pygmy hippopotamus and chimpanzees, endemic to these forests. Taking a more muscular approach, authorities forcibly evicted thousands cocoa farmers from these lands. The removal of over 50,000 people from Mont Peko National Park alone may take 10,000 tons of cocoa off the market in short order and is likely to further inflame tensions. Human rights groups have raised the alarm that the evictions have been linked to the illegal destruction of homes, intimidation, extortion and even murder.

Taken together, these factors paint a picture of long-term secular decline that will not be easily resolved by a year or two of plentiful rainfall. Even more concerning is that these trends are not unique to the Ivory Coast. Recent weather patterns attributed to El Niño have adversely affected production from Brazil to Indonesia. While laudable, private and public sectors efforts to combat the effects of climate change would seem to fall short given the magnitude of the problem.

One of the recommendations posed by the CIAT researchers is the adoption of agroforestry systems: “…in view of the relatively high rainfalls and short dry season in this area, the conditions for managing the projected increase in maximum temperatures through the systematic use of shade are particularly good. Cocoa could be grown here in multi-strata agroforests under a canopy of useful trees creating their own microclimate…” (Source: CIAT) Such systems are effective in buffering temperature extremes, modulating humidity, and reducing erosion caused by heavy rainfall. They are also intensive in their capture of carbon dioxide. While cocoa may be the proverbial canary in the mine, agroforestry systems, including those that produce cocoa, will undoubtedly play a role in any serious response to a changing climate.

Update – 15 Sept. 2016

Today, the Wall St. Journal published an article entitled “Cocoa Production Could Be Devastated by Climate Change, Experts Warn,” drawing attention to the potential impact of climate change on cocoa production worldwide. Genetic diversity and the development of new varieties drawn from a broader gene pool is cited as an important part of the response:

“To make cocoa crops more resilient, the industry needs a greater long-term focus on genetic diversity, which will allow plants to better withstand and adapt to changes in climate, said  Brigitte Laliberté an expert on cocoa genetic resources at Biodiversity International, a global research-for-development organization. Genetic diversity in the West African region is low, she said, and while a focus on better agricultural methods can help yields in the short term, in the long term there must be better research and funding for breeding more resilient varieties, she said.”

The lack of genetic diversity makes African cocoa inherently more vulnerable to pests and disease that can be spawned by changes in humidity and temperature vis-a-vis Latin America cocoa farms whose natural genetic pool is more diverse. This point certainly underscores the importance of avoiding monoculture around a handful of clonal selections; embracing endemic varieties; and employing agroforestry systems to enhance the species’ natural resilience.

Update – 16 Sept. 2016

Outcries have mounted over the government’s handling of the Mont Peko evictions with Human Rights Watch issuing a scathing statement:

“International law protects anyone who occupies land from forced evictions that either do not provide adequate notice or do not respect the dignity and rights of those affected, regardless of whether they occupy the land legally.”

Now homeless, thousands of former squatters have been driven into neighboring villages that lack the resources to accommodate them.

Bloomberg reported today that the impending cocoa shortage is likely to worsen over the remainder of the current season and into the next. By one measure (stockpiles-to-grindings), the market is at its tightest in 30 years with cocoa butter in particularly short supply. The head of Olam International’s cocoa division (the company is the world’s 3rd largest processor) stated:

“The light crop has just been a disaster in Ivory Coast and the Indonesian crop has been much smaller than we thought… We are seeing acute shortages in Asia, acute shortages in America, acute shortages in Africa… You are not really going to catch up with that deficit until the latter part of next year. And for that, you are going to need not only good main crops, but above-normal mid-crops.”

Heading into the peak Halloween and Christmas demand period, it seems likely that the scarcity will be felt by consumers and producers alike.

 

 

Pay your cacao farmer well!

Cocoa beans from a Theobroma cacao tree

Cocoa beans from a Theobroma cacao tree

There is a troublesome trend in the farm world; small farmers are throwing in the towel and big farms are getting bigger.  Naturally, these massive operations have effects on the environment, food costs, human health, communities, and more.

This year we had an experience that made this trend personal.  To be honest, we’ve had an awful harvest when we didn’t expect it.   As a medium scale operation, the income that our harvests bring can be a critical element to our financial sustainability.    We want to do things right, and that costs money.

Last November when our “winter” harvest usually comes in we had a series of weather phenomenons that threw a big fat wrench into our cacao efforts.  Climate change for us, has felt very real this year.  In fact we estimate a 70% decrease in production when compared to last year.  Thankfully we have good clients and we’re diversified; for example we’ve been able to sell lumber and services to make up the difference, but what about the small farmer?  How does one who already lives marginally cope with these situations?  Does he/she give up to go work for the industrial farms?

Most Cocoa farmers, the majority of whom live in West Africa, live in poverty.  In Guatemala, where most of the cocoa is grown by cooperatives, the socio-economic situation is not bad, but its still marginal.

IMG_5149

For the poor farmer that eeks out an existence and is burdened with the risks of climate change and commodity prices, something has to change.  And part of that is to address the value chain and to recognize that we can pay our farmers a little bit more given all of the warmth and goodness that chocolate brings us.

Recently Izabal Agro-Forest conducted a market study for cocoa and found that a substantial increase in the commodity price for cocoa who would have almost no price effect on the consumer, which is crazy!  What the message here?: Let us pay our farmers more:

Andrew Miller (of IAF & Big Leaf) comments:

“Higher cocoa prices need not result in proportionally higher chocolate prices as cocoa represents just 5% of the retail price (see table below). Even if this percentage were to double to 10% in 2020, as projected by Euromonitor, chocolate prices could remain roughly flat.”

Screen Shot 2016-01-10 at 11.24.37 PM

Small to medium sized chocolate makers generally understand that quality and social sustainability are critical elements of supporting good quality cacao and its farmers.  We just need the industrial guys to catch on.

Pay your farmer well!

IMG_8812

 

IMG_5123

IMG_5061

The Final Warning Bell

In Brazil deforestation repesents 70% of the country’s carbon emissions (photo courtesy of the WWF)

The final warning bell has been rung by a UN Climate Change report.  The ongoing destruction of the remaining tropical rain forests and the advance of the pine beetle into the extreme north has contributed to 1/5th of the carbon being delivered into our precious atmosphere, much more than all the motorized vehicles, ships and factories on the planet.  Agriculture is the main polluter and negative factor in this equation.  Here in Guatemala, just to mention an example, at certain times of the year, the burning of the cane fields on the Pacific coast, is enough to darken the sky and cause an ash fall of choking dimensions in nearby communities.

The question is why has forestry not been able to play a more important and sustainable role in mitigating climate change?  One obvious reply is that the global public is kept in the dark by a disinterested media, passive educators and politicians looking only as far as the next vote.

But then what about reforestation companies and the forest investment companies?  Why are they not playing a greater role in the sequestration of carbon and so the salvation of our planet as we know it.  Again the answer is painful:  enormous areas covered by mono-cultures of short term tree crops for mainly pulp or biomass using species (e.g. Pine,Eucaliptus or Melina) that are most often foreign to the tropics with negative effects on the soil.  Sustainable agroforestry is one answer.  India has just passed more progressive legislation that removes many of the bureaucratic restrictions on the planting and use of new forests by farmers,that is expected to increase the forest cover there by millions of hectares.  Both investors, forestry companies and governments need to pay more attention to native forest species for lumber and food while considering the infinite possibilities of sub-canopy planting.

In addition, especially Universities should be playing an important role in environmentally correct reforestation and habitat recovery, but sadly most often their endowment funds invest in mono-cultures and doubtful short term returns, while their scientists preach another story.  It is a dysfunction that every responsible citizen and especially foresters need to urgently correct before we are obligated to send a flotilla of arks to Bangladesh, a country that lies almost entirely at sea level.

– Richard Bronson

Palm monoculture

Palm monoculture in Guatemala

Agrforestry parcel, IAF, Guatemala

 

An energy crisis

Late rains have caused an energy crisis in Panama.  Hydroelectric generators, as with most tropical economies, are this country’s main source of energy; so when weather patterns don’t hold up, the whole system falters: Schools have been closed, A/C prohibited during certain times of the day, public offices have shortened business hours, and rolling blackouts may follow.  People are angry.  A national group of engineers has demanded a government plan for alternative energy, parents are confused and don’t know what to do with their children, and in cattle country, ranchers are demanding subsidies for feed, the problem has affected everyone.

Deforestation means reduced evapotranspiration (evaporation of plants and soil) resulting in both a decrease in rainfall and changing annual rainfall patterns with unusually dry conditions

In a recent newspaper article describing the predicament, the ranchers complain of climate change, expressing frustration at their parched fields and demand government action.  The problem, however, lies at their feet and looking for a bail-out is like sweeping dust under the rug.  Long-term watershed management has to be a part of the conversation.

Latin America’s #1 driver of deforestation is the cattle frontier. Photo credit: Andy Berry

In other words THE essential ingredient for your operation (water), be it agriculture, forestry or ranching is directly dependent on natural forests.  We can assume this (water cycle) process, can happen elsewhere, but there is significant evidence that suggests forests have an effect on precipitation in their immediate area.  (See TED talk ‘How to Restore A Rainforest’.)

There is simply NO conversation about the effects of deforestation on the water cycle.  Trees, brush and spores play an integral cycle in the tropical water cycle.  But because more pasture, means more cattle and more meat, (and therefore money) cattle ranchers will generally clear as much land as possible.  Right to the edges of their land.  It is no secret that the vast majority of deforestation in Central America is driven by the cattle frontier.    The process goes something like this:

1. Sell family plot

2. With the money, buy cheap land in remote areas (usually tree covered)

3.  Extract and sell all and any valuable lumber on property

4.  Burn

5.  Apply herbicide

6.  Introduce/establish hardy exotic grass for pasture

7.  Truck in cattle

8.  Make 2, maybe 3% annual profit

There’s a saying here: “A cattle farmer lives poor and dies rich”.  This isn’t because cattle eventually become profitable, it’s because of land-value appreciation.  And its true, cattle ranchers occasionally end-up owing significant real-estate.  Recently, while pitching an environmental restoration project to a cattle ranching association, a colleague of mine posed the question: what would your land be worth without water?  Unanimously, they all agreed that it would be worth close to nothing.  Interestingly they all understood, from firsthand experience no-doubt, that forested areas have more water and more rain.  The idea then is to convince them that if they can each allocate a small percentage of their holdings to conservation, particularly along waterways, that there is tangible economic upside.  I wrote about this concept in an earlier post.  Its an uphill battle I’m sure, but based on the receptive conversation I think these situations do make people reconsider their role climate change .   Conversation about drought, particularly in the tropics, must include reforestation and conservation.  Governments would do well to incentivize cattle operations that conserve forested areas or employ forward thinking silvo-pastoral systems instead of exacerbating the problem by buying them transported feed, or subsidizing beef.