Public-Private Partnership Design for Inclusive Cocoa Global Value Chains in Ghana
Abstract
Within 10 years, there could be a severe global shortage in the supply of cocoa, according
to industry practitioners and other experts. Due to global population growth and
the emergence of a growing global middle class, by 2025 the cocoa crop would need
to increase by nearly 50 per cent to keep up with projected demand. A potential shortage
of supply is a direct threat to the business model of lead firms – including cocoa
grinders and processors, chocolate confectioners, and retail distributors.
But these international firms – the ones that will suffer the most if there is a shortage
of cocoa supply – are helping create the market failure that is stifling sustainability.
Functioning as a two-tiered consolidated oligopoly with a combined market share of
approximately 89%, these firms enjoy the largest portion of value capture in the cocoa-chocolate
global value chain (GVC). The smallholder cocoa producers, conversely, are trapped
in low value-add segments of the GVC. In fact, most smallholder farmers survive on
less than $1.00 per day per capita, on average in many cocoa exporting countries.
In Ghana - the second largest producer of cocoa in the world - the government has
accomplished little to help these smallholders upgrade and make cocoa an attractive
sector for the next generation to inherit. The result – both in Ghana and around the
world – is a lack of sustainability of the supply of cocoa. Demand is already beginning
to outstrip supply.
As a result of these underlying circumstances, the United States Agency for International
Development (USAID) has posed the following policy question:
"Under what conditions could USAID, as a development agency, support and enhance potential
public-private partnerships in order to improve the bargaining power (and financial
wherewithal) of smallholder organizations and farmers in the context of the global
value chain for cocoa in Ghana?"
Type
Master's projectDepartment
The Sanford School of Public PolicySubject
Public Private PartnershipsGlobal Value Chains
Cocoa
Ghana
Inclusive International Development
USAID
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https://hdl.handle.net/10161/12408Citation
Harris, Bahari (2016). Public-Private Partnership Design for Inclusive Cocoa Global Value Chains in Ghana.
Master's project, Duke University. Retrieved from https://hdl.handle.net/10161/12408.More Info
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