Last week the World Cocoa Foundation, a membership organization of more than 100 cocoa companies, held its annual partnership meeting in Berlin, Germany. The aim of the meeting is for governments, cocoa companies and farmers to identify and tackle the sector’s largest sustainability challenges. A 90-minute session was devoted to the topic of land tenure. The prominence of the session, as well as the seniority of the presenters – the Head of Sustainable Sourcing for Hershey’s and the Deputy Director General of Cote d’Ivoire’s Land Agency among them – is a powerful signaling effect. The industry is getting more attuned to the problem of land tenure insecurity, and becoming more motivated to work with governments and funders to help solve it.
I was fortunate enough to participate as a speaker in the land tenure session. Here are my remarks:
Thank you to the World Cocoa Foundation for inviting me here today. I’ll get right to the punchline, and there are two punch lines.
The first punch line is that in the cocoa sector, land tenure is not a problem in isolation. Insecure land rights lead to structural adverse outcomes on livelihoods, sustainability, and productivity.
The second punch line is that sometimes land tenure insecurity is hard to put your finger on. It’s a root cause, not a symptom. So when you ask a farmer, what are your most pressing challenges, it is unlikely she will say the words ‘land rights’. She will say that her yields are low, that she isn’t making enough money, or that the fertilizer isn’t working. It is when you ask the second question – why? – that you can begin to see that underneath these problems lies the structural one of land insecurity.
How did I come to these two conclusions? For that, I’d like to take you back a few years, and tell you the story of how I first came to work with the World Cocoa Foundation.
It was 2015, and I was working as part of the land tenure team at USAID. The World Cocoa Foundation approached us with a classic behavioral economics problem: cocoa productivity in Ghana was low, and nobody could figure out why.
As you know Ghana is the second largest producer of cocoa, after Cote d’Ivoire. An estimated 800,000 Ghanaians work as cocoa farmers. And yet, despite significant investments in training, fertilizer, seedlings, and everything else you would expect, productivity in Ghana was falling well behind that of its peers. At the time, productivity in Ghana was on average 400 kg / HA, compared to 1 tonne per HA in Indonesia.
The World Cocoa Foundation had started to piece together that some of the problems that were more easily identified – for example, a lack of uptake of training, lack of investment in farm equipment, or even incorrect application of fertilizer and pesticides – may have something to do with the deeper problem of land insecurity. They wanted our help in getting to the bottom of what was going on.
And so, armed with this hunch, we, WCF, and Ghana Cocoa Board went out to the field to investigate. Our small plane landed in Kumasi on a muggy April day, we immediately jumped in a car and headed to the bush. We made our way through the Eastern, Western and Ashanti regions, meeting with cocoa farmers, asking them about this question of land.
We spoke with farmer after farmer, and at first when we asked about their land tenure, we mostly got blank looks. But as we dug deeper, some patterns began to emerge. I will speak about three of them.
The first thing we found was that farms were not mapped. Or rather, in some cases the farms were mapped by the companies for their own purposes, but the maps were never shared with the farmers. Almost none of the farms were mapped by the government, by Chiefs, or by anyone else.
This caused several problems, the most obvious of which was that farmers had no idea how big their farms were. As a result, they receiving incorrect amounts of fertilizer and pesticide.
Not only that but the Chiefs had no idea how much to charge in ground rent – a type of Ghanaian customary property tax based in part on farm size – and so their revenues fluctuated wildly from year to year. Unable to budget, the Chiefs would sometimes face shortfalls and funding crunches, and would confiscate and resell land in order to make up the gap. As you can imagine, this caused a panic amongst the farmers.
The second thing we found was that much of the land was being farmed by sharecroppers, and these sharecroppers almost never had any sort of lease or written agreement with the landowner. The landowner often lived somewhere far way – maybe in Kumasi, maybe in Accra – and rarely communicated with the sharecroppers. So there were new ground rules for who paid for what, who decided which farm investments to make, and – importantly – how long the sharecroppers could stay on the land and under what conditions.
For example, one sharecropper farmer told us that his grandfather had agreed with the landowners grandfather that the sharecropper could remain on the land “so long as he is virtuous.” The poor sharecropper admitted he had absolutely no idea what the criteria were for being virtuous.
This was not just an anecdotal finding from our interviews: a subsequent study by the Cocoa Research Institute of Ghana found that ¾ of all farmers had no land documentation at all.
So, what happens in these situations? The sharecropper has no certainty that he will be able to remain in the arrangement next year. He has no certainty that if he pays out of pocket to invest in new planting techniques, or better seedlings that he will be around next year to see the fruit. So, naturally, the sharecropper decides to make investments that maximize short-term productivity, sometimes at the expense of long-term sustainability.
This finding is logical and in line with broader research from West Africa. A recent meta-analysis of research across 6 West African countries found that farmers with more secure land rights are 16% more likely to fallow their land.
Our third finding was related to trees. On farm after farm, we saw old, sad looking cocoa trees. In some cases the trees were 50 years old, and were producing only a few plants a year. But for some reason, the farmers refused to cut down and replant the trees. Why, we wondered?
Finally, we got our answer. According to customary Ghanaian rules, if a sharecropper or other worker cuts down a tree, he loses access to the land under that tree. And so the sharecroppers refused to cut down old or diseased trees, even if it was obviously the preferable option for both the sharecropper and the landowner. It was the classic perverse incentive. This was an example of a vague law leading to unintended consequences that the farmers – due to a lack of written documentation – had no way of contracting out of.
This tree tenure insecurity is also a significant contributor to deforestation. A recent USAID pilot with Hershey’s found that because cocoa farmers were afraid to replant old or diseased trees, they were forced to clear new land – sometimes protected forestland – in order to expand their farms.
So in sum, what we found was that these land tenure problems had far reaching and sometimes surprising impacts.
They were leading to a lack of investment in inputs, training and techniques, which in turn was harming productivity. Low productivity had a negative impact both on company profits and of course on the cocoa farmers themselves, who were watching their wages stagnate and fall. It was also leading to farmers – and especially youth – leaving the cocoa sector.
They were also causing farmers to deforest, getting in the way of a key cocoa sustainability commitment.
And, they were getting in the way of financial planning, both on the family and community level. Chiefs couldn’t properly budget because they had no accurate measure for collecting ground rent. And families couldn’t properly budget because they couldn’t be sure they would be allowed to farm the land next year, or the year after that.
This is emblematic of the relationships we see globally between land tenure and a host of development outcomes, ranging from food security to women’s empowerment to conflict avoidance to environmental protection. A recent meta-analysis found that land tenure recognition can lead to a 40% increase in monetary value of production outputs, and a 15% increase in incomes. In Peru, a study found that land titling correlated with at 75% reduction in deforestation. And in Ethiopia, a program to map and register land resulted in a 40% spike in productivity.
Why? Because land, whether it is in Ghana, in Indonesia, in Colombia, or here in Berlin, is likely the most valuable asset that people have. For farmers, it is the key input, more important than anything else. So it shouldn’t be surprising that land rights are key to healthy, productive, and sustainable farming communities.
A final note on solutions. In a way, the solutions are basic – mapping, documentation, contracts. But what is critical is scale. Mapping and documentation is hugely expensive when done piecemeal. These problems must be tackled systematically.
Here, the cocoa companies have something to offer. Your supply chains touch every single cocoa farmer in the world. You have more reach than government and then any NGO. So, I leave you with this question. How can you utilize your channels and networks to help your farmers – the backbone of your business – solve this critical challenge?