Author (s): Christian Bunn, Felix Schreyer and Fabio Castro
Affiliated organization: International Center for Tropical Agriculture (CIAT)
Type of publication: Report
Date of publication: 2018
Ivory Coast and Ghana make up the world’s most important region for the supply of cocoa beans. The two leading producers contributed about half of global cocoa production by 2014. The sector is of vital importance for the rural economy in both countries, adding an estimated 7% and 3% of total GDP in Ivory Coast and Ghana respectively. About 1.5 million households are involved in growing cocoa in the two countries. The rise of the cocoa sector has been a key driver for alleviating rural poverty. The poverty rate among cocoa farmers in Ghana has declined from 60% in 1991/92 to 24% in 2005. However, especially in Ivory Coast poverty among cocoa farmers is still a major issue as an estimated 60% lives below the poverty line. Both countries seek to enlarge future production and count on cocoa as a main driver of future growth and development.
Recent studies suggest that cocoa farming in Ivory Coast and Ghana will face serious risks from climate change in the next decades.
Temperature increase has both a direct and indirect effect on the cocoa tree. Photosynthetic rates depend not only on temperature itself but, above all, on constant water supply. Due to increased evapotranspiration temperature rise has an indirect effect on humidity.
Adaptation to climatic changes is often perceived as a costly intervention, while inaction is assumed to be cost free. Climate projections show a considerable degree of uncertainty about precipitation changes which is the factor that is most influential for yields.
Yet, smallholder cocoa farmers often rely on knowledge from acquired from past experiences on how to cope with weather conditions. Those traditional practices have been observed to fail more and more in recent years. Thus, without adaptation any change in climate can be considered disadvantageous to them as historic knowledge becomes less useful. However, as there is no major shift in climate zones, the production losses will be relatively small.
We assumed systemic adaptation would save 30%, 40% or 50% of cocoa production annually in the respective regions depending on the impact scenario compared to today. In zones of systemic adaptation, the projected risks from temperature increase will be aggravated by a shift in climate zones.
Thus, a farmer of the Eastern region who is used to a relatively long dry season, might be confronted with the hot and wet climate of the Western region characterized by a much shorter and weaker dry season. Even though these conditions are generally more favorable for cocoa, different farming practices will be required in the face of altered climatic and biological stresses. For instance, a wetter and shorter dry season may demand shifting the cropping calendars and adjusting the amount of shading optimal for the cocoa tree.
Depending on their capacity to autonomously transform away from cocoa under unfavorable climate, we estimate the income losses without adaptation at 60%, 80% or 100% compared to today. Transformation zones are projected to become unsuitable for cocoa by the 2050s. Following previous research, we expect transformation zones mainly in the forest-savannah transition zones at the Northern margin of the cocoa belt in both countries. Negative climate impacts on cocoa cultivation have already been observed in the forest savannah transition zone in Ghana: Farmers reported, for instance, a shift to prolonged dry periods associated with higher incidences of pests and diseases.
Climate change must therefore be understood as an additional risk in a region where low productivity and environmental problems already pose serious challenges to cocoa farming
The example furthermore demonstrates that cocoa farmers autonomously diversify and substitute their formerly cocoa-generated income by other means as cocoa becomes unsuitable. However, the cocoa farmers from the survey by Asante et al. emphasized major economic difficulties during and after the bushfire period. Maize farming is not considered as profitable as cocoa which is why despite unfavorable climate conditions farmers have meanwhile returned to cocoa. This shows that, although farmers may find alternative income sources, transforming away from cocoa without institutional support will likely cause considerable economic hardship. As poverty among cocoa farmers in Ghana and Ivory Coast continues to be a major challenge, livelihoods in future transformation zones will be particularly vulnerable.
Finally, depending on whether autonomous adaptive capacity is low, moderate or high, we therefore assume that planned adaptation would generate gains equivalent to the amount of cocoa cultivated at yields of 230 kg/ha on 10%, 15% or 20% of the area in opportunity zones. Some regions were projected to become suitable for cocoa in the future due to climate change. Here, the local farmers will incur an opportunity cost if they do not consider cocoa as a new possible source of income.
Analyzing the median of the climate projections, neither particularly optimistic nor pessimistic scenario, we found that more than half of current production was located in zones of systematic adaptation (470,000 tons). About another third of the production came from regions with minor adaptation needs (290,000). A small share (6%) was produced in zones projected to become unsuitable for cocoa by the 2050s (50,000). Opportunity zones should currently not contribute any production because in our model they only become suitable in the future. We nevertheless found a small share of production distributed in these zones which can be attributed to the uncertainty in the suitability analysis, the distribution assumptions and the data.
This shows that, although farmers may find alternative income sources, transforming away from cocoa without institutional support will likely cause considerable economic hardship
We considered our cost of inaction to be the potential benefits of a certain adaptation effort. Specifically, we assumed a counterfactual in which cocoa production is restored to current levels where possible, income losses where cocoa becomes unprofitable are compensated and opportunities where cocoa will be a novel attractive option for farmers are seized. Hence, the adaptation effort we considered was not defined by its cost but by its adjustment impact. A full-fledged cost-benefit analysis of adaptation would have to take adaptation cost as well as different possible degrees of adaptation effort into account.
We argue that a full quantitative integration of the cost-side might not be necessary to encourage action on adaptation in the West-African cocoa sector. Many potential adaptation measures for West-African smallholder cocoa farmers increase productivity also under current climate conditions and are therefore no-regret options. Better pest and disease control, the usage of drought-resistant varieties or training famers on the optimal amount of shading will not only reduce future climate risk but increase efficiency today.
Especially the use of fungicides and fertilizer would augment yields considerably but is so far too costly for the majority of smallholder cocoa farmers. Only few interventions, as for instance encouraging a transformation of cocoa-based farming to other crops, might actually turn out ineffective or counterproductive in case the anticipated climate impact will not occur. Finally, increased productivity could have other co-benefits by reducing deforestation as forest clearing and extensification of cocoa area has so far often served as means to increasing production. Climate change must therefore be understood as an additional risk in a region where low productivity and environmental problems already pose serious challenges to cocoa farming.
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