FORMULATING NATIONAL COCOA PLANS TOWARDS ACHIEVING A SUSTAINABLE COCOA ECONOMY

INTRODUCTION

1. Members will recall that one of the recommended priority actions identified at the first Roundtable on a Sustainable Cocoa Economy (RSCE1) in Accra in October 2007, as contained in the Accra Agenda, was the development of national cocoa plans by the major cocoa producing countries. This priority was further re-iterated as the next step in the Declaration of Trinidad and Tobago, which emanated from the second Roundtable on a Sustainable Cocoa Economy (RSCE2) in Trinidad in March 2009. Furthermore, the uncertainty regarding future production (and demand) of cocoa, the dearth of information on cocoa resources, the lack of co-ordination of initiatives originating from the public and private sector as well as from various development partners, at both national and international levels, aiming at developing the cocoa supply chain, have raised questions with regard to the future sustainability of the cocoa economy. Consequently, the need for countries to develop their own national cocoa plans, in coherence with other strategic initiatives formulated, such as national plans aiming to develop the agricultural sector and the local industry, the Poverty Reduction Strategic Papers and other national strategic documents, has become crucial.

2. This document aims to promote the concept of a national cocoa plan, providing its rationale and objectives and proposes a general guideline to ICCO Member countries for its formulation. Examples and features of publicly available national plans by some cocoa producing countries are provided in the attached Annex.

3. It should be noted that, while the two Roundtables on a Sustainable Cocoa Economy (RSCEs) have provided elements to take into consideration by the countries concerned in order for the national cocoa sectors to move towards a sustainable cocoa economy, the World Cocoa Conference to be organized in Abidjan, Cote d’Ivoire, from 19-23 November 2012, is expected to provide further elements, to be articulated within a Global Cocoa Agenda for the cocoa sector.

RATIONALE FOR A NATIONAL COCOA PLAN
4. As outlined in document EX/144/13/Rev.1 which contains the Strategic Plan of Action for the International Cocoa Agreement, 2010, there are several challenges to address in order to achieve a more sustainable world cocoa economy. The liberalization of the cocoa sector in many producing countries had resulted in the weakening of the market position of farmers. The dismantling of many state-owned institutions had left farmers to their own devices, with limited support services to assist them in investment decision-making processes. This had resulted in declining yields, further aggravated by the prevalence of pests and diseases. For example, estimated crop losses in many countries are between 30% - 40 % of total cocoa production. This development has contributed to trap smallholder cocoa farmers in a vicious cycle of poverty.

5. The objective of a national cocoa plan is to achieve a sustainable cocoa economy, in particular for the benefit of smallholder farmers, who are considered to be the weakest link of the value chain. This is also in line with the mandate provided in the International Cocoa Agreement, 2010 wherein the definition of a sustainable cocoa economy implies an integrated value chain in which all stakeholders develop and promote appropriate policies to achieve levels of production, processing and consumption that are economically viable, environmentally sound and socially responsible, for the benefit of present and future generations, with the aim of improving productivity and profitability in the cocoa value chain for all stakeholders concerned, in particular for the smallholder producers. The First and Second Roundtables (RSCE1 and RSCE2) provided some guidelines to achieve a sustainable cocoa economy. In this respect, a national cocoa development plan was considered a priority action.

6. Primarily, such a plan is necessary for the simple strategic reason that the country needs to continue to reap the benefits from cocoa cultivation in the future, as well as to raise the incomes of farmers, alleviate poverty, and address the increasing challenges facing cocoa smallholder farmers, which include food security, climate change, declining yields, losses due to pests and diseases, and the ageing population of farmers. There is a need for better co-ordination of efforts, both at national and at international level, through public, private and civil society partnerships in order to mobilize the scarce resources available and work together to drive the cocoa sector to greater heights. Just as a Global Cocoa Agenda is expected to be formulated as the main output from the World Cocoa Conference, the national cocoa plan is envisaged to provide a road map at national level for cocoa producing countries to develop their sector into a vibrant contributor to the national economy. The road map is necessary to assist governments, civil society, and donors in defining interventions to meet key objectives for the cocoa sector, including enhanced productivity and competitiveness, reduced rural poverty, improved food security, increased capital accumulation by smallholder farmers and more sustainable management of natural resources.

ELEMENTS OF A NATIONAL COCOA PLAN
7. A national cocoa plan can be broadly defined as a document which outlines the vision, mission statement, values and strategy to bring about a successful cocoa sector. It implies, as a requirement, to understand the current position of the sector and the possible avenues through which it can pursue a particular course of action. Hence it could be viewed as a process for determining where the country is heading over the next five or ten years in terms of the development of the cocoa sector, although some may extend the vision to 20 years. A popular approach often used is a “situation-target-proposal”. As a first step, an evaluation of the current situation and how it came about is carried out by the lead ministry/agency. The target is set with clearly defined goals and/or objectives, followed by the path/action plan or the road map, with clear milestones to mark the route to the goals/objectives. Among the most useful tools used for strategic planning is a SWOT analysis.

8. The main objective of the SWOT analysis tool is to analyse internal strategic factors, namely the strengths and weaknesses attributed to the country, and external factors beyond the control of the country, namely the opportunities and threats. The action plan which capitalizes on the strengths, overcomes the weaknesses, seizes identified opportunities and reduces threats, states in clear terms how it is to be implemented in phases, on an annual basis, to achieve the long term objective. A monitoring and review mechanism has to be instituted to streamline and adapt to changes in the global and domestic environments.

9. The strategy combines analyses, processes, and required actions, and usually involves the following elements:

i. A snapshot of the current status of the cocoa sector, which may involve a new economic and value chain analysis, including formal models;
ii. A national vision of the cocoa sector within the given time-frame;
iii. A diagnosis of the key constraints that prevent the cocoa sector from achieving its vision, and an analysis of the main opportunities, inevitably requiring new analytical studies and likely involving modelling of growth processes; and
iv. Action plans for implementing the vision, including assignment of responsibilities and estimation of costs, and a comprehensive programme of monitoring and evaluation to measure the costs and benefits and to understand any required revisions.

10. The challenges facing the global cocoa economy are well known. However, those facing specific countries at national level have often yet to be fully understood. Hence it is necessary to understand the domestic issues facing the cocoa sector, including the resources available at local level in order to formulate a national strategic plan.

STEPS REQUIRED IN FORMULATING A NATIONAL COCOA PLAN

11. Effective processes for preparing a national cocoa plan rely on intensive fact-finding, diagnostic studies, analyses, programme monitoring, evaluation and impact assessment. If cocoa is established as a strategic crop and features prominently in the national development plan, it seems necessary to formulate a dedicated national cocoa plan to define its position in the national economy and to determine a clear road map. A national cocoa plan would present combinations of policies and programmes around which stakeholders can agree through consensus, and thereby mobilize the resources that are required. Through a participatory and comprehensive approach, a national cocoa plan would focus efforts on ways that would enhance collaboration among the stakeholders and reduce the duplication of and conflicts arising from differing individual initiatives.

12. There is recognition that the development of the cocoa sector should involve the wider responsibilities of multiple ministries and agencies, and this gives rise to potential problems, such as co-ordination of efforts and dilution of focus in analyses and programme planning. Hence the benefits of pursuing a national cocoa plan are obvious, in order to synergize and engender unity of actions, in a targeted approach, to achieve the jointly set targets. While there may be national specificities which the national plan has to take into account, addressing the core issues of poverty alleviation, food security, climate change, remunerative income for smallholder cocoa farmers, institutional support for effective technology transfer, best known practices, living standards, and enabling a conducive environment which promotes the orderly development of the cocoa sector all remain very relevant in the formulation of a national cocoa plan. To many countries, this remains a major challenge. Nevertheless, some key elements are critical to enable the cocoa sector to develop successfully. Some hallmarks in the development of a successful national plan are as follows:

Strong political and administrative leadership at central and local levels

13. Strong political and administrative leadership at central and local levels is a key ingredient to initiate a national cocoa development plan. The lead ministry must first be identified, headed by a capable leader who is able to inspire the cocoa sector and bring the best out of the key stakeholders in a concerted approach to develop the sector in an orderly manner. A leader is one who is able to provide a vision with the necessary framework to formulate cocoa friendly policies to promote sustainable development of the sector based on the three pillars. Being a results/action-oriented person, he/she is able to galvanize the key stakeholders, put the plan into action and implement the plan successfully with the desired results. He/she would be able to adjust the plan as the environment required, and seize the opportunities available in order to maximize investment return.

A strategic document identifying the desired outcomes of decentralized cocoa development programmes, specifying timetables, budgets and responsibilities, built upon sound knowledge and analyses of cocoa resources

14. To be able to plan effectively, in-depth knowledge of the domestic value chain is required to understand the mechanics and identify bottlenecks in order to make recommendations on how to address the gaps. A stock taking process of the current situation in the cocoa sector has to be undertaken. For this to happen, important key statistics on production areas, the numbers of cocoa smallholders involved, costs of production, competing land use, opportunity costs of the production factors, support services, extension services, access to inputs and credit, threats from pests and diseases, farming systems, types of planting materials, yields and productivity, research and development needs and other relevant key information is required. This information is vital to be able to determine the most efficient use of the resources available and to enjoy the maximum returns on the investment. With good statistics, rigorous analysis would give clear evidence and present an accurate status of the sector from which a SWOT analysis can be conducted. Subsequently, gaps could be identified, followed by key strategic actions to bridge the gaps.

15. For many countries, this may mean a substantial transformation of the farming system, including land reforms to provide long term land tenure, security that will promote greater entrepreneurship from cocoa farmers and will act as an incentive for small farmers to invest on the land. A good strategic plan would also be able to ensure delivery; to equip the committee in charge of following through its implementation with the necessary wherewithal to ensure that all the recommendations do not lack the resources required and to see that the actions are effectively implemented, bringing about the desired results according to the time schedule.

National Consultation for consensus-building and ownership of a vision of cocoa development

16. National consultations are necessary through the establishment of a national platform, comprising multi-disciplinary policy makers, stakeholders throughout the cocoa value chain and the development community. The involvement of key stakeholders who are knowledgeable and practical experts in the associated fields and are able to contribute ideas and provide strategic thinking is absolutely vital in shaping the road map. Holding a national workshop would facilitate the process towards consensus building and ownership of a shared vision for the sustainable development of the cocoa sector. In formulating a national cocoa plan and obtaining an international perspective, it is imperative to have on board experts who are knowledgeable in the international cocoa sector and who would be able to provide the required inputs in terms of the challenges and prospects from the market place. This is important, as the production policies of cocoa are highly dependent on market driven mechanics and it is vital therefore to ensure that the produce meets the demand requirements.
Mobilization of institutions and partnerships at different levels and in different sectors to ensure coherence in the implementation of the Cocoa Development Strategy

17. The national cocoa plan should be able to mobilize all the available resources, including from cross cutting ministries and institutions. Strategic partnerships at all levels are crucial to implement the cocoa development plan successfully. Aligning strategies with other ministries, in particular planning and finance, will ensure that the national cocoa plan is in line with overall development strategy. This will ensure coherence with other national policies and avoid wastages and duplication of efforts.

18. The Malaysian experience bears testament that, once the national cocoa plan has been formulated and agreed upon, it is vital to have government endorsement, being the highest policy-making body in the country, in order to channel the energies of both the political and administrative machinery of the country towards the single objective as defined in the national cocoa plan and thereby to ensure its effective implementation and broad support.

Broad local participation in regular monitoring, and an understanding of the likely impact on those who will benefit and those who may lose

19. The national cocoa plan needs to be regularly reviewed, be adaptable to and take stock of the changing global environment; and identify unforeseen bottlenecks during implementation. The plan could be based on a strategic five year-rolling plan with achievable/realistic targets, combined with a review and monitoring mechanism. A mid-term review would also evaluate interim results and the impact of implementation. Measuring the results through evaluation of the planned programme implementation ensures policy learning from feedback received. It also allows for adaptation, thereby delivering the desired results.

20. A very similar process is being advocated by The New Partnership for Africa’s Development (NEPAD) under the Comprehensive Africa Agriculture Development Programme (CAADP) in its Guide for Implementers. The programme urges countries to use the roundtable process to determine the agenda, embodying a set of key principles and targets to promote growth in the agricultural sector and economic growth. The process starts by engaging key players and determining entry points, then moves on to planning, based on evidence and discussion, building alliances with investors at all levels, developing a country compact and, finally, advancing to implementation, monitoring and peer review. A similar process could equally be developed and tailored specifically to meet the challenges facing the cocoa sector. Other guidelines have been formulated to assist governments in supporting their agricultural sector, such as the World Bank in a series of modules to develop the agricultural sector as an engine to promote pro-poor growth, with very similar steps based on lessons learned from case studies.

WAY FORWARD
21. Most cocoa producing countries have at least developed a national agricultural development plan. Where the cocoa sector ranks in terms of its importance in the agricultural sector would determine how high a profile the national cocoa plan assumes in the overall economy. In addition, the emphasis of a national cocoa plan varies from country to country, depending on how developed the cocoa sector is. Consequently the strategic challenges are not the same. For example, Brazil and Malaysia, with their stronger focus on downstream activities in the cocoa sector, have different priority actions in their national plans compared with other countries whose constraints might be on upstream activities.

22. The national cocoa plan needs to take cognisance of all existing development plans and should be developed in line with them in order to avoid duplication of effort and maximize the efficient allocation of resources. For most cocoa producing countries, allowing the cocoa sector to develop on its own without any policy direction is no longer an option. The onus is on governments to assume a leadership role in initiating and developing a vibrant cocoa sector, harnessing the active support of the private sector, civil society and regional and international development partners, as a base propelling economic growth for a sustainable economy.

23. The ICCO is ideally positioned to provide a platform for countries to give feedback on their experiences in developing their national cocoa plans, with a view to learning from each other. This would also shorten the learning curve and benefit their stakeholders.

24. This topic will also be reviewed during the World Cocoa Conference, which meets on 19-23 November 2012 in Abidjan, Côte d’Ivoire, and the conclusions reached will form part of a Global Cocoa Agenda which will provide a road map at the international level. Hence the formulation of national cocoa plans by countries is a first step in the process towards the agreement of a Global Cocoa Agenda. Members may wish to consider these elements in formulating the national cocoa plans in their respective countries.