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Action

Supporting an improved governance mechanism for cocoa traceability in Ecuador

  • Year

    2023

  • Location

    Ecuador

  • Partners

    Latin American Center for Rural Development (RIMISP or Centro Latino Americano para el Desarrollo Rural)

  • Budget

    EUR 15 000

  • Funded by

    EU REDD Facility

Introduction

Ecuador is the world’s third largest cocoa exporter, with more than 400,000 tonnes exported in 2021, equivalent to 9% of world exports. It is also the leading producer country in Latin America. In 2021, the EU REDD Facility supported Ecuador’s cocoa sector by facilitating a national dialogue to develop the concept and a roadmap for the implementation of a traceability and transparency system for the cocoa value chain. The designed system includes tracking and assessing deforestation risks. The Facility’s support included informing relevant stakeholders of the technical and institutional feasibility of developing and implementing such a system.

The challenge

Two major challenges for the implementation of the traceability and transparency system were identified during the participatory diagnosis process:

  • The governance of the value chain: the actors of the chain need to coordinate in generating and circulating information, but also in financing the costs of developing, implementing and updating the traceability system.
  • The informality of intermediaries and traders: it is currently estimated that more than 80% of the cocoa produced in Ecuador goes through one or more intermediaries and traders. It is very difficult to make these informal actors visible in a traceability scheme. However, it is absolutely necessary to identify and capture information on the 150,000 cocoa smallholders in the country.
Frederic Baron, EFI

A cocoa farmer brings his cocoa beans to a purchase centre.

The objective

The EU REDD Facility aimed to identify the legal bases for a possible governance mechanism for the cocoa chain and develop a traceability methodology starting with intermediaries and traders.

The approach

To achieve this objective, the study focused on two aspects:

  • Identification of the legal bases, as well as potential legal gaps, for the development of a governance model for the cocoa value chain that supports the creation and management of a traceability and transparency system. This analysis was inspired by two existing mechanisms: the Interprofession in France, and the parafiscal model in Colombia with the federations.
  • Assessing the practical feasibility of building a traceability and transparency system for the cocoa and chocolate chain, starting with intermediaries and traders.

Results and impact

The main results of the Facility’s activities are:

  • Identification of options for chain governance mechanisms and legal bases, including the creation of Agri-food or Agro-industrial Chain Organisations
  • Consultancy activities for the implementation of a traceability system of the small cocoa producers’ organisation of Fortaleza del Valle
  • A list of the majority of traders and intermediaries of the cocoa value chain in the territory of Carrizal Chone
  • A methodology to identify independent producers through the relevant traders and intermediaries
  • Implementation of the methodology in a pilot project which registered in a virtual traceability system a representative number of traders and intermediaries, and then farmers with geo-referenced cocoa plots in the province of Manabí
  • Lessons learnt from the pilot to be taken into account when developing the national traceability system

Frederic Baron, EFI

In the traceability system, trader defines their strategy for registering cocoa farmers. In general, the most opportune moment for the trader and intermediary to register the largest number of farmers is when the farmer takes the cocoa to be sold to the collection or purchase centre. The trader can use advertising material, encouraging and inviting farmers to register.

Resources

About the EU REDD Facility

The EU REDD Facility supports countries in improving land-use governance as part of their efforts to slow, halt and reverse deforestation. It also supports the overall EU effort to reduce its contribution to deforestation in developing countries. The Facility focuses on countries that are engaged in REDD+, an international mechanism that incentivises developing countries to reduce greenhouse gas emissions from their forest and land-use sectors. The Facility is hosted by the European Forest Institute and was established in 2010.

Disclaimer

This website has been produced with the assistance of the European Union and the Governments Germany, Ireland and the Netherlands. The contents of this site are the sole responsibility of the European Forest Institute’s EU REDD Facility and can under no circumstances be regarded as reflecting the position of funding organisations.