Cocoa in the face of Covid: challenges and reflections from Latin America

"This pandemic challenges us, but also reveals the resilience of the cocoa chain". This refrain was echoed among cocoa organisations, chocolate manufacturers, non-profit organisations, cooperation and government entities from Latin American countries participating in the Online Cocoa and Chocolate Summit, which was held May 27-28.

Latin America has seven of the eleven cocoa gene clusters. This opportunity has led the region to stimulate the growth of fine aroma cocoa as a source of development for small producers and others in the value chain.

As Rikolto we drew five conclusions from the meeting that could reveal what lies behind this sentence:

At the international level, the main factors that commonly impacted cocoa producers and traders were restrictions on movement, curfews and shop closures. Never before have chocolate manufacturers experienced a crisis of this magnitude, that simultaneously affects all their cocoa suppliers and international chocolate markets in particular.

Latin American governments were challenged to address a multilevel crisis (international, national, regional, local) that affected different sectors of society, revealing not only the inequalities in the region, but also the gaps in the market.

Cocoa associations in the Dominican Republic, Ecuador, Peru, Nicaragua and Guatemala presented the impacts of these restrictions on farming families in their countries of origin.

During the first month of the crisis, the cost of transportation increased, while the price of cocoa decreased. One of the biggest challenges was to collect wet cocoa from hundreds of small farmers who depended on the crop in remote rural locations, while respecting the social distancing measures and regulations issued by the different States (national, local).

The organisations implemented new protocols and managed support for hygiene supplies, while helping to keep rural communities safe from infection.

Pangoa cooperative in Peru saw the crisis as an opportunity to redouble its commitment to diversified plots with a dual purpose: feeding families and selling surplus fresh produce on the market to generate additional income.

The guild organisation Fenaprocacaho (Honduras) focused on improving its virtual and telephone communication to ensure a flow of information between farmers and cocoa centres on how the situation was evolving.

During the first emergency stage, the cooperative UNOCACE (Ecuador) organised the purchase of supplies and basic food for producers in extreme poverty, assuming the cost as an organisation, but also managing donations (from clients, cooperation) that eventually benefited more than one association.

What is government, private initiatives and other actors doing to safeguard the future of the supply chain and the industry in Latin America? In Ecuador, for example, some of the efforts complement those of the government. These include improving conditions for the safe transportation of cocoa to export ports, as well as financial support and the provision of safety and security equipment:

• Initiatives such as MOCCA work with international partners to leverage new private resources to finance the delivery of supplies.

• FCIA recently launched a new web portal (makeminefine.com) designed to promote sales of 80+ international companies during store closings in the wake of the pandemic. It includes an ongoing online training offering in partnership with various initiatives on the continent.

• The company Cacao Latitudes is taking advantage of the opportunities presented by the pandemic to involve young people in training activities.

• The Central-American SICACAO Platform is analysing the various types of risk, and the changes that the next decade will demand. Therefore, they have started monitoring key indicators together with FAO, MOCCA and Rikolto, to build a risk mitigation agenda in the sector.

Much of the work to make the cocoa supply chain more sustainable and high quality prior to Covid-19, now forms the basis of the response during the crisis. It is therefore essential that these existing initiatives and structures are renewed today in favor of the major challenges that will continue after Covid. I mention a few:

• Minister Iván Ontaneda Berrú (MPCEIP-Ecuador) highlighted the Premium & Sustainable seal (for environmentally sustainable products) as the future of Ecuadorian agriculture, as it strengthens confidence in Ecuadorian products with high differentiated value, but also facilitates the entry of products such as fine aroma cocoa into the international market.

• For associations such as ANECACAO (Ecuador), FENAPROCACAHO (Honduras), APPCACAO (Peru), the major challenges during and after Covid must continue to be addressed. They include: differentiation of the quality of Latin American cocoa, deforestation and climate change; seeking a greater connection with the consumer, and adapting to the new reality.

• The company Conexión Chocolate explains that, because they represent the future of cocoa, young people should also continue to receive support during the pandemic. Today they are shaping the future of the industry with chocolate bars that are aimed at world markets and are co-created in alliance with the producers' association UNOCACE, and Rikolto as a strategic ally. These bars will continue to provide a decent income to young cocoa farmers today, when they need it most.
• The MOCCA initiative (USDA, Technoserve, Lutheran World Relief, Rikolto), in partnership with Cacao Móvil, promotes the use of new technologies to provide training on cocoa cultivation and marketing in Latin America, strengthening a network of specialised promoters whose long-distance accompaniment of producers is more valuable today than ever before.
• The Alianza Cacao initiative (Peru) believes that producers in rural areas can benefit from digital payments, which would mitigate the risk of contagion related to queuing at banks. It has launched a pilot project in coordination with banks, social organisations, and government entities to make electronic money a reality for cocoa families.
• In Central America, work is being done on food security for families with agroforestry and diversified systems. These models ensure new income for families, but also climate resilience for cultivation.
• Rikolto, World Cocoa Foundation and CIAT, among others, work in communities of practice for a climate-smart cocoa, with interventions that will strengthen the policies of the cocoa sector in the region to sustain the future of cocoa.

After the initial shock of the crisis, the industry and the chain are recovering, knowing that returning to business as usual is not an option. We hope that the Summit has become a space that promotes the recognition of the situation in which the sector finds itself, making its challenges and reflections more visible today, and more sustainable and resilient tomorrow. Let us use this crisis as an opportunity to strengthen the chain.