This is the sequel of the two-part article series. The first part talks about the profitability limiters in the cocoa industry – discussing some of the factors that contribute to meager profitability for cocoa producers. Click Here to read it.
How to Increase Profitability in Cocoa Production
Increasing productivity in the cocoa industry starts with eliminating or reducing the effects of the profitability limiters discussed in the previous part of this article. Here are some measures that can be taken towards achieving increased productivity in the cocoa industry.
Prioritize Quality
Cocoa farmers must focus only on producing high-quality output. Consistency in producing premium beans often sets a producer apart, giving them a good reputation and attracting increased patronage for their goods.
Many distributors and purchasers already have to deal with the hassle of ensuring their products pass several quality tests, and that the beans are produced in compliance with certain regulations like the EUDR. Such distributors will be more inclined to purchase more from farmers with a reputation for selling high-quality cocoa beans produced in compliance with all environmental, and social regulations guiding the industry.
These companies would be OK with purchasing at slightly elevated prices as long as the premium quality is guaranteed. Of course, this provides an immense opportunity and incentive for farmers who consistently produce top-quality outputs. Thus, it will encourage improvements in the production rate and output quality
Engage In Continous Learning and Application
Continuous skill and knowledge improvements are important for enhancing outputs and profitability. Regular, focused learning leads to consistent improvements and results.
To improve the quality of their output and profitability, farmers must commit to continuous upward learning. They must always find and leverage avenues to improve their operations.
Illiteracy is a prevalent problem among cocoa farmers in rural communities. Without proper education, the farmers primarily run their operations with outdated and less productive techniques. However, with continuous education on industry best practices, new technology, innovative farming methods, and solutions to emerging problems, farmers can significantly improve their productivity.
While it is often the government’s call to provide learning resources for farmers, it’s the farmer’s responsibility to take advantage of the available resources. And in cases where such resources aren’t provided, the farmers should take the initiative and seek out opportunities for self-learning.
Private organizations can also assist in farmers’ training. For example, Sunbeth Global Concepts through its sustainability team and other groups provides proper training and facilities for cocoa farmers it deals with, helping them obtain the skills necessary to improve their operations and profitability.
Partner with Reputable and Credible Offtakers
There are numerous instances of distributors and off-takers cheating farmers – offering them meager prices for their products while retaining the majority of the profits. This is a major issue that affects profitability and motivation for farmers.
While this might be a widespread issue in some areas, there are numerous credible distributors that farmers can seek out and partner with. Sunbeth Global Concepts Limited is one such reliable and credible agricultural trading company. They have a track record of consistently treating their partner farmers right and giving back to different communities. The company places a premium on its relationship with its partners and prioritizes fairness in all its activities.
Farmers can significantly improve their profitability by having the right partners that aren’t just interested in taking from them, but also in ensuring they’re well compensated and satisfied.
Encourage More Youths To Engage in Cocoa Farming
Another major cause of concern in the general agricultural industry is its over-saturation with aged farmers. For example, a large percentage of cocoa farmers in Nigeria are individuals who are either beyond retirement age or are close to it. There’s a noticeably low rate of youthful participation, causing a deficiency of youthful energy and progressive ideas in the sector
Many of the old farmers find it challenging to embrace or implement new ideas or techniques – So, they cling to the obsolete methods they had learnt as youths. However, since the methods are no longer effective, it limits their profitability.
A straightforward solution is to encourage and incentivize more young people to engage in cocoa farming. This will help to inject more youthful energy and ideas to transform operations in the industry. Youths learn better, have strength for implementation, and are more tech-savvy. All of these are factors that can contribute significantly to increased profitability.
Cocoa farming is a labor-intensive and capital-intensive business. But sadly, cocoa farmers earn just about 6% of the final value of a bar of chocolate, which is meager compared to the efforts they put in. However, by implementing different combinations of the measures discussed above, they could significantly bolster the profitability of the business.
