CSR Asia launches new report as part of the CSR Asia/Oxfam Inclusive Business Series. Cocoa is the main raw material for chocolate production and has no substitute. With the global chocolate market worth US$83.2billion in 2010 and projected to grow to US$98.3 billion in 2016, cocoa is in increasing demand.
The International Cocoa organisation projects a supply deficit for the crop in 2013/2014 despite robust production in the first quarter of the season. This is due to the demand for cocoa butter being at a seven year high and the growing demand of chocolate consumption in emerging markets, especially in Asia.
“A particular passion is required to grow cocoa – it requires time consuming TLC: Tender, Loving Care.” says Erin Lyon, Executive Director of CSR Asia. “Smallholders can find better returns growing other commodities. Consumers, who have a growing passion for chocolate products, will ultimately pay a greater price if the industry does not shift to an inclusive business model approach.”
This new report by CSR Asia is based on a range of different research studies as well as
in-depth interviews with key stakeholders. It presents an introduction to the cocoa industry and examines the challenges and current sustainability activities undertaken by key players. It highlights opportunities and interventions for inclusive business opportunities.
The key challenges facing the cocoa industry highlighted in the report are:
- Low productivity and quality
- Diseased and aging trees
- Questions over sustained investment in sustainability initiatives
- Complex trade flows and changing taxation climate
- Poor pricing transparency
- Inefficient project management and poor governance
- Inadequate trust
- Land pressures
- Aging farmers
- Gender inequality
- Limited multiple livelihood strategies
The report talks about these challenges amid increasing concern amongst government and NGOs that activity by key industry players is centered around access to cocoa – rather than addressing the challenges facing the industry.
“It is clear that the next generation of farmers will not want to grow cocoa unless they can see greater returns for their efforts” says Richard Welford, Chairman of CSR Asia. “Unless we can improve quality, productivity and incomes of farmers through inclusive business interventions, then there may simply be no cocoa being grown in Asia in the future.”
The report looks at current sustainability programmes and activities undertaken by key players within the region. It considers the opportunity and challenge that multi-stakeholder initiatives present for the industry. In particular, the report highlights interventions by key stakeholders and opportunities for inclusive business practices.
The full report is available at www.csr-asia.com/publications.php
The paper, written by CSR Asia is part of a partnership with Oxfam on inclusive business value chains.
CSR Asia is a leading provider of advisory, research and training services on sustainable business practices in Asia. For more information visit: www.csr-asia.com
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