About SEND

Consultancy to conduct research on transparency in farm gate pricing, price making processes and effect of low price on the lives of cocoa farmers

 

 

TERMS OF REFERENCE

FOR

SEND/INKOTA COCOA PROJECT

Position: Consultant (Research on transparency in farm gate pricing, price making processes and effect of low price on the lives of cocoa farmers)

 

Project Title: Cocoa Advocacy

Organization: SEND - GHANA

Project Duration: June 27th to July 18th , 2018

 

SEND Ghana Background

SEND-Ghana, a subsidiary of SEND foundation, West Africa is a national Non-Governmental Organization with specialty in (a) policy research and advocacy focusing on pro-poor policy and development programme monitoring in Ghana, and (b) service delivery through the promotion of livelihoods security. SEND Ghana runs a programme dubbed the Grassroots Economic Literacy and Advocacy Programme (GELAP). The programme goal is to reduce inequality and enhance the achievement of the Sustainable Development Goals. Further, the programme aims to promote accountability, transparency, equity, and citizen’s participation in the implementation of pro-poor policies and programmes in Ghana. For more information, please visit www.sendwestafrica.org

Project Background

The cocoa sector in Ghana has had a long history of economic, social and political contributions to the development of the country. However, in recent times the sector is faced with challenges that raises questions about its sustainability and benefits to farmers, especially smallholder and women cocoa farmers. The situation is exacerbated by the current drop in world cocoa market price, the reason that nearly resulted in Ghana pegging farmer prices to seventy percent (70%) of the world market price. The sharp drop in commodity prices in 2015 heavily impacted the cocoa industry, forcing top grower Cote d’Ivoire to slash prices in 2017. Ghana on the other hand has kept prices unchanged since setting producer pay at the equivalent of 7,600 cedis ($1,720) per ton in October 2016. This fall in market price is causing Ghana Cocoa Board to lose the equivalent of about $600 for every metric ton of the 850,000 tons that it is purchasing this season until September2018. (Bloomberg news article)

 Currently, both Ghana and Cote d’Ivoire, which together produce over 60 percent of the world's cocoa, are seeking a $1.2 billion loan from the African Development Bank (AfDB) to build storage facilities in an effort to build up buffer stocks and boost processing. It is in the right direction to have Ghana and Cote d'Ivoire to take steps to influence world cocoa prices just like members of the Organization of Petroleum Exporting Countries (OPEC) do regularly in the oil industry. It is somehow alarming to note that both countries earn around $5 billion out of the $110 billion global cocoa market irrespective of their contribution to the world cocoa beans. This is reflectively due to low value-addition and poor domestic consumptions, according to dailyguideafrica.com.

 It is in no doubt that the ever-expanding chocolate market fostered the emergence of industrial empires in cocoa processing and chocolate manufacturing. The standardisation and massification of cocoa production created an abyssal asymmetry between a handful of transnational companies and millions of small farmers. A majority of these farmers do not have access to information on market trends, and very little capacity - if any - to negotiate the price they receive for their cocoa. This downward pressure maintains most of the cocoa farmers below the poverty line and pushes them to develop short-term strategies in order to increase their income: chemical inputs and deforestation to enhance productivity, child labour to reduce labour costs… Some studies indicate that cocoa chain sustainability can be achieved by a guarantee that prices received by cocoa producers cover the costs of production and the basic needs of their families; the strengthening of grass-root producer organisations; substantial investments in basic social services and local infrastructures.  (An analysis of the conventional, sustainable and fair trade cocoa chains. By Basic (Bureau for the Appraisal of Societal Impacts and Costs), for the French Fair trade Platform).

The majority of the world cocoa crop is produced by smallholder farmers and their families on farms of less than 10 hectares, as most large plantations struggle to demonstrate any economic advantage. The effect of this fragmentation of production is a lack of organization of farmers into cooperatives or associations. This penalizes smallholder farmers in their negotiations with cocoa bean buyers who are coordinated and financed by the major cocoa processing firms who force down prices ; in Ghana more farmers are forming cooperatives as a step to having one bigger voice to negotiate. Low and unstable incomes deprive smallholder farmers of the finances they need to maintain their plots, thereby exacerbating the natural reduction in yields as cocoa trees get older. The producers are trapped in a vicious circle in which a lack of investment and decreasing yields perpetuate low and unstable incomes. In Ivory Coast, the world’s largest producer of cocoa, a regulatory system introduced in 2012 has led to an increase in producer incomes. Nevertheless, most farmers still live below the poverty line and remain vulnerable to future slumps in the world cocoa price. In a fully liberalised system such as the one operating in Peru, there is no mechanism to guarantee a minimum price to smallholder producers. 

On the supply-side government of Ghana has focused on practices aimed at increasing productivity and sustaining the sector. However, there is lack of transparency in pricing; low participation of cocoa farmers in decision-making in policy formulation (including price fixing) and monitoring; there is inadequate access to information on market trends and , and low adoption of sustainable agronomic practices such as integrated pest management methodologies. Data from 1920 to 1946 (refer to Kotey et al., 1974, pp. 483-488), a  period of free marketing in the cocoa industry, indicate that farmers received as their producer price on average 60.2% of the FOB price (defined as the world cocoa spot price minus the transport cost from Accra to the overseas markets. There was continuous inconsistency in producer price between 1947 and 1969 until the establishment of the Producer Price Review Committee (PPRC) in 1993 to ensure equitable distribution of cocoa export revenues among players in the industry. The PPRC (though includes representatives from farmers’ groups and other stakeholders but is largely controlled and directed by key staff of the Ghana Cocobod) comes out with the producer price of cocoa and agreed fees for licensed buyers and transport companies involved with local movement of cocoa. For each cropping season, items included in the determination of the internal producer price of cocoa and fees for various stakeholders in the cocoa industry are (1)  producer price (2) margin for the licensed buying companies (3) fees for local transport companies hauling cocoa from buying centres to warehouses of COCOBOD (4) the Cocoa Marketing Company’s (CMC) internal marketing cost, disinfestation/grading/sealing cost, crop finance cost, scale inspection and phyto-sanitary cost, export duty/cocoa roads, COCOBOD charge, farmers’ housing scheme, rehabilitation cost (cocoa and coffee) and stabilisation fund. The determination of the cocoa producer price and fees and margins for other stakeholders in the marketing chain is periodically reviewed to reflect changing world market prices. 

The gross and net Free-on-board (FOB) prices are determined by the PPRC with data for each production year compiled from various sources. However, the Minister of Finance has the final say in the exact level of the producer price to be paid to farmers; other social and economic pressures especially those related to electioneering and political issues do influence the final level of prices. The final level of cocoa producer prices cannot divorce itself from the reality of existing world market prices. Also, the level of funds in the Cocoa Stabilisation Fund established under the instruction of the former President, Mr. John Dramani Mahama, as at 2014 is unknown. However, the Minority Spokesman in Parliament on Agriculture, Mr. Eric Opoku, Member of Parliament for Asunafo South indicated in an interview with the national Daily Graphic on 16 June 2017 that there could be enough money in that Fund to cushion farmers from the fall in world prices and even increase the producer price of cocoa for the 2017/2018 production year to be announced during the first week of October 2017; though level of funds in previous years (2010-2013) was very low(Ghana Web News, 17 June 2017). 

Additionally, a more clearer correlation between producer prices and input distribution cost (subsidy programme) incurred by COCOBOD is not provided. This policy on the free and subsidised inputs for cocoa farmers is not really a subsidy programme but rather a source of reduction of producer price since all the costs of the so-called input subsidy programmes are included in the industry costs.

Generally, there is a low level of awareness of how lobbying and advocacy by CSOs, cocoa farmer organizations, and the media can influence productivity issues in the cocoa sector. This is largely due to the weak capacity for sustained and effective advocacy by producers. Thus, cocoa farmers have had limited voices in critical decision-making processes bordering on price setting and inputs. The effect has been that increasingly the social and economic situation of cocoa farmers, especially smallholders and women, has not improved to correspond with development in the sector and the country.

C.   Project Objective

Under a grant provided by INKOTA netzwerk, SEND-Ghana is implementing a one year project titled; “Strengthening Civil Society actors in Germany and Ghana in multi-actor partnership on sustainable cocoa production”. The goal of the project is to contribute to the development of strategies and activities by various stakeholders in the cocoa value chain to implement a living income for cocoa farmers’ households through active participation of civil society actors in national and international debates on sustainable cocoa. The project will do so by improving transparency in cocoa pricing through influencing policies and practices governing the sector. The project will work with selected national SDGs platforms including goal 1, 2, 5, 8, 13 and 15 with the objective of linking farmer based organisations to identified SDGs platforms to roll out advocacy for inclusive and supportive policies. Ten (10) CSOs and Farmer Based Organisations (FBOs) will be supported through networking and subject-specific expertise to advocate for the rights of cocoa farmers’ households and a living income. Based on this action, ten (10) CSOs and FBOs will build up a partnership for cocoa within the CSO-SDG platform (advocacy platform). This mechanism would help project the advocacy agenda beyond the project but also for national and international level discussions. 

D.   Project Outcomes

The project seeks to achieve the following outcomes:

a.    Ten CSOs and FBOs in Ghana build up a partnership for cocoa within the CSO-SDG Platform (advocacy platform). A respective working group meets at least four times within the project period to exchange knowledge and to develop common advocacy strategies.

b.    Five FBOs are mobilized to become part of the CSO SDG-Platform. Due to the exchange between FBOs and CSOs, FBOs increase their capacity on advocacy work.

c.    Two studies to improve expertise of CSOs/FBOs on issues in the global value chain of cocoa.

d.    A common policy paper of FBOs/CSOs based on the research will be discussed with political decision makers (parliament, ministry, COCOBOD) during several meetings.

e.    The advocacy work will be accompanied with media work leading to at least ten media reports.

f.     A Memorandum of Understanding with political decision makers to agree on further participation of CSOs/FBOs in decision making processes and discussions on national cocoa policies. Six monitoring meetings will be organized to ensure a sustainable follow up of the process.

E.   Objective and Scope of Services

SEND GHANA seeks the expertise of a consultant to conduct a study on transparency in farm gate pricing, price making processes and effect of low price on the lives of cocoa farmers. The study will focus on determining the state of openness in the cocoa price fixing process (from farm gate through to licensed buying companies, government and others along the cocoa value chain) and how low prices affect the lives of cocoa farmers.

Key task of the study is to clearly bring out price transparency issues including farmers’ access to information on market trends and price setting, the level of involvement of farmers in cocoa pricing processes throughout the value chain in Ghana, the key determinants of prices. Additionally, the study will detail factors that influence price setting considering both demand and supply driven factors, and disclose how farmers are involved in price decision making at the private sector such as UTZ, Fair trade certification organisations.

The main services to be undertaken by the consultant include, but not limited to the following: 

 

1    1.    Produce a detailed inception report

 

No later than a week after contract signing, the consultant will be expected to produce an inception report detailing:

•        a desk research on the cocoa sector in Ghana

•        the nature of pricing policies, institutional and regulatory frameworks of the     cocoa sector

·         What goes into pricing (who determines, level of involvement of farmers, access to information by farmers, etc)

•        cutting-edge innovations and key issues in the sector as related to pricing

•        a list of potential stakeholders to be consulted and interviewed as part of the study

•        a detailed work/implementation plan

•        other key issues identified so far and relevant to the study.

 

2. Undertake a comprehensive review and analysis of the cocoa sector in Ghana focusing on transparency in farm gate pricing, price making processes and effect of low price on the lives of cocoa farmers

Guided by field research/survey questionnaires prepared by the consultant and approved by SEND Ghana, the consultant will be expected to combine both qualitative and quantitative data in the fieldwork through broad-based consultation process including surveys, interviews, and focus group discussions with key stakeholders.

In undertaking this study, the researcher will interface extensively with (i) government institutions responsible for cocoa pricing at the national level, and management and coordination of the cocoa sector, (ii) private sector and industry players within the cocoa sector (iii) farmers, women and youth involved in cocoa farming, (iv) civil society organizations and faith based organizations involved in cocoa advocacy, and (v) other stakeholders that may be relevant to the study.

 

3. Develop a draft and  final report 

The consultant will prepare a draft report based on a detailed desk research and the outcome of the field work. After a few iterative processes based on review of the draft report by SEND Ghana, the consultant would be expected to submit a final report. The report is expected to cover, but not limited to, the following areas:

•    A review of cocoa pricing from farm gate through to the country regulatory and coordination body, and policy landscape of cocoa pricing.

•   A country brief and situational analysis of the cocoa sector taking into consideration the key institutions, regulators, cocoa farmers, market and pricing, among other relevant situations of importance to the study

•   The extent to which the cocoa sector pricing policies and programmes are advancing livelihoods and addressing the unmet needs of farmers especially women farmers, drawing lessons learned and their implications towards implementing a living income for farmers.

•   The pricing alternatives needed to improve livelihoods of cocoa farmers, reduce poverty, and consequently contribute to a living income for farmers.

 
4. Develop a policy brief

Upon submission of the final report, the consultant will prepare and submit a 2-page policy brief detailing key advocacy messages based on the findings of the study.

 

A.       Deliverables and Output

The deliverable schedule for services to be provided under this engagement is as follows:

 

                            Outcomes

          Deliverable/Output

1. Develop an inception report with a good literature background and the critical issues the study would address, potential stakeholders to engage with, and a proposed work plan

Inception report

2. Design and submit data collection tools to SEND Ghana for review and approval

Survey instruments/Draft questionnaires and interview guides/enumerator training, etc.

3. Pretesting of data collection tools

Report on outcome of pilot test

4. Undertake and complete data collection and analysis

Raw data collected, transcripts and analysis of data collected, pictures or videos taken during data collection

5. Preparation, completion and submission of draft report to SEND Ghana for review

First draft report

6. Preparation, completion and submission of final draft report to SEND Ghana to reflect comments arising from the review

Final draft report

7. Develop a 2-page policy brief detailing key advocacy messages based on the main findings of the study

2-page policy brief

 

G.   Contract Duration

The anticipated duration of the contract is fifteen (15) working days, starting June 27th to July 18th , 2018. During this period, the consultant is expected to deliver on the key outputs detailed above.

 Required Expertise and Qualifications

•        A university degree, preferably an advanced degree, in social sciences, agriculture, or other relevant discipline.

•        At least 5-7 years of prior work experience in dealing with Agriculture Policies and more preferably Cocoa sector issues.

•        Demonstrated knowledge and experience in undertaking research work especially in the area of Cocoa Advocacy. 

•        Knowledge of the current policy environment, ongoing processes and the dynamics and trends in the industry.

•        Must have skills in quantitative and qualitative research methods and reporting   

•        Experiences in carrying out organizational assessment of grassroots groups

•        Demonstrate experience and skills in preparing performance measurement guide for developments project

•        Good research and writing skills

 

  Reporting

The consultant will report to the Country Director of SEND GHANA on all issues related to the consultancy.

 

EXPRESSION OF INTEREST

The Consultant should express his/her interest in this call through a motivation letter accompanied by detailed curriculum vitae with three referees and samples of recent work, an expression of interest(EOI) and a budget to SEND GHANA,  by electronic mail to This email address is being protected from spambots. You need JavaScript enabled to view it. and This email address is being protected from spambots. You need JavaScript enabled to view it.  or hard copies to:

The Country Director

SEND GHANA

 A 28 Regimanuel Estates,

 Nungua Barrier- Accra.

 

The documents should be submitted latest June 22nd, 2018. Only selected candidates will be contacted.

 

SEND GHANA is an equal opportunity employer and women are particularly encouraged to apply.

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SEND Ghana
Box A28 Regimanuel Estates,
Nungua Barrier, Sakumono,

Tel: +233 (0) 302 716830 / 302 716860

Email: info@sendwestafrica.org