Master Thesis BA: Small Business & Entrepreneurship
Motivation and Collective Action for Strategic Positioning
of the Ghanaian Cocoa Farmers
By
JELMER STEENBEEK
University of Groningen
Faculty of Economics and Business
December 2016
Supervisor: Clemens Lutz
Co-supervisor: Andreas Rauch
Kleine Butjesstraat 64 9712DA
j.steenbeek.2@student.rug.nl Student number: 1986902
I
Contents
Preface... IV Acknowledgements... V Executive Summary ... VI List of Tables and Figures... IX Terms ... XI List of abbreviations... XI
1. INTRODUCTION ...1
1.1 Background information ...1
1.2 Research outline ...3
1.3 Scientific relevance of this study ...5
1.4 Practical relevance of this study ...5
1.5 Structure of this study...6
2. LITERATURE REVIEW...6 2.1 GVC ...6 2.2 Collective Action...7 2.3 Strategic Intent...9 2.4 Motivation ...10 2.4.1 Motivation in Psychology...11 2.4.2 Motivation in Davidsson (1991) ...11 3. CONTEXT ...13 3.1 Cocoa sector ...13 3.2 Selling chains ...14 3.3 Culture ...16 3.4 Farmers...17 3.5 Certification ...20 3.6 Cooperatives...21 4. METHODOLOGY ...24 4.1 Choice of method ...24 4.2 Case selection ...24 4.3 Data collection ...25 4.4 Operationalization of concepts ...25
4.5 Constructing interview questions ...38
4.6 Method of analysis...38
4.8 Validity and reliability ...39
5. ANALYSIS ...41
5.1 Cooperatives...41
II
5.1.2 Tano ...44
5.1.3 ABOCFA ...47
5.1.4 Concluding remarks ...50
5.2 Characteristics of the Farmers regarding the measures ...51
5.2.1 Ability...51 5.2.2 Perceived Ability ...53 5.2.3 Need ...56 4.2.4 Perceived Need ...58 5.2.5 Opportunity ...59 5.2.6 Perceived Opportunity ...61 5.2.7 Motivation ...62 5.2.8 Moderating variables...64 5.2.9 Action ...66
5.3 The relationships and mechanisms of the model ...68
5.3.1 Ability and Action...68
5.3.2 Perceived Ability and Ability...69
5.3.3 Need and Action ...71
5.3.4 Perceived Need and Need...73
5.3.5 Opportunity and Action ...74
5.3.6 Perceived Opportunity and Opportunity...75
5.3.7 Motivation and Reality as Perceived ...77
5.3.8 Moderation...80
6. DISCUSSION ...83
6.1 An overall interpretation of the results ...83
6.2 Ameliorated Model ...86
6.3 Application of Davidsson’s (1991) model...88
7. CONCLUSIONS ...89
7.1 Answering the sub-questions ...90
7.2 The main research question ...94
7.2.1 Lack of motivation ...94
7.2.2 Certification ...96
7.3.3 Strategic position in the GVC...97
7.3 Limitations and future research ...98
7.4 Recommendations...100
8. REFERENCES ...104
9. APPENDIX ...108
9.1 Davidsson’s 1991 model & measures ...108
9.2 Operationalization of concepts (Ability, Need, Opportunity) ...109
9.3 Responses LOC questions...110
III
9.5 Measures for Need...112
9.5.1 Original measure of Need ...112
9.5.2 Revised measure of Need...113
9.6 Interview Guides...114
9.6.1 Interview guide part 1 ...114
9.6.1 Interview guide part 2 ...121
9.6.3 Interview guide Representatives ...126
9.7 Case descriptions ...129
9.7.1 iMPACT Asankragua. Farmers 1-10 ...129
9.7.2 Tano Biyakoye Organic Farmers Cooperative. Farmers 11-20...149
9.7.3 ABOCFA. Farmers 21-30 ...169
IV
Preface
This Master’s thesis has been drafted and submitted as the completion of the Master of Science degree in Business Administration – Small Business & Entrepreneurship at the Faculty of Economics and Business from the Rijksuniversiteit Groningen. The main supervisor for the thesis is Dr. Clemens Lutz from the Faculty of Economics and Business. One co-supervisor has been involved: Dr. Andreas Rauch also from the Faculty of Economics and Business. This thesis is based on in-depth qualitative research on farmers from three cocoa farmer cooperatives, spanning three different regions in Ghana: The Western, Eastern, and Ashanti region, each involved in at least one of the forms of certification: Rainforest Alliance, Organic, and Fairtrade. The field work took place between 20th of March and 10th of May 2016. In-depth interviews were
V
Acknowledgements
Travelling to and through Ghana has been an eye opening, educating, and wonderfully chaotic experience. I have learned so much not only about cocoa but about people, culture, interviewing, conducting research, and West African friendliness. I visited four different farming communities, got to know Accra and Kumasi, and was able to travel a bit through the beautiful country. This amazing experience and finishing this thesis could not have been done without the help of some people that I would very much like to thank.
I want to thank Christabel for not only being a great translator but also a friend and knowledgeable guide throughout the research. A special thank you goes to Willem-Albert for welcoming me to Ghana and being an informative friend. He showed tremendous support through great advice, accommodation, and the opportunity to work with Agro Eco-LBI. I would like to thank the whole team of Agro Eco-LBI who welcomed me into the offices, gave me great advice and useful feedback, and took the time to answer my questions. Also, thanks to Inusah for helping me fix my computer. I am also incredibly grateful to everyone who helped me throughout the research in the different communities: Nelson and Michael for allowing me to stay in their home and being so very friendly, also Seth, and Titi for showing me around, helping me find my way in the communities. Also thanks to all the farmers who took the time to talk with me.
I would also like to acknowledge Anna for being a great housemate in Accra, an inspirational friend, and source of so much useful information. Also, Laura and Ida for their great companionship in Kumasi and our trip to Ada. I would like to thank my parents for their incredible support throughout my studies, not only financially but also for stimulating me throughout.
VI
Executive Summary
Numerous previous studies have found that motivation of farmers towards Farmer Market Organizations (FMOs) in many cases is lacking, which often leads to the failure of such cooperatives. This study takes a look at what it is that causes motivation (or the lack of it) in the context of cocoa farmer cooperatives in Ghana through in-depth qualitative analysis into the context, and adapting and assessing the applicability of the growth motivation model of Davidsson (1991).
While previous studies have determined that motivation often is or can be lacking for FMOs, this study is the first to determine why this may be. It looks at different aspects of motivation to find why or how motivation is influenced and can be impacted to strengthen motivation and commitment of members and therefore strengthen cooperatives as a whole. Numerous theories are employed along with different factors associated with motivation. Through a broad model, the study offers suggestions on which aspects are potentially influential in the context of cocoa farmers.
This paper hopes to offer, through a lens of collective action and motivation, insights and recommendations to the cooperatives studied on which relevant aspects to look out for to strengthen members’ commitment and motivation to work together. The hope is for sustainable cooperatives to effectively organize and motivate members to reach the potential that collective action presents. The hope is also to uncover which motivation-relevant aspects can effectively be studied and applied in the context of cocoa farmers who are member to cooperatives, and pave the way for similar future research. Future research can gain from the findings of this study, and insights from inefficiencies observed in the specific context. Preliminary findings on motivation and collective action are presented through adapting the model of growth motivation. It shows that this can be done and that the model created by Davidsson (1991) is adaptable and a useful starting point for exploratory studies on motivation.
The model is adapted to focus on motivation for collaboration instead of growth. It makes use of multiple theories that influence motivation, among which: need for achievement theory (McClelland 1961), economic locus of control theory (Furnham, 1986), and expectancy theory (Vroom, 1964). Through this broad scope, the study opens the way for future research to deal with similar and related theories of motivation in such a context. The model says that motivation is a result of the subjective reality as perceived which is organized into perceived ability, perceived need, and perceived opportunity. Room for adaptation is allowed as what makes up the relevant factors of perceived ability, need, and opportunity can be very context specific, especially when a new direction of motivation is tested. The study finds that using such a model is a useful first step into exploring the factors that may determine or effectively influence motivation. It also discusses the importance of understanding the context as this can strongly influence the generalizability of such models.
VII with the construct of motivation. Furthermore, motivation has a positive correlation with actions taken by farmers regarding the cooperative. This is complemented through positive relationships between the objective factors of ability, need, and opportunity such as the age of farmers, whether the cooperative offers the supply of inputs, and others. Following the analysis, the model is refined to show which factors should be taken into account for both the cooperatives and future research. It accounts for possible measurement errors and limitations of the study.
The model finds that ‘reality as perceived’ as well as strategic intent cohere with motivation of farmers and suggests that there is a strong possibility that social aspects of motivation are important factors in determining an individual’s motivation towards collective action. Social factors and strategic intent show the potential of not only being an important aspect relating to motivation but also as potential moderating factors between motivation and action. Social pressures were not observed but social motivations such as sharing costs and helping others, appear to be important factors influencing the motivation of farmers. It is supported through observations of strong personal relationships and community developments playing a prominent role in the minds of farmers. This shows that for cooperatives to motivate their members, a focus must be put on social goals of farmers and the social inclusion that collective action offers. Also, that the strategic intent of farmers, as it coheres with motivation, should be a consideration for the cooperatives which can complement and enforce those goals as a means to affect member motivation.
The model furthermore finds that education correlates positively with motivation. Farmers who are more educated are, according to the data, expected to be more motivated to work together through cooperatives. The model is also interpreted to say that it is the younger farmers who appear more motivated towards the cooperative. Farmers who have an internal drive to achieve success through a high need for achievement exhibit more motivation than farmers with a lower need for achievement and they are indeed farmers to look out for and engage. Opportunities known by farmers have a positive coherence with Action, therefore, farmers who are aware of the potential of a cooperative, and the opportunities it provides, may take more action with regards to the cooperative. The perception of opportunities also positively relates to motivation therefore it would be important for cooperatives to influence the perceptions of its members and communicate about opportunities. The factor Social has a positive correlation with both motivation and action, it is therefore the socially motivated farmers who are expected to have a higher motivation towards the cooperative. Social aspects of being a member should thus be promoted and made clear to members to potentially positively influence their motivation.
Certification has the effect of strengthening the strategic position of farmers through guaranteeing a minimum price for cocoa, a premium price for certified beans, and improved cocoa bean quality. The study also suggests that in some possibly extreme cases or situations, the costs of certification could outweigh the benefits. This is apparent through an increased difficulty for some farmers to access organic inputs and the immunity some pests develop towards organic pesticides. When perceptions of farmers are influenced by this, it can according to the model, highly influence motivation. Cooperatives dealing with certification and regulations connected to it must provide support for farmers to accomplish this. Although much support is offered and certification has been achieved, ongoing support for gaining inputs such as organic pesticides or fertilizers should be enforced as this is one of the major strengths of the cooperative. Given that the cooperative imposes stringent requirements, the ability of farmers must be in place to meet those requirements.
VIII likert scale and responses can be distorted in the context which presents another limitation but also important insights for future research. Finally, no comparison could be made between organized and non-organized farmers. This would greatly contribute to the analysis had the comparison been made.
IX
List of Tables and Figures
Figure 2.1 Davidsson (1991) model of growth motivation ...13
Table 3.1 Economic Environment...14
Figure 3.2 Map of supply chain including PCs and LBCs ...15
Figure 3.3 Licensed Buying Companies ...16
Figure 3.4 Map of the three regions ...23
Figure 4.1 Case selection ...25
Figure 4.2 Conceptual model of this study ...27
Table 4.3 Measures for need for achievement ...32
Table 5.1.1 Meetings per year Asankragua ...42
Table 5.1.2 Premiums Asankragua ...42
Table 5.1.3 Meetings per year Tano ...44
Table 5.1.4 Premiums Tano ...45
Table 5.1.5 Meetings per year ABOCFA ...47
Table 5.1.6 Premiums ABOCFA ...48
Figure 5.2.1 Education level distribution ...52
Table 5.2.2 Descriptive Statistics Locus of control measures ...53
Table 5.2.3 Correlations LOC measures...54
Table 5.2.4 Acreage ownership and sharecropping...57
Table 5.2.5 Descriptive statistics Perceived Need...58
Table 5.2.6 Correlations need for achievement ...58
Table 5.2.7 Descriptive statistics Opportunity ...60
Table 5.2.8 Descriptive Statistics Motivation ...62
Table 5.2.9 Correlations Motivation...63
Table 5.2.10 Descriptive statistics moderating variables ...64
Table 5.2.11 Descriptive statistics Strategic Intent...64
Table 5.2.12 Correlations Strategic Intent...64
Table 5.2.13 Descriptive statistics Financial ...65
Table 5.2.14 Descriptive statistics Social...66
Table 5.2.15 Descriptive statistics Action ...66
Table 5.2.16 Correlations Action ...67
Box 5.2.17 The Tano bias ...67
Table 5.3.1 Correlations Ability and Action ...68
Table 5.3.2 Correlations Perceived Ability ...69
Table 5.3.3 Correlations Need and Action ...71
Table 5.3.4 Action and participation in management comparison ...72
Table 5.3.5 Correlations Need and Perceived Need ...73
Table 5.3.6 Correlations Opportunity and Action ...74
X
Table 5.3.8 Correlations Opportunity and Perceived Opportunity...77
Table 5.3.9 Correlations Perceived Ability and Motivation...77
Table 5.3.10 Correlations Perceived Need and Motivation ...78
Table 5.3.11 Correlations Perceived Opportunity and Motivation ...79
Table 5.3.12 Correlations Motivation, Reality as Perceived, and Action...80
Table 5.3.13 Correlations with moderating variables...80
Table 5.3.14 regression model Strategic Intent ...81
Table 5.3.15 Regression model Financial...81
Table 5.3.16 Regression model Social...82
XI
Terms
Twi – Local Ghanaian language most often used during interviews
Cedi/ GH¢ – Local Ghanaian currency. At the time of interviewing $1 = GH¢ 3.92. €1 = GH¢ 4.36
N’nobua – A system used by farmers whereby a group of around six to eight farmers will help each other on each one’s farm for only some food in return. Often done during harvesting season and when breaking pods.
Susu – In the Akan language means ‘small small’. It is an informal banking system allowing groups to save money by contributing small amounts to a collective account or savings box. At a certain point in time the savings are paid out or invested into a joint cause.
List of abbreviations
ABOCFA – Aponoapono Biakoye Organic Cocoa Farmers Association AE-LBI – Agro Eco Louis Bolk Institute
ASA – Agricultural Service Agency CA – Collective Action
CAA – Cocoa Abrabopa
COCOBOD – Cocoa Marketing Board Coop - Cooperative
CRIG – Cocobod Research Institute Ghana EX – External Economic Locus of Control EO – Entrepreneurial Orientation
FMO – Farmers Market Organization FOB – Free on Board
FT – Fair Trade
GAP – Good Agricultural Practices GVC – Global Value Chain
ICFUA – iMPACT Cocoa Farmers Union of Asankragua IN – Internal Economic Locus of Control
IMS – Internal Management System
iMPACT – Mars Partnership for African Cocoa Communities of Tomorrow JHS/JSS – Junior High School/ Junior Secondary school
KK – Kuapa Kokoo LOC – Locus of Control
LBC – Licensed Buying Company LU – Luck Economic Locus of Control nAch – Need for Achievement PC – Purchasing Clerk PA – Perceived Ability PN – Perceived Need
PO – Powerful Others Economic Locus of Control PPE – Personal Protective Equipment
PPRC - The Producer Price Review Committee RA – Rainforest Alliance
SAN – Sustainable Agriculture Network SI – Strategic Intent
1
1. INTRODUCTION
The involvement of smallholder farmers in Farmers Market Organizations (FMOs) through collective action can be expected to be a profitable step towards successful integration in Global Value Chains. This being said there are many shortcomings of such cooperatives and in practice they often tend not to live up to their full potential. While numerous farmers have a drive for growth and development as well as an entrepreneurial orientation (Metzlar, 2015), many of the smallholders in developing countries are severely resource constrained (Lutz, 2012). Collective action may serve as a solution however, it seems many Ghanaian farmers do not fully commit themselves towards the cooperatives (Metzlar, 2015). Research (Thorp et al., 2005; Markelova et al., 2009; Foss & Lindenberg, 2011; Criaviotti, 2012) tells us that collective action is a critical means for smallholders to become competitive in the market amongst larger players, in the case of the cocoa farmers, this is not (yet) the reality. Even though much support is now available through investment from certification initiatives, there seems to be a lack of motivation, which ultimately undermines their potential. While many studies look into the success and failure of cooperatives, and determine that much of the reason for failure is the motivation of its members, no study has previously focused on the origins of motivation or the reasons for lack of it. This literature gap will be addressed in the context of Ghanaian cocoa farmers and their cooperatives.
In this thesis, the approach to smallholder position in the Global Value Chain (GVC) of cocoa is discussed and elaborated through the lens of collective action. The focus is put on motivation to uncover why farmers are not fully committing to cooperative initiatives that can potentially be very beneficial in increasing their position in the cocoa value chain and alleviating some of the issues faced by the cocoa industry.
1.1 Background information
2 cultivated by an estimated 5.5 million smallholders in developing countries and 14 million rural workers depend on cocoa for their livelihoods The vast majority are not wageworkers and therefore do not fall under the categories covered by living wage or minimum wage indicators and struggle to earn a decent living income (Fountain & Hütz, 2012). Costs associated with production inputs and investment creates low per capita income. Adding to this are quality regulations imposed through certification which, although including a premium, can add significantly to the production and input costs of the farmers themselves. One can easily observe the benefits of membership to a certified cooperative but increased transaction costs and stringent requirements could lead to lowered motivation or investment incentive towards such membership.
In the sense of strategic positioning, certification presents a fruitful opportunity for farmers to differentiate themselves by offering quality products at a higher price. There are now various certification initiatives involved with the Ghanaian cocoa farmers including Fair Trade, Rainforest Alliance, Organic, and UTZ. Each has requirements of the farmers and their production processes, and largely contribute to the funding of the FMOs. It was found in Metzlar (2015) that while the production requirements can be rigorous, the requirement of membership fees and commitment of the farmers is rather lenient. This allows the farmers to engage in side-selling to other buying organizations and leads to them having a low stake in the organization. Also, certified traders did not seem to strictly monitor or organize their farmers which leaves the question of the credibility of certification and the benefits for the farmers. Furthermore, it was found that “cooperatives are more likely to be successful when they are organized by farmers themselves” (Metzlar, 2015).
Some of the farmers have control over strategic resources (Metzlar, 2015). Lutz (2012) argues that successful involvement of smallholders in GVCs requires the control over strategic resources, and that FMOs may play a crucial role in the creation of these resources and competencies. It is through collective action and the creation of FMOs or cooperatives that farmers can increase their strategic position in the GVC and thus gain the bargaining power needed to have stronger influence and relieve some of the issues and struggles they face. Cooperatives are formed for varying reasons, have differing organizational structures, and have different perks to offer. They are most often related to market access through facilitating long term relationships with buyers, meanwhile regulating the quality of the produce. Similarly, community based initiatives provide training, sanitation, credit, agricultural inputs etc. For these cooperatives to function, some amount of investment must be present. This can be through a membership fee, funding from certifying organizations, or retaining part of a profit. Ultimately most of the funding comes from member’s collective efforts. More on this can be found in the context section.
3 the organization. Investigation into the strategic intent of the actors should provide a clearer picture of what it is that the farmers want to achieve and whether or not the cooperative can be relied on as a means to achieve these goals.
Ultimately the workings of a cooperative stem from the collective efforts of its members. These members must be committed to the cooperative as they form the backbone of the organization. The members need to also be motivated to spend time and effort and invest in the cooperative for it to function effectively. Motivation is a key attribute in this study, and an essential element for effective collective action. Initially motivation stands or falls with the perceptions of the individual. To understand this, it is important to closely look into the perceptions of the farmers. This will provide insights into why there is an apparent lack of motivation amongst them.
1.2 Research outline
In this study the thoughts and behavior of Ghanaian cocoa farmers are analyzed in combination with the FMOs they are a member of. This study draws heavily on the research results of Metzlar (2015). From his work it appears that although there is a drive for growth and an entrepreneurial orientation within the farmers, their motivation toward the cooperatives is low and they lack commitment. While theoretically, committing to a cooperative is potentially very beneficial, farmers are reluctant to engage in motivated behavior in the form of selling to the cooperative, participating in management, or investing financially (Metzlar, 2015). This study should uncover through a strategic business perspective, why that is. Furthermore, cooperatives are generally started through certification initiatives. This study hopes to find whether there is a link between certification and motivation, as it appeared from Metzlar (2015) that cooperatives created by farmers themselves tended to perform better than those created by certification initiatives. Lastly, this study should uncover how farmers can improve their strategic position in the value chain through collective action.
Therefore, the main question of this study is:
Why is there a lack of motivation and commitment amongst the farmers toward cooperatives, how does certification impact this, and how can farmers work together through cooperatives to strengthen their
strategic position in the global value chain of cocoa?
To answer this, three sub-questions are developed. In this section, they are explained. To begin with, the farmers are analyzed through their strategic intent. This entails what the farmers themselves want to achieve. It will find the farmers’ hopes and visions and to what extent they are motivated and willing to achieve them. This sub-question deals with practical issues of production capacity, whether growth of the farm is something the farmers want, how they see their future, and that of the farm. Hence, the first sub question:
4 Literature on collective action (Markelova et al., 2009; Foss & Lindenberg, 2011; Criaviotti, 2012), and collective external economies (Oughton & Whittam, 1997) argues the benefits and strengths of working together to achieve common goals. The goals of the cooperatives may be well known however the advantages and possibilities as perceived by the farmers is expected to ultimately lead to their motivation and commitment. If the farmers do not fully grasp the potential of working together to create scale and cooperate over input activities such as research, training, finance and marketing via the pooling of fixed costs, the commitment and motivation can be low which is detrimental to the group. The measurement here is through perception, as presented in Davidsson (1991) because if farmers do not know of or believe in the mutual benefits, while these could very well be present, it will impact motivation and hence, commitment. Measuring what the cooperatives currently offer can be an indicator of where the motivational problem may lie. This does have the limitation of a single period measurement. “Farmer organizations should be viewed as a dynamic rather than static process” (Hellin et al., 2009). Therefore, it is also important to consider what the farmers and cooperatives expect will happen in the future. Following from this is the second sub-question:
2. How do farmers perceive cooperatives can help them to strengthen their strategic position in the value chain and what do the cooperatives currently offer?
It is possible that farmers have very distinct ideas about what they want to achieve, what they expect to gain from becoming a member of a cooperative, or what they hope for. The same goes for the cooperatives. Therefore, it can be very beneficial to distinguish certain groups to be able to match them with the best suited certified cooperative or independent farmer organization so as to both benefit from each other’s goals and commitments and allow more structured investment opportunities. “The heterogeneity of smallholders, some market oriented and some subsistence oriented, calls for differentiated agricultural policies that do not favor one group over the other, but that serve the unique needs of all households” (World Bank, 2008). This is true, however, relying on agricultural policies to affect individual farmers is a far-fetched assumption. The heterogeneity must indeed be recognized to better align the demands of the farmers with the respective organization. It is through the coming together of the farmers with collective and mutual goals that action will be taken. The strategic intent of the farmers could be something ambitious like owning multiple farms of different crops, or becoming an entrepreneur further along the cocoa value chain. As well, farmers could be satisfied with earning a living income and the most they ask for is simply better access to production inputs or a higher selling price. If what they want to achieve, measured through strategic intent, is not represented as something to be complemented by collective efforts within a cooperative, the incentive to invest can be expected to be significantly lower than when there is a clear overlap of such goals. This expectation begs for understanding, therefore the third sub-question of this study is:
3. How can the motivation and strategic intent of farmers explain the actions and commitment of farmers (or lack thereof) towards the cooperatives?
5 cooperatives and the alignment of strategic intent with that of the farmers, to increase motivation and commitment, which should ultimately lead to a more effective collective action and hence, a more strategic and strongly positioned organization of farmers.
1.3 Scientific relevance of this study
The purpose of this research is to enhance the understanding of motivation of members of FMOs. In the past there have been many indicators of entrepreneurship, growth, and motivation yet never before has a study focused on motivation of members of a cooperative to work together, especially in the context of FMOs working with certification, a popular and still growing trend in the agricultural sector.
The model developed by Davidsson (1991) which is elaborated in the literature review section incorporated numerous low level explanatory variables which were the result of previous studies. His model shows a clear connection between certain determining factors and motivation, which is useful to distinguish what causes motivation, and what may be missing to enhance motivation. The theory is applied and adapted in this study to the context of cocoa farmers and FMOs in a developing country and geared towards motivation for collaboration instead of growth motivation. It will be shown that the factors influencing growth motivation are indeed very similar to factors influencing motivation for collaboration, something that can be useful in studying groups and cooperatives all over the world and possibly in various industries. Motivation of smallholders has never before been assessed with regard to membership of a cooperative. The study brings to light some of the factors that are present and predominant in affecting motivation of smallholders and can be used in future research regarding smallholders in developing countries, and FMOs engaged in certification. Furthermore, the gathering and analyzing of data and perceptions of smallholder farmers allows for a deeper understanding of the context, and preliminary recommendations for future research in this field.
1.4 Practical relevance of this study
6 For this reason, practical recommendations on motivating members and more effective organization of such cooperatives can play a large role in resolving the issues smallholders face.
1.5 Structure of this study
This paper is structured as follows: first the theoretical background to this research is elaborated, introducing the concepts of GVC, collective action, strategic intent, and finally motivation. The section on motivation is most important as it is the core of the conceptual model used in the analysis. Following the theoretical background, a context is sketched of factors and considerations that must be understood about the research. Next, the research methodology is elaborated. Data gathered through interviews is analyzed in the analysis section, starting with an overview of the three cooperatives, followed by analysis of the measures used and how they relate to the farmers, and finally, the model is engaged to find important and prominent relationships between concepts and variables. This is followed by a discussion which presents an overall interpretation of the results, revises the conceptual model based on findings, and discusses the applicability of the model to such a context. The paper is concluded by answering the research questions, noting the limitations of this study, and giving recommendations for the FMOs as well as future research.
2. LITERATURE REVIEW
In this section, the theory this paper rests on is described. The four main sections are: the global value chain, collective action, strategic intent, and motivation. The theory described here is used throughout the analysis and forms the basis for the research methodology. The first step is understanding the smallholder position in the global value chain of cocoa. Next, how collective action can be seen as a force to strengthen the position of smallholders in the chain, followed by strategic intent of farmers individually and collectively, which leads to the last section: motivation, where theories of motivation in psychology and small business are discussed which make up the foundation of the conceptual model of this study.
2.1 GVC
7 which links in the value added chain can be broken across borders, which links capture a comparative advantage, and thus where resources should be focused (Kogut 1985).
While the global value chain is merely a descriptive construct, recent developments in the framework allow a more analytical approach in determining global income distribution and the identification of effective policy levers to ameliorate trends towards un-equalization (Kaplinsky, 2000). The three key elements of value chain analysis according to Kaplinsky (2000) are: barriers to entry and rent, governance, and systemic efficiency. Barriers to entry and rent are intertwined as competition drives down profits by lowering barriers to entry, and increases as global trade expands into more and more countries. Entrepreneurs in the chain are induced to seek new rents through carrying out new combinations or as Schumpeter (1961) showed, constructing scarcity (barriers to entry). Governance was termed by Gereffi (1994) as actors in the chain who take responsibility for the inter-firm division of labor, and for the capacities of particular participants to upgrade their activities. Systemic efficiency concerns productive integration and close cooperation of the linkages and processes in the value chain. It looks at responsibilities for governance, greater levels of trust, and upgrading of producers in low-income countries (Kaplinsky, 2000). This form of analysis transcends conventional economics through looking at where in an intricate chain, the value is created. “In the forestry and furniture chain, the rent-rich activities are increasingly found in the genetics of seed design and in the design and branding of the furniture, rather than in the individual agricultural, industrial or service sectors” (Kaplinsky, 2000). Similarly, through pressures from consumers, rents in the cocoa sector are increasingly found in retail through branding and certification rather than the agricultural production (Hütz & Fountain, 2015). This does however present opportunities to be exploited earlier on in the chain.
Humphrey (2004) suggests diversification of exports away from commodities as a long-term solution or in the case of agricultural commodities, adding value to existing commodity exports. Trends in developed country food markets along the lines of place of origin, quality, environmental impact, fair trade, etc. seem to be high and offer new opportunities for differentiation and value adding at the start of the chain. Many of the channels used by farmers to sell their cocoa beans work through arms-length relationships and spot purchasing with licensed buying companies (LBCs). Because of this, information and specification can be lost about factors such as: quality, safety, traceability, authenticity, etc. for which buyers have become more concerned (Humphrey 2004). Upgrading and value creation are discussed in the literature however value appropriation is generally neglected (Lutz, 2012). Collective action presents an opportunity for value appropriation through sharing of resources and information and the spreading of fixed costs.
2.2 Collective Action
8 Orientation (EO), are positively related to firm performance. Although the research is oriented towards technological companies in developed countries, the notion is applicable as farmers benefit from shared knowledge of production processes, market opportunities and prices, market actors, and so on. Furthermore, the three dimensions of EO: Innovativeness, proactiveness, and risk-taking, are found to have a strong beneficial impact at the individual as well as firm level. Collective action allows the sharing of such before mentioned knowledge, combined with the proactiveness, innovativeness, and risk taking of members, to allow a high-performance cooperative to exist.
To quickly point out a predominant source of competitive advantage, Barney (1991) conceptualized attributes of strategic resources such as assets, information, and knowledge which, given the firm has capabilities to make use of such resources, should gain competitive advantage. That is, in the case of these resources being valuable, rare, inimitable, and non-substitutable. It was found in Metzlar (2015) that some farmers do indeed have certain strategic resources along with a willingness to grow and an entrepreneurial orientation. Collective action enters the picture as a form of improved access to these strategic resources to gain strength, reach, and efficiency through shared effort in reaching mutual goals. For farmers to become more competitive and increase their share in the chain it is imperative to expand the competitive resources and capabilities (Lutz, 2012). Collective action can be expected to provide the means for farmers to collectively grow, gain strategic resources, and become competitive in the GVC as investments in resources and competencies can be made more easily if the fixed costs can be recouped on a larger turnover.
It has been noted that the major obstacle facing smallholder-led agricultural growth is lack of market access which, when enhanced, will lead to increased incomes and food security, more rural employment, and sustained agricultural growth (Dorward et al., 2003; Stiglitz, 2002; Poulton et al., 1998). For this reason, many collective action initiatives aim to increase the smallholders’ position in the GVC through bargaining power, broader access to buyers and sellers in the market, and increasing quality standards to obtain higher prices.
The prominence of supermarkets as sellers of agricultural produce has its effects on the entire food marketing system. Despite the growing opportunities, there is a danger of large companies squeezing out smallholders from the market, even though they possess some competitive advantage over large producers (Poulton et al., 2005). Cooperatives represent the farmers through resembling a larger company, allowing them to: reduce transaction costs of accessing inputs and outputs; obtain necessary market information; secure access to new technologies; and tap into high value markets, facilitating them to compete with larger farmers and agribusinesses.
9 large potential. The problem exists in the fact that there are certain seasons where money is earned in bulk, and not retained to support the costs of living along with adequate investment for the next season. In such a sector collective action through the sharing of costs, increased market access, pooling of information, and investment opportunities can be extremely beneficial. Furthermore, the before mentioned alternative poverty-reduction strategies are far sought for many smallholder farmers. It is to a very large extent up to them to help themselves and each other.
2.3 Strategic Intent
Strategic intent was introduced by Pralahad and Hammel (1989) as a concept stretching beyond current capabilities and resources, and toward aspirations. Strebel (1994) states that intent is treated as being synonymous with the means envisioned for achieving favorable outcomes. It implies what ultimate goals the (in the case of this study) farmers have for their business. The earliest discussion on strategic intent (Pralahad and Doz, 1987) describes it as the long term goals and aims of an organization for which one cannot plan. The discussion tends towards top management and intent is discussed only in singular form. The same goes for later mentions of strategic intent, where the focus is laid on the C.E.O and top management. This can be seen in Burgelman and Grove (1996) where strategic intent is defined as top management decision. Also, in Noda and Bower (1996) who consider top management’s viewpoint on business as being the strategic intent, and Lovas and Ghoshal (2000) who define strategic intent as a statement of goals articulated by the top management. In this study, the discussion of strategic intent aims to take on a more wholesome approach, where strategic intent is something that emerges from, in the case of cooperatives, the aspirations of all organizational members, and as discussed in Pralahad and Hamel (1994): a dream, an emotion, a distillation of strategy, a goal, and a mission. The same goes for strategic intent at the farm level where it encompasses the dreams and aspirations of the farmer for the future of his or her farm.
Gratton (1994) discusses strategic intent and the necessary linkage with human resource management. She criticizes the corporate rhetoric that accompanies the concept through the use of mission statements and exhortations of managers. As is discussed in Pralahad and Hamel (1989), strategic intent has an emotional attribute, which can be lost through common strategy or mission statement rhetoric. Pitt (2001) conceptualizes strategic intent using a metaphoric approach. He finds that managers draw on experience and intuition as well as rational evaluation to construct intent. He states that “intent can be conceived and captured in quite parsimonious, holistic terms by means of expressive action metaphors”. Also, “particular metaphors are not right or wrong in any absolute sense, only differently illuminating in a given situation”. Metaphors prove to be a powerful tool in bringing to light what exactly one’s strategic intent is. Metzlar (2015) noted that often it was difficult to convey the meaning of certain concepts such as strategic intent to the farmers. In such a case, the use of metaphors can help to expound the farmers’ aspirations, direction, and dreams for the future.
10 down, and in the case of this study, the alignment of the intent of the cooperatives with those of the individual farmers. In the same study, one imperative for defining and aligning strategic intent among workers was to take a longer-term, future oriented perspective. Also, important in the discussion is to move away from current problems and begin by looking to the future.
Pralahad and Hamel (1989) discuss strategic intent as comprising a sense of direction, discovery, and destiny. A sense of direction implies a particular point of view about the long-term market or competitive position the firm hopes to build in the future. A sense of discovery holds in that a competitively unique point of view about the future is discovered. It is the promise of exploring new competitive territory. Sense of destiny relates to the emotional edge linked with strategic intent. It is a goal that employees perceive as inherently worthwhile. It is without these three attributes that a lack of strategic intent can lead to apathy and a lack of motivation and commitment. It could very well be that some farmers are fully content with the way their farm operates and have no significant aspirations for such future change. However, Metzlar (2015) found that many farmers do indeed have a strategic intent through legitimate goals and aspirations. These are likely to coincide with those of other farmers, making room for potentially profitable collective action opportunities.
There seems to be a significant lack of literature on strategic intent, especially in the context of the developing world and agriculture. It seems the popularity of the concept is vast, with numerous mentions of the concept in publications, yet a fully developed measure of strategic intent is still lacking. Nevertheless, in this study it is seen as an important indicator of motivation and will be developed while considering the three attributes mentioned earlier: a sense of direction, discovery, and destiny (Pralahad and Hammel, 1989).
2.4 Motivation
Shane (2006) states that “when an individual faces the same opportunities and has the same skills, information, and opportunity cost, the person with certain motivations will exploit opportunities that others will not”. The discussion here leans towards entrepreneurial orientation and although it is relevant, collective motivation requires a more communal ideology and less of a ‘desire for independence’ as is an aspect of motivation elaborated in Shane (2006). Entrepreneurial motivation can be an explanation in the case of cooperative membership through the choice of either being an independent small business owner (smallholder) or committing to a cooperative which leans more towards employment on the spectrum between being an independent small business owner and employment.
11 Willer also states that groups show greater esteem toward members who make greater contributions to the collective good. It incites a form of altruistic behavior which is expected to influence motivation through personal gain.
2.4.1 Motivation in Psychology
When discussing motivation, psychological theories should also be considered. Maslow’s hierarchy of needs theory (Maslow, 1954) suggests that when an individual operates above subsistence level, he is likely to have his lower-order needs substantially satisfied. Goals other than financial are important determinants of behavior and higher order needs will be motivators for collective action only when these are regarded as intrinsically rewarding. Another relevant theory is expectancy theory (Vroom, 1964) according to which an individual will act in a certain way depending on the expectation of a certain outcome and the relation between that outcome and the goals of the individual. Therefore, in the case of this study, it is important to determine the relative importance of the weighted sum of expected outcomes of collaboration in a cooperative. McClelland’s (1961) achievement motivation theory says that different people have different levels of Need for Achievement (nAch). Those with high nAch strive for achievement satisfaction, a concept closely linked with studies on entrepreneurship (McClelland, 1965).
Locus of Control (LOC) is related to motivation, effort, performance, satisfaction, perception of the job, compliance with authority, and supervisory style, as well as an important moderator between incentives and motivation, and satisfaction and turnover (Spector, 1982). The more a person is oriented towards internal control, the more he will be motivated to take actions and will have a high performance-to-outcome expectancy. Individuals with a more external locus of control can be expected to wait for commands and remain passive until circumstances change. They are expected to lay blame on outside influences. In the study of Frantz (1980) it was found that increases in hourly earnings, additional labor market experience and a larger number of years of formal schooling increase feelings of internal control. Furnham (1986) develops an economic locus of control scale, divided into four factors: internal, external, chance, and powerful others. It comprises 40 items used to assess an individual’s belief in how much control they have over the work and money-related aspects of their lives. A follow-up study by Van Dalen, Van Niekerk and Pottas (1987) supports its validity in a South African sample. The scale was used by various authors including Heaven (1990), and Sakalaki, Richardson, and Bastotnis (2005). Furnham (1986) mentions in his conclusion about the scale that it: “is likely that it would predict investing, saving, purchasing decisions, and other forms of economic behavior”. Also, he endorses adaptation of these scales as “it seems reasonable to expect that specific measures predict specific behavioral variables better than generalized unidimensional locus of control measures” (Furnham, 1986).
2.4.2 Motivation in Davidsson (1991)
12 variables are high it can be expected that there is strong motivation for growing the company. The variables can also be expected to significantly explain collective motivation for engaging committedly in a cooperative, given that collective action is perceived as a means to grow.
The subjective measure perceived ability is determined in Davidsson (1991) through the person’s locus of control. Perceived need is determined through economic satisfaction and need for achievement. Perceived opportunity is determined through perceived external obstacles, perceived barriers to entry, and perceived room for growth. Together they make up expectancy theory through the expectations of individuals about possible opportunities.
Need is determined in Davidsson (1991) through the Firm’s age and size which tend to be negatively correlated with growth. An explanation of this is that when the firm reaches a certain size or a higher age, it is more likely that the firm is viable doing what it is currently doing. This also holds for the owner-manager’s age which can be understood as negatively correlated because an older individual is likely to have a lower objective need for additional income. “What constitutes relevant ability depends very much on the context” (Davidsson, 1991). Ability is understood in the study of Davidsson through level and duration of education, types and breadth of experience, and management team building but as the quote above points out, relevant ability depends on the context. Therefore, when speaking of farmers and cooperatives, agricultural training and experience becomes an important determinant of ability. Opportunity is assessed in Davidsson (1991) through industry fragmentation, market size and growth, entry barriers, and access to capital and labor. Again, the context is an important factor to consider and thus has its strong influence on the measurement of opportunity. An elaborated model with all measures used by Davidsson (1991) can be found in Appendix 9.1
13 Figure 2.1 Davidsson (1991) model of growth motivation
Ability Perceived
Ability
Need Perceived Need
Opportunity Perceived Opportunity Growth Motivation Actual Growth
In Davidsson (1991) Growth motivation is entirely the result of reality as perceived. In this study, motivation towards the cooperative is also the result of reality as perceived and thus perceived need, perceived ability, and perceived opportunity is understood in the context of the cocoa farmers. Along with this, to better understand the influencing factors, objective Ability, Need, and Opportunity will be assessed and used as a lens through which to understand the perceived factors and their possible direct effects on Action.
3. CONTEXT
This section sketches the context of the study. It includes the political and economic situation Ghana is currently in, especially related to the cocoa sector, an overview of the selling chain and the relevant parties involved, as well as the culture of the country, the influence certification brings, and the cooperatives. It is important to note that the findings of this study can be very context specific and limited in their generalizability therefore this section hopes to enlighten results with a more detailed understanding through which to see the conclusions. Information in this section has been gathered from various experts, relevant websites, and the interviewees.
3.1 Cocoa sector
14 accounts for 8.2% of the GDP and 30% of export earnings in 2010. (Tawiah, 2015). Total production grew from 450,000 tons in 2000 to 900,000 in 2010. The table below shows some more economic figures. Table 3.1 Economic Environment
GDP $108.3 billion
GDP per capita $4,129
Unemployment 2.40%
Inflation 15.50%
FDI inflow $3.4 billion
Cocoa is mainly produced in West-Africa yet the consumption takes place all over the world. Cocoa grows in pods on the Theobroma Cacao tree, containing 30-50 beans per pod. The cocoa tree grows at altitudes below 300 meters and survives best in temperatures between 21 and 32 degrees (Fenger, 2013). For this reason, Ghana and Cote d’Ivoire are such large exporters of the crop as their climate and topography facilitate the natural growth of cocoa trees. Cocoa was introduced in Ghana during the 19th century and has
thrived as an export product ever since.
Up until 1976, Ghana was the biggest exporter of cocoa in the world (Jukofsky, 2002). Following this, the country struggled with low production due to ageing trees, low prices and the smuggling of beans and inputs into neighboring Cote d’Ivoire. Due to the importance of cocoa for the Ghanaian economy, the government introduced the Ghana Cocoa Board (COCOBOD). COCOBOD retains full control over export and oversea shipments to ensure quality control. The price of cocoa is set by a sub-division of COCOBOD. Although it allows efficient price setting and overseas trade agreements, the board received resistance from farmer groups and has been continuing to liberalize the cocoa sector and introducing more effective payment systems. The board has set a minimum producer price as well as continual subsidies for the inputs needed by smallholders such as covering the costs of seedlings, farm inputs, and indirectly through road and infrastructure improvement (Chuhan-Pole & Manka, 2011)
Sub-divisions of the COCOBOD include the Cocoa marketing company (CMC), the Cocoa Research Institute of Ghana (CRIG), the Seed Production Division (SPD), the Cocoa Health and Extension Division, the Quality Control Company, and the Producer Price Review Committee (PPRC). Each has different initiatives and functions that together aim to improve the ease of transactions, quality of produce, and the welfare of farmers and the country as a whole.
3.2 Selling chains
15 Figure 3.2 Map of supply chain including PCs and LBCs
Purchasing clerks are linked to their respective LBCs. They receive money from LBCs one week (or less) in advance to buy dried beans from farmers. Farmers are paid up front or very quickly because competition between LBCs and PCs is fierce and farmers can easily switch to one that pays more quickly. PCs often have the means to help farmers in transporting their cocoa, and occasion the first stage of delivery of cocoa to the LBCs. PCs gain a commission from their purchases and so are often in competition with other PCs in the same community. Therefore, they try to create relationships with their sellers. PCs also sometimes have the financial freedom to give loans to certain farmers which can work as a guarantee that the farmer will then sell to that PC and pay back the loan in the form of cocoa beans. There have been issues reported about certain PCs who misuse their power over farmers, by manipulating weighing stones and then paying less than the cocoa is worth, or demanding a high interest on the loans they give. As many farmers are illiterate or unable to do calculations, their trust in the PCs is easily taken advantage of. In this sense, when a loan is given, an amount of cocoa worth double the amount of the loan can be demanded from the farmer as repayment without the farmer fully comprehending the value of the cocoa beans. This being said, PCs are however generally trusted and hardworking members of the community that through their position are in close contact with many farmers and aware of trending issues within the communities.
Traders and processors make forward contracts with COCOBOD from which the producer price is determined for that year. Next, COCOBOD agrees to buy a certain amount of cocoa from the Licensed buying companies (LBCs) and soft loans are given to the LBCs. LBCs are the buying companies that are present throughout the cocoa belt. They receive 9% commission at the end of the season for the cocoa that they buy from farmers and sell to COCOBOD. The largest LBC is PBC Limited which evolved from the Produce Department of COCOBOD and was initially state owned. Armajaro (3rd largest), and Kumankoma (no. 13,
figure 3.3) are the two LBCs that have contracts with the cooperatives studied in this thesis.
On the 2nd of October, 2015 the price for the upcoming harvesting season was announced by the PPRC at
GH¢ 6,720.00 per tonne. This translates to GH¢ 420 per bag. On top of this, COCOBOD has decided to pay farmers an additional GH¢ 5.00 per bag which gives a total of GH¢425 per bag to each farmer. Certified beans receive an additional price premium on top of this price.
Price per tonne = GH¢6,800.00 (74% of net FOB price)
Fa rmers Purchasing Cl erk (PC) Li censed Buying Company (LBC) Cocobod
Tra ders
16 COCOBOD sells the cocoa to traders such as Wienco, who distribute the cocoa beans internationally. COCOBOD also sells beans to processors who take on other value adding activities further along the value chain such as making cocoa butter and powder.
Figure 3.3 Licensed Buying Companies
Cocobod. (2014). 45th Annual Report, Accra: Buck Press Ltd.
3.3 Culture
It seems from chatting with various locals, and the numerous quotes on the Ghanaian style paintings that line many of the crafts streets (eg: “no food for lazy man”), that there is quite a mentality of internal locus of control. The government does not support those without work as is done in many other countries through unemployment benefits, and Ghanaians know that. They seem to understand very well that success comes from working and not waiting for external influences. Women in Ghana work hard and long and engage in heavy manual labor. A great motivator seems to be making money to have and support a family. Through this there does appear to be quite a high level of need for achievement within most Ghanaians. Even with often very limited opportunities, people seem to work hard.
Religion & cultural dimensions
Traditional religions account for 5.2% of the population. 71.2% of the population is Christian and 17.6% is Muslim and located mainly in the northern part of Ghana (Ghana Embassy).
17 Bosses are accepted as autocratic and centralization is a strong factor. This can be expected to reflect the ‘powerful others’ factor in studying locus of control. An explanation for a high score on this factor can be grounded in culture.
Ghana is considered a collectivistic society, with a score of 15 on individualism. This means a close, long-term commitment to groups, be it family, extended family, or extended relationships. From this score, one can expect collective action in the form of cooperatives to be valued highly. In collectivistic societies, people belong to groups that take care of each other in exchange for loyalty.
Ghana is considered a relatively feminine society with a score of 40 on the masculinity dimension. In these societies, the focus is on “working in order to live”, something that can be seen through simple observation, seeing people working constantly along the streets, knowing that without work there is no gain. Status is not so much the motivator but quality of life is a driving force. Conflicts are resolved through negotiation and compromise.
On the uncertainty avoidance dimension, Ghana scores 65, showing that there is a preference for avoiding uncertainty. There is an emotional need for rules, there is an inner urge to work hard, while innovation can be resisted and security is an important element of individual motivation.
Lastly, long term orientation in Ghana scores extremely low, with a 4 on this dimension. This indicates that Ghanaians prefer the normative way of thinking, they respect traditions, lay their focus on achieving quick results and have a relatively small propensity to save for the future. The issue of saving is an important one for farmers who work seasonally. They can earn money in bulk during the harvesting season but fail to save enough to adequately invest in their farm for the next season (Metzlar, 2015).
3.4 Farmers
There are about 720,000 cocoa farmers in Ghana. They have on average around 3-5 acres of land dedicated to cocoa farming. 90% of all cocoa exported from Ghana is grown by smallholder farmers. This accounts for around 25-30% of the population (Anthonio and Aikins, 2009), In most cocoa producing households, cocoa accounts for over 67 percent of household income (Kolavalli and Vigneri, 2011).
18 From the analysis it appeared that the average farm size of all interviewees was around 8 acres. Mostly the farmers became farmers after inheriting land from their parents. It is well known within the farmer communities that there is hardly any extra land available to be bought, therefore sharecropping is done to still allow farmers to gain and expand their land and thus the yield. Sharecropping is done in three separate ways: Abunu, Abusa, or Abunan. Abunu holds in that the farmer becomes owner of 50% of the land at the end of their contract and during the time that he is working on the land, the yield is split equally between sharecropper and owner. The Abusa deal means that the sharecropper obtains one third of the turnover, the farmer does not inherit any of the land at the end of the contract. Last, Abunan, which is where the worker takes one quarter of the production and receives no land at the end of the contract. From the farmers interviewed, it appeared that the deal most often made was Abunu.
Knowledge source
Farmers were asked from where or from whom they learned the most about cocoa farming. Answers varied between family as a source, the trainings from the cooperative, from friends, and from school. Generally, farmers learned about cocoa farming from their families. Trainings from the cooperative are seen more as supplementary knowledge than a definite knowledge source. All but one farmer said they learned about farming from their family. The one farmer in question is a migrant farmer who came from the north of Ghana where cocoa does not grow. His family remains in the north but he saw cocoa farming as an opportunity and moved to Asankragua to start his family and farm. This happens quite often in Ghana as although cocoa farmers generally work below the poverty line, it is often much harder to earn a living in the dry north. It is true that farming tends to be a family business, where land and knowledge is passed on through generations. It is possible the farmers feel that the trainings from the cooperative function as fine tuning the skills and knowledge they already had before and received from their family. Four of the thirty farmers indicated that they also learned about cocoa farming from school. These are farmers that had an education geared towards agriculture, three of them having an education up to the JHS level, the other one has a university degree in agriculture, both levels are higher than the average level of education.
Trainings
Trainings from the cooperatives were said to include teachings on: pruning, disposal of chemical containers, budgeting, spraying, weeding, cutting of chupons and mistletoes, breaking of pods, financial management, and others. The trainings varied slightly between cooperatives as the certifications they deal with are also different and the trainings are geared mainly towards the certification standards. In the region of the ABOCFA cooperative, trainings were also geared towards issues of child labor and financial management, stemming from the Fairtrade certification standards. In the region of the iMPACT Asankragua cooperative, there was no mention of trainings on breaking pods as was told in the regions dealing with Organic certification. In those regions, farmers were taught not to use a cutlass that had also been used to break pods of non-certified cocoa, and to wash the cutlass after ever 10 opened pods.
19 themselves and the farms in general. All farmers have received trainings because they are all members of the cooperatives.
Increasing land
Increasing farmland size is a big issue for all farmers in all the regions studied. It is near impossible to buy new land because it is simply unavailable. This issue is furthered through certification regulations such as with Rainforest Alliance’s focus on protecting biodiversity and forest land. Through this, no forest land can be cleared to make room for cocoa farms. Also, in the rare occasions that a piece of land is available, the costs of buying land make it even more unattainable for farmers who generally do not have enough money for such acquisitions, nor facilitated access to adequate loans for such purposes. It was noted that sometimes to buy land, one must take advantage of a farmer who is desperate for money and therefore will be willing to sell his land for a very low price.
Sharecropping
Seven of the 30 farmers interviewed were engaged in a sharecropping agreement, many of them will inherit half of the land in question at the end of the Abunu contract which make up 6 of the 7 cases. The other sharecropping agreement is an Abusa agreement where a third of the turnover goes to the farmer, and none of the land is inherited at the end. Abunan agreements are least beneficial for the caretaker and therefore most unpopular.
Family
Farmers’ families are very often mentioned to be the most important reason for working hard on the farms. The average size of the households of interviewed farmers is 6.9 and the largest recorded was 15. Farmers are often the main source of income for families and thus feel they are the provider for the family. The measure does not account for jobs of the individuals. For example, Farmer 18 has a household of 15 members, but it was said that many of them have other jobs such as one who is a welder, another is an electrician, and another is a container maker.
Savings
20 costly and frequent happening in Ghana (because of the large number of people invited). These schemes turn out to appear more as an insurance and do not allow farmers to safely store and retrieve their money. Given the scope of cooperatives and their infrastructure, saving schemes would present a welcome opportunity for farmers to be more financially aware and could give the cooperatives leniency in available funds when necessary.
Hiring labour
Farmers often hire workers to work on their farm land because the work-load can be too much at a certain point in time, especially harvesting season. This is done through the Nnobua system or a more direct form of paying for workers to work on the farms. The price that this costs differs between seasons as during the harvesting season more land owners are in need of support and prices increase. Farmers with large farm sizes will do this quite often and are thus able to have many and large farms. An example is farmer 1 with 38 acres of farm land, who indicated that he personally hardly ever works on the farms, and only checks whether his workers are doing a good job.
A quite novel movement has been by the initiative of the Agricultural Service Agency (ASA) which poses an investment option for smallholders. They provide two types of service. The first is of transaction activities. Here, farmers buy services from ASA such as pruning or weeding which is done in accordance with any certifying regulations. The farmer pays in advance and still runs the farm, meaning all the cocoa harvested belongs to the farmer. The second service holds in that ASA takes over the full operations of the farm. The farmer thus completely outsources the activities and pays ASA in bags at the end of the season. This is an attractive option to farmers who own land and trees but have other responsibilities or lower farming experience. It is similar to the efforts of one cooperative studied, which organizes a pruning and spraying gang to cover all member’s farms. They work efficiently and effectively and allow for the spreading of costs for things such as organic pesticides.
3.5 Certification
There are many certifying organizations and brands in the cocoa industry, mainly focused on benefitting local farmers and the environment. Certification offers various benefits and opportunities to farmers which are especially facilitated when supported by cooperatives. There are however some drawbacks to be considered through the ongoing debate on market share and access for certified products, and the proposed lower yield of organic produce. The three certification labels this research deals with are Organic, Rainforest Alliance (RA), and Fairtrade (FT).
