To illustrate this, let’s look at the cocoa value chain in the world’s 2nd-largest cacao producer: Ghana. The cocoa value chain in Ghana starts with a base of around 800,000 cocoa farmers, most of whom have 2-5 hectares of land planted with cocoa. Because cocoa prices paid to farmers are quite low in Ghana— around $100USD per 62.5 kg bag— most farmers can’t afford to buy fertilizers, pesticides, and equipment needed to increase yields. Additionally, cocoa prices in Ghana are set by the government via the Ghana Cocoa Board (COCOBOD). Almost all Ghanaian cocoa is bought for the same price, no matter how high the quality nor how far the farmers traveled to reach the buying center.
Some farmers are members of a cooperative which processes their cacao, lowering how much money goes to farmers, but also lowering transportation costs. There are a few organizations working with the government to buy higher quality cocoa at higher prices, notably Kuapa Kokoo Limited, but they represent a small portion of buying activities.The cocoa value chain in Ghana starts with farmers, continues with government or government-certified buyers, and is then processed domestically or sent abroad.The cocoa processed domestically is turned into cocoa mass, cocoa butter, and cocoa powder, and then largely sent to international markets.