A nation-wide cocoa traceability system for Cameroon, from farmgate to port of exit

The presentation that the Transparent Voice consortium (Kooko, Wagneingen University and C-Lever) delivered on 6 April 2022 to some 40 stakeholders in the cocoa value chain in Yaoundé, Cameroon was one of the outcomes of the IDH and ONCC financed study to design a national traceability system for cocoa in Cameroon, from farm to farmgate and onto port of exit. Explained fully in the final report, at the core of this innovative concept in traceability systems, lies financial traceability with aligned incentives. This concept presents a new incentive model called "Impact Value Adjustment (IVA)". The IVA aims to consolidate and incentivise the environmental, social and governance work conducted by farmers that are the starting point for a transparent, traceable, equitable and sustainable cocoa value chain originating from Cameroon. In essence the IVA is the inverse of a Value Added Tax (VAT) system, as the value accumulated at the start of the value chain by farmers is dynamically incentivised for the environmental and social impacts their farming practices deliver.

This project intends to set up a new, future proof, paradigm for traceability. To unleash the full potential for Cameroon’s cocoa (and other agricultural) value chains, it is essential to break free from the old mindset that limits the scope and impact of traceability by viewing it simply as a means of compliance with externally driven requirements. Through the course of our investigation a clear vision for the traceability system has taken hold. The vision relates to how various dimensions of traceability impact farmers, buyers, traders, exporters and processors at individual, regional and national levels and how this fits in evolving international supply chains. Firstly we aspired to develop a traceability system that empowers a new generation of digitally enabled agri-entrepreneurs. Data and transparency should support and accelerate the competitiveness of our national farming community and agricultural value chain actors. In many other areas, Africa has shown the lead in anticipating and adopting new uses for mobile digital technology. A new generation of farmers and agricultural value chain actors are already using digital technology in various aspects of their lives. A national traceability system should support them by providing access to and benefits of better data. We envisage a system that promotes, exposes, and leverages sustainable farming practices, rather than simply applying a punitive gate for compliance. We need to elevate the information generated by the system from “data” to “intelligence.” A system, where Environmental, Social and (good) Governance (ESG) achievements are captured, where trustworthy ESG data are captured and transmitted along the value chain together with the cocoa, and where the sustainability achievements are equitably rewarded.

This model is based on pricing structures for hybrid (data + beans) cocoa, where the (trustworthy) sustainability data of the cocoa are an integral part of the traceability dataset. This digital and data led approach promotes a transparent value chain where ESG achievements are leveraged, and where all actors in the value chain transform into sustainability driven entrepreneurs. We thus envisage an interoperable traceability system, reliable from farm level to port of export, providing substantial due diligence support to clients further down the supply chain, allowing them to effectively identify and mitigate their ESG risks. Cocoa traceability can contribute to leveraging and valorising environmental assets (forests and biodiversity) and social assets (many smallholder cocoa farmers) in cocoa producing areas in Cameroon. Ultimately, such a systems aims to differentiate Cameroon as a reliable, valuable, sustainable, and efficient country of origin for cocoa.