GHANA - Ghana is advancing its cocoa industry’s sustainability efforts with the implementation of a comprehensive traceability system designed to comply with the European Union's new deforestation law. 

The European Union Deforestation Regulation (EUDR), set to take effect at the end of December 2024, mandates that importers of commodities such as cocoa, coffee, and palm oil must demonstrate that their supply chains are not contributing to global deforestation. Failure to comply could result in fines up to 4% of their turnover.

Michael Amoah, representing the Ghana Cocoa Board (Cocobod), announced that Ghana has successfully piloted a traceability system that maps cocoa farms and tracks beans from production to export. 

“We have polygon-mapped all the cocoa in Ghana and established an end-to-end traceability system,” Amoah said during a webinar hosted by environmental organizations Fern and Mighty Earth. 

This proactive approach is crucial for Ghana, which exports approximately 60% of its cocoa to the EU and relies heavily on the cocoa industry for employment, with around 17% of the workforce involved in this sector.

Challenges and government support

The EUDR requires proof that cocoa farms are not located on land deforested after 2020, a significant task for Ghana's smallholder farmers who operate in remote areas. 

To address these challenges, Cocobod’s traceability system is intended to provide buyers with geolocation data that confirms compliance with the new regulations. This effort aligns with Ghana’s broader strategy to enhance the sustainability and transparency of its cocoa supply chain.

The new EU law is expected to reshape global commodity markets by imposing stricter requirements on supply chains to address deforestation. Critics argue that it could disadvantage small-scale producers in developing countries.

In addition to the traceability system, the Ghanaian government has recently announced a nearly 45% increase in the state-guaranteed price for cocoa beans. 

Effective from the start of the 2024/25 crop season in September, the new price of 48,000 cedis (US$3.05 thousand) per ton is aimed at boosting farmers’ incomes and reducing cocoa smuggling.

African cocoa marketplace launch

In parallel with Ghana’s regulatory advancements, the African Cocoa Marketplace (ACM) has introduced a digital platform designed to connect African cocoa producers with global buyers and investors. 

The platform, launched at the onset of the 2024-25 harvest season, seeks to highlight the sustainability, quality, and historical significance of African cocoa.

“Our platform makes it easy for both parties to share their value propositions and demonstrate evidence of best practices to potential business partners,” Dr. Kristy Leissle, CEO and founder of ACM, emphasized the platform’s role in enhancing transparency and traceability. 

The ACM’s rigorous certification process ensures that marketing claims by sellers are verified, further supporting transparency throughout the cocoa supply chain.