Public-Private Partnership Design for Inclusive Cocoa Global Value Chains in Ghana Prepared for: Curt Reintsma, Food Security Partnerships Specialist United States Agency for International Development (USAID) Prepared by: Bahari J. Harris Master of Public Policy Candidate The Sanford School of Public Policy Duke University Faculty Advisor: Fernando Fernholz Disclaimer: This student paper was prepared in 2016 in partial completion of the requirements for the Master’s Project, a major assignment for the Master of Public Policy Program at the Sanford School of Public Policy at Duke University. The research, analysis, and policy alternatives and recommendations contained in this paper are the work of the student who authored the document, and do not represent the official or unofficial views of the Sanford School of Public Policy or of Duke University. Without the specific permission of its author, this paper may not be used or cited for any purpose other than to inform the client organization about the subject matter. The author relied in many instances on data provided by the client and related organizations and makes no independent representations as to the accuracy of the data. Table of Contents EXECUTIVE SUMMARY ...................................................................................................................................................... i POLICY QUESTION ........................................................................................................................................................... i ASSESSMENTS / METHODS / ANALYSIS ......................................................................................................................... i RECOMMENDATIONS ...................................................................................................................................................... i INTRODUCTION .................................................................................................................................................................. 1 POLICY QUESTION ........................................................................................................................................................... 1 PROBLEM STATEMENT AND STATEMENT OF INTENT ................................................................................................ 1 BACKGROUND .................................................................................................................................................................. 1 USAID and the Government of Ghana ................................................................................................................ 2 Smallholder Producers ............................................................................................................................................ 2 Lead Firms .................................................................................................................................................................. 2 ASSESSMENT OF LITERATURE ...................................................................................................................................... 3 Supply-Side Bottlenecks ......................................................................................................................................... 4 Low Value-Added GVC Traps .............................................................................................................................. 5 Pro-Poor Design Deficits in Current Interventions .......................................................................................... 7 ANALYSIS OF POLICY OPTIONS AND POTENTIAL RECOMMENDATION FRAMEWORK ........................................ 8 METHODS/ANALYSIS ..................................................................................................................................................... 9 Cases Analysis Dimensions .................................................................................................................................. 10 COMPARATIVE CASE STUDIES ....................................................................................................................................... 11 CASE STUDY I - PILOT PROJECT TO PROCESS COCOA BY-PRODUCTS IN GHANA ................................................... 11 Preface ............................................................................................................................................................................ 11 Key Features of Project ............................................................................................................................................... 11 PPP Analysis Matrix................................................................................................................................................... 14 CASE STUDY II - JUAN VALDEZ COFFEE SHOPS: FAIR TRADE AS AN INCLUSIVE AND SUSTAINABLE BUSINESS .18 Key Features of Project ...............................................................................................................................................18 PPP Analysis Matrix................................................................................................................................................... 22 CASE STUDY III - PUBLIC-PRIVATE-PRODUCER PARTNERSHIP CASE STUDY: RWANDAN TEA .......................... 26 Key Features of Project .............................................................................................................................................. 26 PPP Analysis Matrix................................................................................................................................................... 32 SUMMARY OF COMPARATIVE CASE STUDIES............................................................................................................... 36 KEY INFORMANT INTERVIEWS .................................................................................................................................... 38 Overview ....................................................................................................................................................................... 38 Ghana Cocoa Board – COCOBOD .......................................................................................................................... 38 Assinman Young Cocoa Farmers Association ...................................................................................................... 41 Cocoa Research Institute of Ghana – CRIG ......................................................................................................... 45 SUMMARY OF KEY INFORMANT INTERVIEWS ............................................................................................................. 49 RECOMMENDATIONS...................................................................................................................................................... 50 NOW ............................................................................................................................................................................... 50 NEXT ................................................................................................................................................................................51 LATER ............................................................................................................................................................................. 53 Appendix ........................................................................................................................................................................... 54 A - Distribution of Value Along the Cocoa-Chocolate Value Chain ............................................................... 54 B – Volume of Certified Cocoa Produced and Sold by Certification Scheme, 2012 ..................................... 54 C – Assumed sale prices of raw materials and by-products (at 2001 prices) used in Cocoa By-Products Feasibility Analyses .................................................................................................................................................... 55 D – National Federation of Coffee Growers of Colombia (NFC) Subdivisions ........................................... 56 E – Juan Valdez Coffee Shops Fair Trade Chain Business Model .................................................................... 57 F – Rwandan Tea PPPP Development Outcomes (Anecdotal Evidence of Income Increase) ................... 58 G - List of Key Informant Interviewees.................................................................................................................. 59 H - Map of Interview Locations .............................................................................................................................. 59 I - AMCOFA Official Cooperative Certificate of Registration ......................................................................... 60 EndNotes ............................................................................................................................................................................61 EXECUTIVE SUMMARY Within 10 years, there could be a severe global shortage in the supply of cocoa, according to industry practitioners and other experts. Due to global population growth and the emergence of a growing global middle class, by 2025 the cocoa crop would need to increase