The organization, whose members are cocoa producing and consuming countries, has added these two elements as further recommendations to increase living income for farmers.
All efforts must go to increasing living income
Speaking in the Dominican Republic at the 3rd World Cocoa Conference, Dr Jean-Marc Anga, executive director of the ICCO said: "The global cocoa value chain is as strong as its weakest link and at the moment cocoa farmers represent the weakest link."
He said all efforts must go towards increasing the income of farmers if sustainability is to be credible.
"We believe it is critical to address the issue of farmers’ income if we want to secure the long term supply of cocoa both in quantity and in quality,” he said.
The ICCO made two key recommendations to achieve this aim at its 2nd World Cocoa Conference in Amsterdam in 2014. The first was to avoid a structural supply surplus that would lead to a drop in prices, while the second was to diversity crops cultivated to help farmers guard against price fluctuations.
The ICCO said these recommendations still stand, but now it plans to add a third component, which it calls “Injecting innovation in the cocoa value chain.”
This is comprised of two elements:
a) Helping existing farming organizations to be strong and commercially orientated.
b) Gradually introducing larger estates in historically smallholder growing regions.
Cocoa needs to be a business: ICCO
"We're not advocating the large plantations to take over the cocoa sector," Dr Anga said in a later interview with ConfectioneryNews. “What we're advocating is that existing cocoa farmers try and practice what is good in the practices of the large plantations. But they have to remain in control of their farms."
He said this required “mentality change.”
"The current mentality in Africa and Asia is that of smallholding, in which farms are transmitted from generation to generation, it's not so much a pursuit of economic profitability. It's a way of life.”
"What we're advocating is that you have to move from cocoa being a way of life to cocoa being a business,” he said.
The smallholder sector
It comes as yields are not increasing in cocoa as quickly as in other sectors such as coffee and rubber, said the ICCO executive director.
ICCO estimates that global cocoa yields averaged 0.5 MT per hectare in 2013.
“Ten years from now despite all the efforts that we are putting in place [from government & industry] we don’t really see the picture changing dramatically,” said Dr Anga.
The organization expects yields to rise to just 0.6 MT per hectare by 2026.
"Unless we find a dramatic way to increase the yields of cocoa, I'm afraid we will not be able to sustain what we face in terms of deficit in the years to come,” said the ICCO chief, adding that farmer income would therefore remain modest in the decade to come.
'Very large' deficit afoot
The ICCO estimates 95% of the world’s cocoa comes from five million smallholder cocoa farmers, while the professional sector makes up just 5% of global supply.
Dr Anga said cocoa was the main income source for many smallholders, which he said operate under inefficient and uneconomic production systems.
He said the ICCO is set to forecast a “very large” cocoa deficit for the current cocoa season.
“What we have been dreading a long time…climate change is affecting production,” he said in his keynote speech.