Cargill celebrates licensed buying company

Cargill has celebrated the establishment of its own licensed buying company (LBC) – Cargill Kokoo Sourcing – in Ghana, with the company’s new cocoa purchasing model introducing a “first of its kind” digital payment for farmers.

The LBC, which has been fully operational since November 2016, allows Cargill to directly source cocoa from certified farmers in Ghana for the first time, putting the farmer at the heart of its business. So far, over 25,000 farmers are registered, of which 9,000 are actively pursuing selling beans through Cargill’s LBC network.

Cargill already sources directly from farmers and farmer organisations in other origin countries. Moving to this model in Ghana means that the company will be better positioned to efficiently implement the Cargill Cocoa Promise at scale and better serve its customers.

The purchasing model is built on the principles of sustainability and full traceability in Ghana. Farmers deliver their cocoa to community warehouses where their beans are digitally weighed in front of them, assigned a fully traceable barcode, and funds are then transferred straight to the farmer’s phone or e-wallet using e-money through partnerships with e-Zwich, MTM mobile Money and Tigo Mobil Money. The move to mobile money in Ghana adds assurance for the farmer, improves their ability to trade more effectively and eradicates all risks associated with cash payments.

Details of the beans are then recorded in a standardised management system before the beans are collected by larger trucks, which transfer them to central warehouses. Through Cargill’s new barcode system, the company can now trace each individual bag of Ghanaian cocoa beans, sourced through the Cargill LBC, to the individual farm, creating a fully traceable supply chain down to farmer level for the first time in Ghana.

Lionel Soulard, managing director for West-Africa at Cargill Cocoa & Chocolate, says, “Never before has it been more critical for cocoa farmers in Ghana to be the master of their own destiny and improve their own livelihoods. With the introduction of an innovative digital payment system, or mobile money for short, this first of its kind initiative at scale in Ghana is creating a great opportunity for smallholder finance at the farm level.

“We strongly believe that this way of doing business is the future for cocoa farmers in Ghana. Mobile money is the first step towards improving incomes for farmers, as we build the infrastructure and capabilities for a more efficient and effective supply chain. Our aim is to create an enabling environment for smallholder finance for the future, resulting in better entrepreneurial spirit already noticeable at the farmer level.”

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