Report: Securing the Future of Cocoa Agroforestry in Ivory Coast: The Importance of Financing Land Certificates for Smallholder Farmers
Land certification is a fundamental enabling condition for the successful implementation and continuity of agroforestry programs in Côte d’Ivoire, the world’s largest cocoa producer, accounting for around 40% of global production. Not only does it secure land tenure, but in the case of Cote d’Ivoire, tree tenure as well.
Land certification is a fundamental enabling condition for the successful implementation and continuity of agroforestry programs in Côte d’Ivoire, the world’s largest cocoa producer, accounting for around 40% of global production. Not only does it secure land tenure, but in the case of Cote d’Ivoire, tree tenure as well.
One of the barriers to land certification is the cost of obtaining the certificate and a lack of resources to finance it. Public financing remains scarce, and financial institutions are often hesitant to invest in the agricultural sector at large, perceiving it as high risk due to to climate change, fluctuating market prices, but also lack of collateral from smallholders that a land certificate would represent.
Through this study, IDH aims to foster the enabling environment for agroforestry for smallholder cocoa farmers by exploring pathways to bring affordable financing for the acquisition of land certificates.
The goal is for this initiative to eventually benefit all smallholder farmers, enabling them to fully leverage their primary asset: their land.
The study was co-funded by IDH’s LDN Technical Assistance Facility and the ISLA program. Its primary objective was to ascertain a business case for land certification in rural areas, mainly targeting smallholder cocoa farmers. To achieve this goal, a qualitative and quantitative survey was conducted among smallholder cocoa farmers across 12 regions of Côte d’Ivoire, with cocoa plantation sizes ranging from 0–10 hectares, and farmers who work closely with cooperatives. Data collection was also carried out with financial institutions, cooperatives, ECOOKIM and the Rural Land Agency (AFOR) .
The study confirmed the high demand for land certification from smallholders (including technical and financial), and gathered interest from financial institutions to develop and pilot financial products for this end.
Land ownership and certification are critical for the agricultural sector in Côte d’Ivoire, particularly for cocoa smallholders who form the backbone of the country’s economy. However, fewer than 10% of rural lands are registered, making the need for streamlined and accessible land certification even more pressing.
Key takeaways:
• 98% of cocoa smallholders do not possess a land certificate (which is a recognition of land usage rights but does not provide full legal ownership) or a land title (document granting legal ownership). Smallholdres expressed an interest in obtaining loans to finance the acquisition of land certificates and preference for their affiliated cooperatives to play a role in this certification journey.
• All financial institutions concur that land certificate serves as a legally recognized document of security and 67% of these institutions would be inclined to increase their investments in the agricultural sector if smallholder farmers had land certificates in their possession.
• An efficient financing strategy for land certification consists of a combination of smallholders own savings and through loans either from cooperatives, ECOOKIM, or financial institutions.
• Risks of the land certification business case: economic hurdles, limited finance literacy, land rights issues, and stakeholder’s misalignment. Solution: effective planning, clear communication and vigilant monitoring.• Cooperatives believe that a repayment mechanism based on sales proceeds would help mitigate risks associated with such an initiative.
• Collaboration is key: The study revealed that a model focusing on the choices made by smallholder cocoa farmers, cooperatives and funding partners would be ideal.
Land-related conflict are recognized as major challenges in rural areas by the smallholder farmers consulted. 65% of them estimate that one in every two conflicts is rooted in land issues within the primary production zones.
Recommendations:
- Raise awareness: Initiate campaigns and educational programs to ensure farmers understand the value and steps of land certification.
- Promote financial literacy: Due to many farmers’ lack of familiarity with the banking system, organize workshops that teach the fundamentals of financial management and understanding of credit.
- Offer diverse financing solutions: Cater to the varied financial needs of farmers by presenting a range of financing options, from self-financing to cooperative-assisted loans.
- Implement regular monitoring: Develop a strong system to oversee the progress of land certification, address challenges in real-time and gather feedback for ongoing improvement.
- Simplify land rights procedures: Streamline the land rights process by setting up specialist teams to collaborate with local authorities, ensuring a smooth and transparent journey that upholds farmers’ rights.
- Plan for expansion: After evaluating the pilot’s outcomes, contemplate extending its reach to serve a broader segment of farmers throughout Côte d’Ivoire.
Land certification will positively impact sustainable cocoa farming in producing regions, secure agroforestry implementation and has the potential to improve the financial situation of farmers.
Empowering cocoa smallholders in Côte d’Ivoire with clear pathways to land certification can lay the groundwork for their economic growth, offering them stability and collateral for improved access to financial opportunities.
The study clearly identifies the demand from farmers to access financing and a keen interest from Financial Institutions to develop financial products to cater into that demand. Furthermore, on the basis of surveyed institutions and Ecookim, it puts forward a design of a pilot project in the Goh and Tonkpi regions. This pilot is poised to be a significant step in moving the needle on making land certification accessible and affordable, with the potential for broader implementation across smallholders in Cote d'Ivoire in the future.
We therefore call on like-minded partners to support with Technical Assistance for pilot implementation and impact financiers to avail capital and de-risking mechanisms to further land certification objectives.
Interested to learn more?
Join our webinar on Thursday 28 November at 14:00 on this link.
Land certification will positively impact sustainable cocoa farming in producing regions, secure agroforestry implementation and has the potential to improve the financial situation of farmers.
