The Basics of Kuapa Kokoo

The Kuapa Kokoo Farmers Union (KKFU) is a cooperative organization for cocoa farmers in Ghana. Its origin lies in the liberalization of the internal cocoa trade implemented by the government of Ghana in the early 1990s. Its founder, Nana Frimpong Abebrese, had represented cocoa farmers at the Cocoa Marketing Board of Ghana and he worried about the impact of liberalization on cocoa farmers throughout the country.

A little background is in order here. In colonial times, marketing boards were used by European powers to tax African farmers. Generally, marketing boards required that all products, in this case cocoa, be sold to them for export. By paying the farmer less than the world market price, the colonial administration was able to extract revenue from farmers. Upon independence, the new governments in general adopted the same methods to collect revenue from a population mostly employed outside formal wage labor.

It takes little imagination to realize that this process has a great potential for abuse ranging from the very top (setting very low prices to increase revenue) to the bottom ( false scales so that government agents could cheat farmers to line their own pockets). Liberalization of the cocoa trade was one of the projects of the IMF in all of West Africa. As with so many IMF projects, the unshakable belief in the power of the market guided the programs. In principle, competition was to guarantee a better price for farmers. But often there was little competition in remote places. As the story goes, a farmer was offered a price by a commercial buyer. When the farmer complained that the radio had announced a higher price for the crop, the buyer replied: “Then sell your crop to the radio.” This was the fear that motivated Nana Frimpong Abebrese.

Implementation of liberalization programs varied from country to country. In Ghana, the government created the Ghana Cocoa Board, which continued to set the farm gate price for farmers and remained the sole exporter of cocoa. However, the purchasing of cocoa from farmers and its transport to the ports was now opened up to private firms that had to be licensed by the Board.

This is where Kuapa Kokoo comes into play. In its first iteration, Kuapa Kokoo Limited (KKL), it was a licensed cocoa buyer owned by the cocoa farmers from which it bought. Initial funding came from Twin Trading Limited, a British fair trade organization. KKl began with 22 village societies in four regions of the country. Since then, the number of village societies has increased to 1,500 representing about 45,000 farmers.

As it grew in size, Kuapa Kokoo also grew into a much more complex organization. At the top is the KKFU which is controlled by its members through the annual general meeting and which is run by a national executive committee. KKL is the commercial subsidiary that handles the buying from the village societies, the storing of cocoa in its district depots and the transport of cocoa from the farmers to the district depots and the ports. The Kuapa Kokoo Farmers Trust (KKFT) is a foundation that disburses the fair trade premium to member societies in the form of community projects ranging from water wells and pumps to school buildings. KKFU also owns 45% of the Day Chocolate Company in London, England which sells fair trade chocolate made from the beans grown by Kuapa Kokoo farmers.  The most recent addition to the organization is the Kuapa Kokoo Credit Union (KKCU) which allows members to save and borrow money without having to face the vagaries of commercial banks or private money lenders.

By the way, Kuapa Kokoo means “good cocoa farmers company” in Twi, the local language.