A Licensed Buying Company in Ghana’s Cocoa Industry

This case study examines a private Licensed Buying Company (LBC) in Ghana's cocoa industry to assess its compliance with the Committee on World Food Security’s Principles for Responsible Investment in Agriculture and Food Systems (CFS-RAI). The company operates as a trader and distributor, purchasing cocoa from approximately 20,000 farmers via 2,000 purchasing clerks and selling to the state-run Cocoa Board of Ghana (COCOBOD). While the company demonstrates high compliance in inclusive structures and stakeholder treatment, it shows significant gaps in formal strategy, human resource systematization, and environmental impact management.

• The company's overall compliance with the CFS-RAI is deemed acceptable, but it exhibits a high variance across different business dimensions. It scores very highly in inclusive and transparent structures and the responsible treatment of stakeholders, but scores low in strategy and accountability and responsible human resource development.
• The company lacks a formalised strategy for responsible business conduct and does not systematically assess or manage its impacts on the environment and communities. Most positive actions taken on the ground are ad hoc rather than strategic.
• The company demonstrates strong inclusive governance and communication with stakeholders, including farmers and local chiefs, which allows it to resolve grievances effectively. However, the grievance resolution system remains loose and lacks formalisation.
• The company contributes to food security and nutrition through the promotion of alternative livelihood strategies, such as snail and grasscutter production, and the introduction of complementary crops like hibiscus, sugarcane, and plantain.
• Environmental compliance is relatively low, particularly regarding the implementation of sustainable practices. While the company manages its own operational environmental risks and employs a sustainability manager, it pays little attention to broader issues like the climate crisis, soil health, and biodiversity.
• The company actively supports the formalisation of land tenure rights for farmers through partners, including land titling projects and the registration of lessee and landowner details to prevent land grabbing by local authorities.
• Human resource development is characterized by a lack of systematised procedures. While the company maintains an 'open-door' management style and complies with Ghanaian law, it lacks formal policies on anti-corruption, non-discrimination, and structured staff training.
• The company faces severe operational challenges, including high competition from multinational enterprises (MNEs), high certification costs, and difficulty accessing affordable working capital. Farmers often face interest rates as high as 100% over six months from private lenders.
• Financial transparency is high regarding the company's internal structure, but benefit sharing with local communities is low and sporadic due to financial constraints. Examples of community support include funding a school classroom and five boreholes.

APA

International Institute for Sustainable Development (n.d.). A Licensed Buying Company in Ghana’s Cocoa Industry. https://www.iisd.org/system/files/2024-08/responsible-agricultural-investment-ghana-cocoa.pdf

Chicago

International Institute for Sustainable Development. A Licensed Buying Company in Ghana’s Cocoa Industry. n.d. https://www.iisd.org/system/files/2024-08/responsible-agricultural-investment-ghana-cocoa.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=A Licensed Buying Company in Ghana’s Cocoa Industry |url=https://www.iisd.org/system/files/2024-08/responsible-agricultural-investment-ghana-cocoa.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopmentndlicensed, author = {{International Institute for Sustainable Development}}, title = {{A Licensed Buying Company in Ghana’s Cocoa Industry}}, institution = {International Institute for Sustainable Development}, url = {https://www.iisd.org/system/files/2024-08/responsible-agricultural-investment-ghana-cocoa.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }