A research consortium led by 100WEEKS has taken an in-depth look at the long-term effect of cash transfers on smallholder farmers in the cocoa supply chain. The results are promising.
Poverty is an endemic problem in international agricultural supply chains. Millions of farmers that support the global trade in sugar, cocoa or palm earn less than a living income.
This so-called ‘income gap’ has proven to be a stubborn problem. In 2022, 100WEEKS joined forces with Unilever, Cargill, the Sustainable Trade Initiative (IDH) and the Royal Tropical Institute (KIT) to create Cash Lab. The question we sought to answer: can a temporary infusion of cash lift smallholder families out of poverty?
Money well spent: incomes rose and health improved
The Cash Lab’s first research project was executed in the summer of 2022. This study looked at 185 people receiving cash transfers and compared them to 188 who didn’t. All were drawn from cocoa communities in the Indénié-Djuablin region of Côte D’Ivoire.
The results were promising. An $800 gift, spread out over two years, proved sufficient to improve the recipients’ health, diet and income. Annual incomes rose by more than $500 (not including the cash transfers themselves), mainly because recipients invested their cash in income-generating activities. This means that for every dollar spent, more than an additional dollar in income is generated.
We published a full overview of the study online today.
