Potential for Upgrading in Financialised Agri-Food Chains: The Case of Ghanaian Cocoa

van Huellen, Sophie; Abubakar, Fuad Mohammed

Abstract

We revisit functional upgrading opportunities for developing and emerging market companies in the context of highly financialised food systems. We argue that the assessment of upgrading potential within the global value chain literature lacks consideration of constraints posed by financialisation, not only of the sector within which upgrading takes place but also by the global financial architecture more broadly. For the Ghanaian cocoa–chocolate sector, we show that financialisation acts as limiting factor to upgrading, with contradicting tendencies. First, financialisation of lead firms, eager to outsource non-core activities, has promoted cocoa processing in Ghana, but the resulting consolidation of power hinders further functional upgrading. Second, Ghana’s dependency on cocoa for foreign exchange earnings necessitates upgrading into higher value-added segments, while also undermining feasible upgrading strategies that build on domestic or regional markets first. These contradicting tendencies constitute a middle value-added trap, which is difficult but not impossible to overcome.

Citation

van Huellen, S., & Abubakar, F. M. (in press). Potential for Upgrading in Financialised Agri-Food Chains: The Case of Ghanaian Cocoa. The European Journal of Development Research, 33(2), 227-252. https://doi.org/10.1057/s41287-020-00351-3

• Journal Article Type: Article
• Acceptance Date: Nov 15, 2020
• Online Publication Date: Feb 4, 2021
• Deposit Date: Dec 11, 2020
• Publicly Available Date: Mar 17, 2021
• Print ISSN: 0957-8811
• Electronic ISSN: 1743-9728
• Publisher: Palgrave Macmillan
• Peer Reviewed: Peer Reviewed
• Volume: 33
• Issue: 2
• Pages: 227-252
• DOI: https://doi.org/10.1057/s41287-020-00351-3