Protecting cocoa farmers and building resilience across the cocoa supply chain
BY BLUE MARBLE MICRO
REGION
Asia
INDUSTRY
Agriculture
PARTNERS
Agribusiness
CATEGORY
Modeling
SERVICE
Insurance
RISK
Drought and excess rainfall
STRUCTURE
Micro
IMPACT
Climate resilience and adaptation, Income stability
Challenge
Cocoa farmers globally are increasingly vulnerable to the effects of climate change, which threaten both crop yields and long-term livelihoods. For example, rising temperatures accelerate pest infestations and fungal diseases and erratic rainfall patterns lead to prolonged droughts and flooding which can damage trees and reduce bean quality. For smallholder farmers who depend heavily on cocoa as their main source of income, these shocks can result in lost harvests, declining quality premiums, and reduced access to global markets. Without reliable safety nets or access to adaptation finance, climate risks jeopardize not only household stability but also the broader sustainability of cocoa supply chains in Asia.
Solution
To address these risks, Blue Marble in collaboration with a cocoa multinational has implemented a parametric insurance product tailored to the realities of cocoa farming. Designed in close alignment with the crop cycle, the coverage protects farmers against the dual threats of drought and excess rainfall during the critical flowering and pod development phases, as well as excess rainfall during harvest. In order to customize the product to different regions and seasons, two models were created. By providing timely financial relief when weather thresholds are exceeded, this insurance allows farmers to safeguard their income, reinvest in their farms, and strengthen resilience to climate shocks that would otherwise undermine both livelihoods and the broader cocoa supply chain.
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