The removal of territorial boundaries between countries has fostered access for countries to interconnect in the global trade. The world economic system has changed to accommodate for countries’ amalgamation into the global market. One of the economic tools propelling global trade is the Global Value Chain (GVC). Boudreau et al. (2023) defined the Global Value Chain as the process of allocating products or services to different regions globally. Global value chains enable countries to produce finished products on a global scale by involving multiple countries in the production process, from manufacturing to marketing. GVCs identify that each country possesses varying comparative advantages, such as superior technology, labour, raw materials, knowledge and copyright. Through the complementarity of these advantages, high-quality products can be created at a price that is achievable by any country. This widespread practice focuses on profit and involves the movement and management of raw materials towards finished goods. Global Value Chains (GVCs) relate not only to international relations between nations but also to facilitating a country’s internal connectivity with the global markets. This is made possible through the provision of convenient access to transportation, communication, trade, and the collaboration between various stakeholders, particularly governmental actors, society, and the market.

The Solomon Islands has integrated into global value chains through the production of cocoa. In 2008, the country initiated the Solomon Islands Rural Development Project (SIRDP), a government programme with support from the World Bank, Australian Aid, the European Union, and the International Fund for Agricultural Development (IFAD). The SIRDP aims to enhance the accessibility of infrastructure, agricultural services, rural business development and  financial access for rural households. The program is specifically executed  across 8 provinces, namely Choiseul, Western, Isabel, Central, Guadalcanal, Malaita, Makira, and Temotu. In 2015, the programme concluded, but Salomon has since focused on developing the agricultural sector, which  holds significant  economic value  in both  domestic and  global markets, particularly with regards to cocoa and coconut products (Sturchler, 2019).

Solomon’s dedication to agricultural expansion is highlighted in the Salomon Islands National Development Strategy (NDS) 2011-2020. The NDS prioritises the advancement of economic growth, income equality, and employment opportunities. This includes establishing a supportive environment  for  privately-led  expansion and  encouraging  the cultivation of profitable export crops, like cocoa. Cocoa plays a significant role in the economy of the Solomon Islands by providing employment and generating national export income. According to Vadnjal and Moses (2014), there are approximately 24,000 smallholder farmers in the Solomon Islands, and around 133,000 or 26% of family members are engaged in cocoa production. The cocoa farmers are distributed across various regions, including Guadalcanal, Malaita, Makira, Western and Choiseul.

Based on the previous explanation, GVC practices can be effective if there are stakeholders who support integration between the government, community and market. To increase commercial cocoa exports, the Solomon Islands employs two strategies: seeking development partners and establishing global value chains that link farmers and markets. The initial objective of the developmental partners is to support Salomon’s transportation infrastructure, road facilities and production companies. Salomon collaborated with Australia and China for this purpose. While Australia concentrated on financing the cocoa industry, China provided infrastructure support. China’s developmental priority is focused in the surrounding regions of the industry, covering the construction of various infrastructure components, such as bridges, roads, electricity, telecommunications and docks. Additionally, it should be noted that Mondelez International is another company supporting this initiative. As a globally recognised brand, Mondelez International places emphasis on creating partnerships that are mutually beneficial with producers, governmental and non-governmental organizations, traders and buyers. Mondelez International’s commitment to the cocoa industry has resulted in the creation of the “Cocoa Life” programme, which is dedicated to building partnerships that focus on farmers and communities.

Regarding the second strategy, the Solomon administration has established a fortified global cocoa value chain  that  operates through the export  market  channel.  This section comprises four functional components: inputs, producers (smallholders), processors, and exporters, all interconnected within said export channel. Inputs include wholesale and retail outlets dispersed throughout provinces with cocoa potential. Smallholder farmers, including those with cocoa plantations, are typically situated in the provinces of Guadalcanal, Makira, and Malaita. Other farmers with medium-sized holdings typically have cocoa plantations comprising 3,000 to 10,000 trees (Vadnjal & Moses, 2014). In accordance with standard cocoa bean fermentation and drying laws, processors ferment and dry cocoa beans using wood- burning stoves. Exporters purchase and export dried cocoa beans, either from traders or directly from farmers or processors. They then sort and pack the beans for sale to international brokers and manufacturers. Several licensed exporters, appointed by the government, inspect cocoa shipments for quality and issue export certificates.

Both strategies are crucial factors in advancing Salomon’s global value chain. Infrastructure development and a transparent global value chain yield significant benefits for Salomon. This includes enhancing integrated community access to the global market and more efficient management of the cocoa industry, which has a positive impact on the welfare of the community,  particularly cocoa farmers.  In 2020, the cocoa industry in Solomon Islands contributed SBD 90 million to the national economy. In 2021, the Cocoa Production Shares by Province data showed the cocoa yields from each province. Guadalkanal had the highest production at 61.20%, followed by Makira at 23.47%, Malaita at 13.90%, West at 0.40%, Cent at 0.40%, Temotu at 0.38%, Isabel at 0.21%, and Choiseul at 0.02% (CEMA, 2021).

However, there are undeniable challenges in implementing each component. As a retailer or wholesaler, the primary obstacle is to maintain large quantities of cocoa beans, which must remain sterilised and disease-free. Accomplishing this crucial step requires chemical processes and the acquisition of appropriate knowledge. Smallholders face the challenge of increasing cocoa tree productivity to meet growing demand amidst the undeniable impact of diseases and climate change, which threaten cocoa productivity. The major obstacle confronting processors is the inadequate management of cocoa beans. Salomon must improve management productivity in terms of production tools, licenses, and product quality to compete with other countries. Exporters, who provide services to both managers and farmers, face significant  challenges concerning  production  levels and  product  quality.  As an exporter, fulfilling market demands with their own specifications and requirements is essential.

From the given information, it can be inferred that cocoa is a lucrative commodity that greatly aids in the growth of the economy. To further enhance the potential of this commodity, Solomon employs GVC practices that are put into effect via two methods, namely, building partnerships for development and creating global value chain systems ranging from inputs, smallholders, processors to exporters. Whilst Solomon Islands still face a number of challenges, the country has successfully integrated into the global market, which marks a positive initial step. As a result of Global Value Chain (GVC) practices, there has been an increase in national income since 2020. Notably, the Guadalcanal, Makira and Malaita regions are responsible for the largest cocoa production in their respective areas, which has led to the creation of more employment opportunities.