Top cocoa producers Ivory Coast and Ghana said on Wednesday that chocolate makers would continue for now to be allowed to run sustainability schemes in their countries, linking them to the success of a programme to ease pervasive farmer poverty.
The future of the schemes had appeared to be in jeopardy when the two nations said earlier this month they would be re-examined as chocolate makers had been slow to pay a living income differential (LID) for bean purchases.
In a bid to ease pervasive farmer poverty, the West African neighbours, which together produce more than 60% of the world's cocoa, introduced the $400 LID in July on all cocoa sales for the 2020/21 season.
The Way Forward
A joint statement by the Ivory Coast's Coffee and Cocoa Council (CCC) and Ghana Cocoa Board (Cocobod) said that while the LID and the sustainability programmes could co-exist and complement each other, they would monitor how programmes were being implemented "to decide on them going forward".
Under pressure from western consumers for ethically sourced products, chocolate makers like Mars Wrigley, Mondelēz, Barry Callebaut, Hershey's and Nestlé have spent millions in recent years on sustainability schemes.
"Our approach is to ensure that the farmer gets remunerative income. LID is not in competition with sustainability . Our position is, if sustainability can thrive, it requires improved farmer income," said Cocobod spokesman Stephen Fiifi Boafo.
The schemes, which certify cocoa ingredients as ethically sourced, are key to chocolate makers' branding. They have had little success however in tackling widespread child labour and deforestation in West Africa's cocoa sector.
'Reaffirm Our Commitment'
"We reaffirm our commitment to eradicating child labour and deforestation in cocoa and will collaborate with all stakeholders to promote and sustain the cocoa industry," the joint statement said.
Ivory Coast and Ghana plan to use funds raised from the living income differential to guarantee farmers get 70% of a $2,600 a tonne free-on-board target price.
If global prices rise above $2,900, proceeds from the LID will be placed in a stabilisation fund that would be used to ensure farmers get the target price when market prices fall.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
