A deal to tackle farmer poverty was achieved last Friday, and as part of it, major cocoa purchasers have agreed to pay a premium and support a price floor on cocoa exported by Ghana and Côte d’Ivoire.
Players in the cocoa business will support a fixed “living income difference” (LID) of $400 per tonne on all cocoa contracts offered by Ghana or Côte d’Ivoire, two of the world’s largest cocoa producers.
Additionally, buyers would pay a country premium to help regulators in both countries reach a goal floor price for cocoa of $2,600 per tonne, which should enable farmers to profit by at least 70% of the target floor price.
Hershey (HSY.N), Mars, Blommer Chocolate, Nestle (NESN.S), Sucden, Mondelez (MDLZ.O), Touton, Barry Callebaut (BARN.S), Cargill, Ferrero, Olam are some of the signatories and Ecom Trad
Both countries have struggled to achieve that price target, prompting the Cote d’Ivoire-Ghana Cocoa Initiative (CIGCI) to work with the industry on a price mechanism.
“Companies in the cocoa value chain have met with the governments of Cote d’Ivoire and Ghana to renew support for the LID as a starting point towards the pathway to achieving living incomes for farmers,” the CIGCI and both countries’ cocoa regulators said in a joint statement.
Touton Chief Executive Patrick De Boussac said the company was trying to improve pay for farmers.
“What we have signed for today is a better remuneration for planters,” De Boussac said.
Yves BrahimaKone, chief executive of the Ivory Coast Cocoa and Coffee Council, said companies had been dragging their feet on LID commitments, hindering efforts to make the industry more sustainable.
“The aim of the pact is to allow all actors in the cocoa value chain to play their role and respect their engagements,” he said.
Picture: Harvested cocoa
