Cocoa deals help African farmers, but not enough to ease poverty
ABIDJAN: The willingness of some multinational firms to pay a cost-of-living bonus for African cocoa planters is welcome but will not save many farmers from grinding poverty, industry sources say. Ivory Coast and Ghana, which together account for more than 60 percent of global cocoa production, initiated deals with chocolate makers in July, adding a “living income differential” (LID) to prices.
Barry Callebaut and Nestle, two world leaders in cocoa products, confirmed that they would pay a supplement of $400 (almost 360 euros) per ton above the market price to help farmers, in the wake of announcements during an October meeting of the World Cocoa Foundation in Berlin. The neighboring
West African countries in June said they would set the minimum price per ton at $2,600 (2,330 euros) for the 2020/2021 season. Nestle “have already started buying 2020/2021 cocoa with the living income differential”, declared the world’s largest food and beverage company in a statement.
“The LID will help improve farmers’ living income and complement all our efforts to improving the lives of farmers,” it said. Barry Callebaut, another firm with headquarters in Switzerland, declared that it agrees with the principle enabling the Ivorian and Ghanaian governments to back a minimum cocoa price to cocoa farmers.
‘Historic!’
The firm stressed that the LID should be “executed in a way which contributes to sustainability and structurally improves farmer livelihoods, without inducing further expansion of cocoa production into forests.” “This is historic! The two countries together have managed to convince private buyers to raise the purchase price so that producers can earn more,” Michel Arrion, executive director of the International Cocoa Organization (ICO), said.
Ivory Coast, with 40 percent of world production, and Ghana, with 20 percent, pressed hard for a deal that would benefit cocoa planters, who receive only six percent of a global market for cocoa and chocolate valued at $100 billion per year. The purchase price of cocoa to Ivorian farmers was set at 825 CFA francs (1.25 euros) per kilogram at October’s opening of the new cocoa year, a raise of 10 percent, according to the Coffee Cocoa Council (CCC). Experts in Ivory Coast say that cocoa prices are still too low, even with the LID, since more than half of the million people working in the sector live below the poverty line, earning less than $1.2 per day according to the World Bank. — AFP