The 2020 Cocoa Barometer report has made a strong case for government pay a fair price to cocoa farmers, stressing that the single biggest positive impact for farmers and incentive for farming sustainably is delivering a fair price for the cocoa they produce.
President Nana Akufo-Addo last month announced a 28 percent increase in the producer price of cocoa per bag for the 2020/21 crop year. The new price took effect from October 1.
The Cocoa Barometer report also urged cocoa and chocolate companies to find ways to redistribute value along the supply chain so that farmers are guaranteed a living income.
Sandra Sarkwah, Coordinator for the Ghana Civil-Society Cocoa Platform (GCCP), was quoted in the report as saying: “Efforts of sector players to change the story of farmers keep on beating about the bush when evidence presents to us the plight of farmers—that is, low income from their hard work—is a major threat to cocoa sustainability.”
She said processors, chocolate manufacturing companies and retailers who earn a large chunk from the value chain must be fair to farmers by paying a living income, and this must reach the farmer.
“This will require the efforts of various actors, including civil society organisations in both producing and consuming countries, as well as strong farmer cooperatives to demand transparency and accountability for effective delivery of pricing policies for better farm gate prices for farmers,” she added.
The report calls for systems change and regulation that creates an enabling environment.
It said current forms of certification and farm-based standards increase pressure on farmers, adding: “We need laws that hold the powerful accountable, rather than systems that demand farmers to solve systemic issues. Compliance criteria are imbalanced and need restructuring so that companies are held accountable to due diligence systems.”
It also called for an effective partnership between producer and consumer countries.
“We need partnership agreements between producer and consumer countries that facilitate and finance system change, ensuring the right policies are in place. Processes that set partnerships in motion should be inclusive and deliberative, ensuring that civil society and farmer groups have a respected voice at decision-making tables.”
With Ghana and Côte d’Ivoire responsible for 65 percent of the raw cocoa beans used in making chocolates, industry players have expressed worry over the fact that cocoa farmers from the two countries earn just US$6bn from an over US$100bn chocolate industry.
However, Ghana and Côte d’Ivoire are receiving a Living Income Differential (LID) of US$400 per ton of cocoa, which is an additional earning from the world market price for both countries’ farmers.
The LID is expected to guarantee some stability to the producer price of cocoa and sustainability of the industry in the two countries.