Big Chocolate maker backs new cocoa pricing mechanism

THE international cocoa trade cannot be fundamentally changed for the better until cocoa communities in producer countries are lifted out of poverty, and this can only be achieved by ensuring that smallholder farmers receive a higher and fair price for their product, says John Ament, the Global Vice-President of Cocoa for Mars Incorporated, US-based maker of M&M’s, Snickers and Twix.

“After all,” he added, “poverty is one of the main root causes of hazardous child labour. If smallholder farmers can’t afford to hire skilled employees, then it’s more likely children will end up working on the farm. Ensuring that farmers receive a fair and decent income will empower local economic and social development – and will raise standards across the cocoa-growing communities.”

John Ament made this call in his speech at the on-going World Cocoa Partnership Meeting organised by the World Cocoa Foundation (WCF) in Berlin, Germany yesterday.

He asked fellow members of the WCF to support the implementation of the Living Income Differential (LID) by Ghana and Cote d’Ivoire as a means to ease poverty among cocoa farmers in the two countries.

Chocolate makers, suppliers and processors who are concerned about sustainability must come to the realization that the implementation of the Living Income Differential (LID) is crucial for the attainment of sustainability goals.

The Living Income Differential (LID) is a $400 per tonne amount which applies to all categories of cocoa beans from Ghana and Cote d’Ivoire starting from the 2020/2021 crop season, in a bid to ease farmer poverty and improve their livelihoods.

Sources from within the government say about 100,000 tonnes of Ghana’s cocoa have already being sold in the ongoing forward sale for the 2020/2021 crop season, bringing the country and extra $40million in revenue.

John Ament stated that, although there are a number of approaches that can be used to tackle farmer poverty, such as, improving yield per unit farm area; the cost of farming, and other sources of income beyond cocoa; among others, the most critical, is “the price farmers are paid for their cocoa”.

He said Mars Inc.’s motive for supporting the implementation of the LID and its push for other industry players to do same, lies in the company’s belief that at the heart of their business should be mutual benefits for all stakeholders and that everyone in the supply chain should have the opportunity to thrive.

“We continue to support these government interventions to increase farmer income and we are absolutely committed to both buy our cocoa with the Living Income Differential (LID) and to invest in our sustainability projects, as raising farm gate prices is critical,” he assured.

“Enabled by a robust and transparent process that ensures the additional income reaches each farmer and by measures that limit further expansion of land use for cocoa farming, the Living Income Differential (LID) can be a key approach to addressing the income challenge.”

“Mars supports the Living Income Differential, is committed to it, and calls on other WCF member companies to join us and do the same.”

After engagement with industry players in the cocoa value Chain on the continuous implementation of sustainability programmes Le Conseil du Café Cacao representing Côte d’Ivoire and Ghana Cocoa Board issued a communiqué.
In the communiqué the two countries and industry agreed that without an improved cocoa income there cannot be a sustainable cocoa industry.

The industry clearly indicated that it is implementing the LID introduced in July for the 2020-21 season as part of the mutual objective to raise farmer income and are therefore taking the necessary actions towards its full and immediate implementation.

The communiqué signed by Joseph Boahen Aidoo, Chief Executive of Ghana Cocoa Board and Kone Brahima Yves, Directeur General of Le Conseil Du Cafe-Cacao, said “We hereby reaffirm our position that LID and sustainability programmes can operate together as the two complement each other in ensuring the sustainability of the industry and the achievement of the Sustainable Development Goals (SDGs).

“We therefore announce that the LID and the sustainability programmes would co-exist and complement each other.

“The implementation of sustainability and certification programmes shall therefore continue in Ghana and Côte d’Ivoire,” it added.

The two countries pledged to monitor and evaluate the complementary co-existence of the LID and sustainability programmes being implemented in their respective countries to decide on them, going forward.

Ghana and Côte d’Ivoire reaffirm their commitment to eradicating Child Labour and deforestation in cocoa and will collaborate with all stakeholders to promote and sustain the cocoa industry.