As Fairtrade kicks-off its annual fortnight of awareness raising of its global activities, the organisation has just implemented its latest prices, including its established cocoa farmer premiums designed to assist incomes, reports Neill Barston.

Notably, as our title has continued to report, Ghana and Ivory Coast, which make up two thirds of the sector’s crop supplies to the confectionery and chocolate industries, continue to face crisis conditions in West Africa, amid cuts to farmgate prices, ongoing adverse weather conditions, and also yields impacted by diseases including swollen shoot virus.

Despite such major challenges, governments in the region have pledged to support farmers – though the significant reduction in pay amounting to around 30 % cuts in Ghana and reportedly by around 60% in Ivory Coast. This effectively wiped out any gains made by the previous season – with no confirmation as to whether authorities would honour the original contract prices agreed at earlier at higher rates.

The topic of farmer pay was among core subjects for our Q&A panel at this year’s World Confectionery Conference, with Fairtrade being represented once again by Jason Archie-Acheampong. He noted that the issue of payment of farmers had been far from new, and must remain in the spotlight to ensure that tangible action is taken, including the delivery of premium payments.

Furthermore, he also noted that emerging technology, including AI-based systems for monitoring crops, or for payment, held particular potential, but asserted that the costs of implementing such initiatives should not be placed upon those poverty-hit farmers. (watch our event review below).

As research has shown, many workers in the sector in West Africa have continued to be burdened by cocoa farming pay that equates to less than $1 a day, well below World Bank definitions of poverty.

For its part, Fairtrade noted that its new Fairtrade Minimum Price is higher than the recently announced government export price. In these situations, Fairtrade calculates the difference between the two prices, known as the “Fairtrade Minimum Price differential.” This differential must be paid on top of the government’s price.

As the social justice movement revealed, the differential for the new harvest season, which runs from September 2026 through February 2027, is €349.39 per metric tonne, and comes on top of the government price equivalent of €2,850.61 at FOB level. Fairtrade Standards require cooperatives to pay 100 percent of the differential in cash to their farmer members.

In addition, the organisation’s sales include payment of the Fairtrade Premium, which in Côte d’Ivoire is now €250 per tonne. New rules also require cooperatives to pay 40 percent of Premium funds directly to farmers to support improved incomes, and another minimum 10 percent each on cooperative operations, farm services, and community projects, as chosen democratically by the cooperative.

As the global movement observed, price safety net plays an important role to buffer price volatility and provide some income stability, which cocoa farmers have needed in recent years.

Global cocoa prices rose dramatically in 2024, and just 20 months ago reached $12,000 per tonne. They plunged below $3,000 per tonne in February this year, and have climbed back to around $6,000 per tonne in September. (Fairtrade sets cocoa prices for Côte d’Ivoire in euros to reduce the effect of exchange rate fluctuations between US dollars and the local currency.)

This volatility is extremely challenging for the cocoa sector, especially for farmers who typically have little financial cushion.

Fairtrade went on to assert that while high global market prices may seem like a benefit for farmers, the reason behind them was poor harvests in West Africa – which produces two-thirds of the world’s cocoa – attributed to effects of climate change. 

Significantly, as Fairtrade observed, this meant that any gains from higher prices were limited by low yields plus higher production costs. In the coming season, El Niño may result in further production challenges in many cocoa-producing countries, with knock-on effect on global prices.

Without resources to invest in farm renovation and diversification – such as replacing aging cocoa trees and setting up other farm or non-farm businesses – farmers struggle to build resilient livelihoods that can survive difficult cocoa seasons.

A Fairtrade study published last year found that higher cocoa prices have direct positive effects on farmers’ incomes. This is why the Fairtrade Minimum Price is so important, especially in times of price volatility where it provides a safety net during price drops, but farmers earn market prices when these are higher.

Moreover, as the  Fairtrade Minimum Price helps in managing yield, ensuring access to bonuses, and providing support for small expenses. In the study, farmers also reported that the Fairtrade Premium – the amount earned on top of the selling price for each Fairtrade sale – “contributed significantly to income stability by supporting community-level infrastructure improvements and improving access of households to better education, housing, and healthcare.” The Premium can also be used to fund cooperatives’ investments in meeting market regulatory demands, such as the geolocation data collection that is part of the upcoming EU Deforestation Regulation.