Major $10 billion income gap for Ghana and Ivory Coast farmers remains a critical sector goal

Delivering on cocoa supply chain sustainability remains the most single pressing task for major players within the confectionery industry, with an especially notable milestone having just been put down.

This came in the form of Mondelez International’s latest sector report, titled No Silver Bullet, which unveiled the staggering statistic that the income gap for farmers working in Ghana and Ivory Coast stands at $10 billion, that would enable 75% of workers to attain a living wage above UN defined poverty levels.

It’s a huge figure by anyone’s standards, but without knowing the precise scale of the problem, then industry, in tandem with governments and other civil society groups will have no full understanding of how to best redress the issue. So Mondelez should indeed be commended for at least presenting the case for precisely what needs to be done – and as the title of its study indicates, cross-industry support is the only logical way to address wider systemic issues.

A strong starting point has been seen with the introduction of the Living Income Differential payment in Ghana and Ivory Coast, Africa, which adds a premium of $400 per tonne of cocoa that is intended to go directly to farmers, though this alone won’t solve the situation as many industry observers have noted.

The viability of this scheme also very much hinges on all major players engaging with it to ensure it is a success – which came under the spotlight as it emerged Hershey had unusually bought some of its cocoa supplies via the New York Futures trading market rather than directly from West Africa, though the company has stressed that its 20/2021 season cocoa purchases have in fact been through the LID system.

Clearly, the challenge of cocoa sustainability has been a major concern for many across the sector, which has for the past two decades been grappling with how to help lift millions of farmers out of poverty through a mixture of community support schemes and individual company initiatives.

Significantly, broader partnership working such as the recently agreed Cocoa and Forests Initiative drawing all the key commercial actors together with government has been seen as the way forward. This was further underlined by research from Fairtrade that highlighted the fact there there was significant overlap with individual company sustainability initiatives.

As last week’s World Cocoa Foundation partnership meeting brought home, this is a hugely complex issue spanning core issues of the urgent need to raise farmer pay, tackle major matters of deforestation and child labour in the supply chain, as well as creating educational and wider community opportunities that only through combined action will result in long-term change for the better.

The key theme for WCF’s virtual event was how to scale up the response to this issue and it offered plenty of food for thought on how that might happen – including strong references to the NORC at the University of Chicago’s study into the extent of child labour (which found 1.56 million youngsters were still affected by the issue), which again signifies the sheer scale of the problem that lies before the industry – which some fear may not be around for a great length of time unless the promising work on building sustainability is seen through to fruition.

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