CIGCI cocoa initiative moves towards key farmer payment recommendations

The Ivory Coast-Ghana Cocoa Initiative’s (CIGCI) Technical Working Group on Price and Markets has agreed a strategy towards delivering a more sustainable long-term pricing mechanism for the sector’s agricultural workers in the region, writes Neill Barston.

Notably, the government-backed organisation, which is made up of experts from member countries, as well as civil society, and the cocoa exchange, met in Accra, Ghana, recently, having met virtually since last year.

It is set to deliver its recommendations at the end of next month, against a challenging backdrop of comparatively low cocoa prices, cost of living crisis, and the sector seeking to recover from the worst of the pandemic.

As has previously been reported, many cocoa farmers within the region are earning less than $1 a day, below UN poverty levels, and have faced tests amid rising inflation that has impacted on key fertiliser costs.

The working body is one of four technical working groups set up under the auspices of the CIGCI. The others include Traceability and Standards, Accountability and Monitoring, as well as the Cost of Sustainable Cocoa.

The recommendations from the four working groups will form the framework of an Economic Pact that was agreed to in principle through the signing of a joint statement of intent by industry in July 2022.

“The idea of an Economic Pact, gathering public and private actors to deliver a fully sustainable cocoa price emerged after widespread consultations with stakeholders over the last two years, to strengthen the Living Income Differential,” said CIGCI Executive Secretary Alex Assanvo.

The implementation of the LID coincided with the Covid-19 pandemic and market pressure to offset the costs by discounting a separate country quality premium.

Côte d’Ivoire and Ghana made history in 2019 by joining forces to create the Living Income Differential, or LID, a $400 premium on the export price of cocoa, to protect farmers from fluctuating prices.

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