The Conseil du Café-Cacao in Côte d’Ivoire and Ghana Cocoa Board have confirmed their intention to ‘review’ sustainability certifications and their effect, if any, on adoption of the Living Income Differential they recently proposed.
The concept was first outlined in July 2019, when the Cocoa Board first unveiled the new pricing mechanism for trading cocoa. The mechanism takes into consideration what they described as ‘a fixed living income differential’ that will provide farmers with “a decent income.”
Instead of the US$2,600/tonne floor price that was proposed in June 2019, which was to be introduced for the 2020/21 season, a US$400 per tonne differential was instituted, and written into export contracts. The differential would kick in if market prices falls below US$2,600.
Following a 9-10 October 2019 Committee of Experts Meeting in Abidjan, Côte d’Ivoire’s capital, the Cocoa Board and Conseil du Café-Cacao released a statement in which they described the LID as a way to achieve a decent income for all cocoa farmers “without exception.”
“Some buyers have shown strong commitment to the new system and its implementation by buying the 2020/2021 crop year which has the US$40/tonne living income differential,” they said.
“The LID focuses on the livelihoods of all cocoa farmers without exception,” they said, noting that, in contrast, “sustainability programmes being implemented by brands only affect a selected few farmers.”
The Cocoa Board and Conseil du Café-Cacao went on say, “It has been observed that the brands are focusing more on their sustainability programmes at the expense of the LID, which rather has more direct positive impact on all cocoa farmers.
The committee is therefore re-examining all sustainability and certification programmes for the 2019/20 season.”
They said a firm decision on the continuation or discontinuation of all sustainability and certification programmes will be communicated to stakeholders by the leadership of Conseil du Café-Cacao and Ghana Cocoa Board at the World Cocoa Foundation Partnership meeting in Berlin. That meeting takes place 23-24 October 2019. In a related development, the Cocoa Association of Nigeria recently confirmed that it is working with its counterpart in Cameroon to agree a price premium for cocoa similar to the one between Côte d’Ivoire and Ghana.