Global chocolate heavyweights, like Hershey and Lindt & Sprüngli, have been urged by shareholders to enhance cocoa farmer pay in their supply chains.
The Investor Advocates for Social Justice (IASJ) recently issued a letter calling on major chocolate makers to address exploitative purchasing practices, especially in Ghana and Côte d’Ivoire.
The letter, also directed to Ferrero, Mars Mondelez International, and Nestlé, demands that all cocoa farmers should receive a “living income” by the end of 2025.
The investor group also advocates for cocoa farmer resilience and security through the establishment of long-term working contracts.
Improving farmer incomes is seen as a solution to combating child labor and ensuring the stability of the cocoa sector by preventing farmers from leaving for better pay.
In response to rising cocoa prices, Nestlé’s income accelerator in Côte d’Ivoire led to increased pay but fell short of achieving living wage standards.
Despite the argument that government-set prices affect cocoa prices, chocolate companies have the ability to pay sustainability premiums directly to cocoa farmers.
IASJ program director Aaron Acosta emphasized the importance of chocolate companies using their purchasing power to ensure cocoa farmers receive a living income to combat systemic poverty.
Recent farmgate price increases in Côte d’Ivoire and Ghana aim to address the heightened cocoa prices due to global supply pressures.
Various factors such as crop diseases, poor weather conditions, regulations, and market speculation have contributed to the surge in cocoa prices.
Leading chocolate companies have been approached for comments on the issue to address the call for improved cocoa farmer wages.
Nestlé emphasized the need for cocoa farmers to earn a sustainable income, highlighting their income accelerator program’s impact on increasing farmers’ net income.
The other companies mentioned in the shareholder letter were yet to respond to requests for comments at the time of writing.
