In the food and beverage industry, the issue of fair prices for cocoa farmers has become a pressing concern. National governments aim to establish a farmgate price each cocoa season to ensure fair compensation for farmers and protect them from the impacts of low prices. Unfortunately, cocoa farmers in Ghana and Côte d’Ivoire, who account for over 60% of global cocoa production, continue to face problems of exploitation, child labor, and deforestation due to widespread poverty in the cocoa supply chain.
Dutch confectionary company, Tony Chocoloney, has raised awareness about these issues and the urgent need for change. They have highlighted the deep-rooted problems caused by poverty, including exploitation, child labor, and deforestation. While recent increases in farmgate prices in Ghana and Côte d’Ivoire have signaled progress, the Living Income Reference Price (LIRP), which represents a fair income for farmers, remains unmet.
The LIRP, developed by Fairtrade with support from Tony’s Chocolonely, exceeds the national prices for cocoa. In Ghana, the LIRP represents an additional $316 per metric tonne, while in Côte d’Ivoire, it adds $714. Some companies do pay premiums on top of the farmgate price, such as Fairtrade and Rainforest Alliance certifications. However, the main reason the LIRP remains unattainable is the international market prices, which are set too low and determine the farmgate prices.
The unwillingness of major market players to pay more for cocoa is a significant factor contributing to the unmet LIRP. Companies are prioritizing their profits over a fair price that would enable cocoa farmers to earn a living income. However, Tony’s Chocolonely is leading the way by ensuring that all 100% of the cocoa beans sourced through their Open Chain initiative are priced and paid at the LIRP.
While concerns about higher prices impacting consumers exist, paying cocoa farmers the LIRP does not result in significantly higher prices for consumers. Companies can choose how to manage the extra costs in their supply chain, and not all of these costs are passed on to consumers. Additionally, the cost of cocoa itself plays a minor role in the final price paid by consumers.
As part of their commitment to addressing these issues, Tony’s Chocolonely and other companies sourcing cocoa through their Open Chain initiative will pay an additional percentage on top of the national price to support cocoa farmers. This commitment demonstrates the importance of achieving a fair price for all stakeholders involved in the cocoa industry.
Keywords: food and beverage industry trends, food manufacturing trends, food processing technology, food distribution trends, food and drink industry innovation, food and drink sustainability, food and drink regulations, food and drink packaging, food and drink marketing, food and drink consumer trends.
