Chocolate Makers Face Ultimatum Over Pay With African Farmers

October 17, 2019

Chocolate makers face the brunt of either supporting a controversial plan to raise the wages of poor farmers or risking a plan to end the growing demand for sustainable-conscious consumers.

Plantations in the neighbouring countries of West Africa, Côte d’Ivoire and Ghana (over 60% of the world’s cocoa crops), are frustrated by the slow adoption of a strategy to help improve the taxation of a $400 per ton (R6,000) premium taken in July. Wages. This week, they threatened to stop the procedures used by chocolate makers to prove that their beans were not grown in protected forests or under forced labor by children.

Yves Kone, managing director of Le Conseil, the industrial regulator of Côte d’Ivoire, said chocolate makers could not claim to be sourcing cocoa sustainably, while not supporting support for programs that would greatly improve the livelihoods of small-scale producers. . Du Cafe-Cacao, also known as CCC. According to the CCC, the sustainability program serves only a few farmers, and the new price mechanism will benefit all growers.

KONE told reporters at the business center in Abidjan on Friday: “We can’t pretend that we are working with farmers to invest in sustainable development and refuse to pay farmers.” “Sustainability is also paying for farmers and sharing Work hard.”

Income guarantee

The price plan for Côte d’Ivoire and Ghana aims to increase the average price of its cocoa beans from at least $2,600 per ton from next October, and farmers will receive about 70% of their compensation after deducting costs. So far this year, the average price of New York cocoa futures delivered in December was $2,372 per ton.

Analysts question whether the plan will work because the company cannot hedge the premium. Higher income incentives will also induce farmers to grow faster than the market needs (usually on land reclaimed in protected areas) and make prices more volatile.

The Ivory Coast had 16 million hectares (40 million acres) of forest in 1960, but by 2018 it had fallen to 3 million hectares. According to Global Forest Watch, Ghana is losing its forest at a faster rate than any other country in the world.

Independent cocoa expert Edward George said: “The problem here is that they will encourage more inferior production.” “There is a danger of overproduction, unsustainable production and destructive production.”

Sergey Chetvertakov, an analyst at Agribusiness Intelligence at IHS Markit, said that without a sustainable development plan, chocolate brands could not guarantee that the cocoa they purchased would not affect the protected area and could be grown without child labor. “Consumers need such a statement.”