GHANA, CÔTE D’IVOIRE TAKE STEPS TO REINFORCE LID AND FARMER WELFARE IMPROVEMENT AGENDA

Date: 08th July 2022

Ghana and Côte d’Ivoire have taken steps to reinforce their goal to achieve a living income for cocoa farmers in the two-leading cocoa-producing countries, by securing a renewed commitment from their multinational cocoa buying partners in a meeting held in Accra.

Ghana and Cote d'Ivoire established the Living Income Differential (LID), as part of a new cocoa trading mechanism to ensure that every tonne of cocoa beans sold by the two countries attracts an extra $400.00 which is paid to farmers. The objective was to achieve a target floor price of $2,600/MT, of which a minimum of 70% ($1,820/MT) goes to the farmers.

Within its three years of implementation a combination of a persistently low price of cocoa on the international market and the adoption of various mechanisms by multinational cocoa buying companies to undermine the effect of the LID, particularly through the discounting of country origin differentials (for the quality of beans), has reduced the inflows realised by the producing-countries and ultimately, farmer incomes.

On Friday, 8th July 2022, a high-level meeting with senior executives of the multinational cocoa buying companies, chocolate makers, traders and processors was held in Accra at the instance of the Côte d’Ivoire – Ghana Cocoa Initiative (CIGCI) and championed by the governments of the two countries.

Mr Alex Arnaud Assanvo, the Executive Secretary of CIGCI, said it was important for all stakeholders to appreciate how actions taken on the market impact directly on the welfare of farmers and on the collective agreement to ensure sustainable cocoa production. The buyers, he insisted, must go beyond just agreeing in principle to improve farmer income and also act towards its attainment.

Hon Joseph Boahen Aidoo, the Chief Executive of Ghana Cocoa Board (COCOBOD), stated that “to have a sustainable cocoa industry, it is imperative that we bring into focus the farmer, who is at the centre stage of whatever we do. Once the cocoa farmer is weakened, the entire chain will collapse,” he cautioned. “For us, we believe that the Living Income Differential was to let the farmer get a just share, not just a fair share, but a just share, of the price of cocoa on the international market.”

Mr Ibrahim Kone Yves, the Director-General of Le Conseil Du Café-Cacao (CCC), also pointed out the need for all stakeholders to work together to address challenges which impact the cocoa industry. He emphasised the need to strengthen the LID as a mechanism which ensures that the price paid to cocoa farmers is reasonable and within the framework of sustainability.

At the end of the meeting, the senior executives who represented the multinational cocoa buying companies, chocolate makers, traders, processors and the governments of Ghana and Côte d’Ivoire signed a joint statement of intent toward an economic pact for sustainable cocoa. The pact opens a path to develop proposals for short, medium, and long-term actions to strengthen current efforts to attain living incomes for cocoa farmers in the two countries.

The companies that signed the joint statement at the end of the meeting were Barry Callebaut, Blommer, Cargill, ECOM. Ferrero, GCB cocoa, Hershey and JB cocoa. The others were Mars, Mondelez, Nestle, Olam, Puratos, Sucden, Tony’s Chocolonely and Touton.