Ivorian Cocoa Farmers Threaten to Boycott Programs in Price Spat
(Bloomberg) -- Ivory Coast’s cocoa farmers threatened to withdraw their participation from sustainability programs run by major buyers to pressure them to pay a premium on the crop.
Chocolate companies including Hershey Co. and Mars Inc. have been accused of trying to skirt a $400-a-ton charge introduced for this season aimed at raising farmer incomes. Meanwhile, buyers continue to spend on programs that allow their products to earn certifications that show their cocoa has been grown outside protected forests and without the use of child labor.
Mars and Hershey have denied that they’ve tried to avoid paying the premium, known as the Living Income Differential.
“We have learned with sadness that there is resistance by major companies to pay the LID,” Yao Dinard, vice president of an organization known as FOPCC, said on behalf of about 500 farmer representatives after a meeting with the cocoa regulator. Dinard said farmers are suspending their “participation of all certification and sustainability programs if the LID is not implemented.”
The comments show that farmers are taking the side of the regulator in a price dispute that’s pitted the world’s top producers against processors and chocolate makers and roiled the futures market. While most traders and chocolate makers agreed to support the LID charge, the coronavirus pandemic that locked down cities from Paris to Los Angeles meant many needed to cut costs.
Private sustainability programs reach only 10% of farmers, and the LID premium is needed to complement those social programs in Ivory Coast and Ghana, Dinard said.
“The least-paid actor in the global cocoa supply chain is the farmer,” Dinard said. “Only 6% of the $100 billion goes to growers.” Dinard said the farmers would support every effort by regulators in Ivory Coast and Ghana to enforce the LID.
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