Fairtrade is supporting the decision of Ghana and Ivory Coast to raise the farmgate price of cocoa to US$1,820 per tonne for all farmers.
The organisation sees the announcement as a real opportunity to drive change at scale for farmers in the two countries, especially at a time when global cocoa prices are stuck at unsustainably low levels.
A release issued on October 28 noted that cocoa farmers in the two countries produce more than 60 percent of the world’s cocoa supply and who have been hit hard by a collapse in cocoa prices in 2017.
The release noted that Fairtrade has publicly supported the governments’ implementation of the Living Income Differential, the additional sum to be paid per each tonne of cocoa that ensures the practical increase of the price that is paid to farmers.
“We have already adapted our Fairtrade standard to recognise the Living Income Differential in support of governments’ target for a farmgate price of US$1,820 per tonne,” the release said.
It added that “Fairtrade welcomes the clear call to action for the cocoa industry made by the governments of Cote d’Ivoire and Ghana at the World Cocoa Forum in Berlin on October 23.
After announcing a review of all certification and sustainability schemes, the governments’ ask, that paying the Living Income Differential as a priority ahead of any own sustainability programme, is clear and welcome by Fairtade.”
The release added that in addition to the public support for the Living Income Differential, Fairtrade has already taken additional significant measures to increase the amount cocoa farmers earn, recognising, as the governments do, the need for improved livelihoods.
As the only certification scheme, it has publicly campaigned for farmers’ right to a living income, Fairtrade is committed to continue to work alongside the governments to make this a reality.
“Fairtrade is the only certification scheme to focus on price, and as such is already making a tangible and significant difference to farmers’ incomes. This includes an increase to our mandatory Fairtrade Minimum Price – which acts as a safety net for farmers – by 20 percent for conventional cocoa from October 1 2019.
In addition to the Fairtrade Minimum Price, cooperatives selling cocoa on Fairtrade terms receive a Fairtrade Premium of US$240 per tonne for the benefit of their members and their communities – this has also increased by 20 percent from October 2019,” it said.
Unlike other schemes, the cooperatives receive 100 per cent of this value. The cooperatives agree democratically at their general assembly how this amount is spent.
In addition to recent changes to the Fairtrade Minimum Price, Premium and pricing standards, Fairtrade brings additional benefits. Producers have 50 per cent of the voting rights at the highest authority in Fairtrade General Assembly, underlying the model of representation.
The Fairtrade standards provide a framework through which Small Producer Organisations (SPO) implement practices for the benefit of their members, the wider community and the environment. Fairtrade contributes further to the empowerment of SPOs and their members through the West Africa Cocoa Programme, which focuses on SPOs becoming strong and viable organisations responsive to their members’ needs.
Fairtrade believe that a decent price for farmers operating in democratically run cooperatives forms the basis on which other sustainability goals can be achieved and that the Living Income Differential and Fairtrade certification are complementary.
The statement added that Fairtrade looked forward to collaborating with the governments of Ghana and Côte d’Ivoire to improve farmers’ livelihoods.
“We believe that Fairtrade shares the governments’ objectives and that Fairtrade certification and services to farmers can work in harmony with the Living Income Differential,” it added.