WEST AFRICA – Civil society groups in West Africa under the auspices of the African Platform for Sustainable Cocoa have called on the EU to intervene to help protect Living Income Differential (LID) payments to cocoa farmers. 

According to the African Platform for Sustainable Cocoa (AFSC), the cocoa industry players are refusing to pay at the current market price plus the LID as they had earlier promised. 

AFSC claims the situation jeopardizes the efforts made on cocoa sustainability so far, and the commitment to better remuneration for the producers. 

 “In Cote d’Ivoire and Ghana, the market situation had raised hopes of a higher price for cocoa producers after years of low prices. But the farmgate price of cocoa for the 2023-2024 season announced in the two countries did not reflect the price on the world market,” AFC said. 

The LID was introduced by the chocolate and cocoa industry in 2019 as a pricing mechanism to address the issue of low incomes for cocoa farmers in West Africa. 

The LID is made to help cocoa farmers achieve an income to maintain a decent standard of living in their specific region. 

Despite the positive intentions behind LID, civil society groups are becoming increasingly concerned about its effectiveness noting that uneven distribution and delays in payments to farmers limits its impact. 

Additionally, the sustainability of LID payments is at risk due to fluctuating cocoa prices, economic challenges, and the need to strengthen the cocoa sector’s resilience. 

AFSC said, “We cannot fundamentally change the situation unless both the origin governments and the companies provide transparency. It is necessary to open discussions on the management of the stabilization fund financed by the LID.” 

The Ivorian Platform for Sustainable Cocoa (PICD) pointed out the inability to purchase cocoa now because of the risk involved when markets turn, and cocoa prices fall.  

“There is no point in having high prices in 5-6 months if all the contracts are sold at a low price today. The farmgate price for the next season will be set based on the contracts sold. We call on the industry to buy cocoa now, and end this practice of forcing prices down,” said AFSC. 

Cote d’Ivoire is however trying a new approach to boost farmer incomes. The world’s largest cocoa producer recently launched the ‘National Coffee-Cocoa Traceability System’ to improve the marketing flow management mechanism. 

The system’s primary objectives include pin-pointing the origin of coffee and cocoa products at every stage of the marketing process, ensuring that producers receive the guaranteed minimum farm-gate purchase price. 

The system also aims to secure financial transactions within the sector and preserving product quality by enforcing minimum sustainability standards.