Fairtrade has urged for the European Commission and European governments to commit to recognising living incomes in “forthcoming human rights due diligence regulation” for the European cocoa and chocolate sector.
This comes following the announcement of a 25% reduction in the farm gate cocoa price set by the Ivorian government for the next six months.
Fairtrade revealed that, for their part, Fairtrade certified cocoa co-operatives will earn the Fairtrade Minimum Price for their Fairtrade sales during this period, since the government-set price has dipped below it.
The drop in price comes after the governments of Côte d’Ivoire and Ghana, which produce two-thirds of the world’s cocoa, implemented a Living Income Differential (LID) of $400 USD per tonne on all cocoa purchased from farmers in the region.
According to Fairtrade, a backlog of unsold cocoa from the October 2020 to March 2021 period has been attributed to reduced demand due to the COVID-19 pandemic, with some reports that some buyers had reacted to the LID by reducing stocks or seeking out cheaper cocoa from other sources.
Jon Walker, Senior Advisor for Cocoa at Fairtrade International, commented: “While some buyers have explicitly supported the LID, it’s not clear if all are. The LID is a powerful intervention by the Ivorian government that seeks to provide stability and improvement to all farmers’ livelihoods, which we have supported from the beginning. There needs to be a level playing field, and the human rights due diligence legislation under discussion in the European Union and member states provides just such an opportunity.”
The European Commission is holding a series of multi-stakeholder talks on sustainable cocoa to feed into relevant ongoing Commission initiatives, including on due diligence and deforestation. Human Rights Due Diligence proposals are expected from the European Commission in 2021 alongside a proposal that may specifically name cocoa on reducing deforestation.