Living income is a human right, and as such deserves a centred position in any conversations around the changes needed in the cocoa sector. Living income is also the necessary precondition for all the other challenges in the cocoa sector to be properly addressed. When farmers must choose between feeding their family, and not cutting down old growth trees, it is not a choice. When they must choose between feeding their family or sending them to school, it is not a choice either. Without a living income for cocoa farmers, cocoa will never be sustainable.
The past years have seen a series of major developments on the topic of living income; the introduction of the Living Income Differential by Ghana and Côte d’Ivoire in 2019; the development of Living Income Reference Prices by amongst others Fairtrade and Tony’s Chocolonely; Living Income Benchmarks becoming available for the major cocoa producing countries by the Living Income Community of Practice; many different reports on the topic; and a whole range of programs developed by various companies aimed at increasing farmer incomes. The conversation has also moved from questions around the measurement of living income towards discussing strategies of closing the gap. And, increasingly, farm gate prices are becoming elevated as topic of debate. In short, living income has become an accepted goal for the cocoa sector.
However, there is an overall lack of open discussions leading to concrete commitments towards a living income, either by individual companies, by governments, or by sector-wide initiatives. Company purchasing practices have tried to circumvent or avoid higher prices such as the LID or Living Income Reference Prices. There has been very little public conversation about the industry’s business model, including about how they set the prices they pay. There is an increasing focus on better-off farmers, ignoring the plight of the lower income farmers. A top down approach is adopted and there are precious few farmer voices heard in this conversation, while gender equality is largely side-lined in this conversation.
It is therefore no surprise that many farmers are still not earning a living income. In fact, most are very far from earning a living income, and not even moving towards it. And many actors are largely pointing at what others need to change in their approach, rather than being willing to change themselves.
Both industry and governments will need to significantly change their business as usual. Let us be very clear; not a single stakeholder group is currently doing what they should be doing to ensure farmers achieve a living income.
Resistance to the necessary change is real. A lot of this resistance has found its way into a wide range of assumptions, simplifications, and sometimes plain wrong ideas around why living income hasn’t been achieved yet.
The first part of this Living Income Compendium tries to answer these “myths” in a concise but clear manner, as a Frequently Asked Questions of sorts. The second part suggests a way forward, outlining actions for all actors involved, as well as providing a prioritisation of actions.
Read or download full report here.