By Ange Aboa
YAMOUSSOUKRO (Reuters) – Ivory Coast’s cocoa farmers union will withdraw from chocolate industry sustainability programs if companies try to avoid paying a premium aimed at combating farmer poverty, it said on Thursday.
The world’s top producer introduced a $400 per tonne premium this season, known as a living income differential (LID), to increase farmer wages.
The move was welcomed by farmers, but it has driven up prices for Ivorian cocoa just as the coronavirus pandemic dents global demand, causing friction between large chocolate-making companies and the workers growing the raw crop.
At stake are the sustainability schemes that certify that the cocoa that international companies buy is free of environmental and human rights abuses. They allow companies to market their chocolate as ethically produced and charge more for it.
“We are suspending our collaboration around sustainability and certification programs with chocolate makers and manufacturers who will oppose payment of the LID,” the farmers union said in a statement.
Ivorian and Ghanaian cocoa regulators this week accused Hershey of sourcing unusually large volumes of physical cocoa on the ICE futures exchange in order to avoid the LID, and said they will cancel all cocoa sustainability schemes that the U.S.-based company runs in their countries.
Hershey says it is fully participating in the program.
The union said that producers in Ghana and Ivory Coast will set up a monitoring committee in the coming weeks to assess the situation.
(Writing by Edward McAllister; Editing by Aaron Ross and Bernadette Baum)
