Sustainable Cocoa

The cocoa supply chain is unique. Cocoa production is concentrated almost exclusively in two countries: around 70% of all the cocoa produced in the world comes from Côte d’Ivoire and Ghana. Almost 90% of cocoa is grown by small-scale farmers who typically live in abject poverty. The sector is rife with child labour, deforestation and human rights violations. The EU, as a region with the world’s highest cocoa consumption and where most chocolate companies operate, has a significant responsibility in improving the livelihoods of cocoa farmers and thus making the sector more ethical and sustainable.

In an attempt to confront some of the challenges in the sector, the governments of Côte d’Ivoire and Ghana introduced the Living Income Differential (LID) in 2019—a pricing mechanism that adds a premium to cocoa prices to help address farmer poverty, marking a critical step toward tackling systemic issues in the sector. In parallel, the European Commission launched in 2020 a multi-stakeholder dialogue (the “cocoa talks”) under the EU Green Deal to enhance the sustainability of cocoa production and trade. This initiative brought together representatives from producing countries, EU institutions, cocoa farmers, companies, and civil society to drive progress.

Our View

The Fair Trade Advocacy Office (FTAO) recognises that as in many global value chains, the cocoa market is not designed to incentivise investments for improving the lives of producers. Due to extremely low prices, the majority of cocoa farmers can barely sustain themselves and their families, let alone make expensive investments to combat human rights violations and curb deforestation. We believe that such issues can only be resolved if farmers are paid a living income.

The EU should, based on the core human rights obligations referred to in the UN Guiding Principles on Business and Human Rights, include obligations to guarantee a living income in the cocoa sector, and should support processes to calculate updated living income benchmarks for major cocoa-producing countries. Effective implementation of the EU Deforestation Regulation, the Corporate Sustainability Due Diligence Directive and the Forced Labour Regulation must be used as drivers to create long-term partnerships with cocoa-producing governments while ensuring all relevant stakeholders such as community representatives, farmers and civil society are engaged to find solutions.