The economic-strangulating effect of the COVID-19 pandemic seems to be providing the chocolate industry with an opportunity to consider working together to support cocoa farmers during this critical time.
Fairtrade International’s Senior Advisor on Cocoa, Jon Walker, says on the path to sustainable cocoa, the COVID-19 pandemic is a large, unexpected, and frightening detour.
Fairtrade is concerned with changing the way trade works through better prices, decent working conditions, a fairer deal for farmers and workers in developing countries.
According to Walker, ‘’it is laying bare the precariousness of many people in all societies, including farmers and workers in the global south who were already struggling to get by.
‘’Working with over 1.7 million farmers and workers and their supply chain partners, Fairtrade is seeing the impact of COVID-19 unfold daily.
‘’The effects so far depend on the commodity, time of harvest, if the product is perishable or not, transport capacity, and current demand.
‘’Falling demand for some perishable goods has been swift, dramatic and will lead to hardship for producers.’’
Amid all the unknowns with this rampaging pandemic, including the impact on northern economies and health systems across the globe, ‘’the chocolate industry has an opportunity to consider how we can work together to support cocoa farmers during this critical time and act quickly’’, Walker insists.
The mission of Fairtrade, according to him, ‘’is to connect producers and consumers, promote fairer trading conditions, and empower producers to combat poverty and take more control over their lives — feels as relevant as ever.’’
Fairtrade has however announced that cooperatives can invest their Fairtrade Premium funds to minimise the spread of the disease and/or to mitigate any potential negative effects on farmers, and their communities, without prior approval at the organisation’s annual General Assembly.
The Fairtrade Premium is an extra sum on top of the selling price that cooperatives earn on every Fairtrade sale, and invest in projects of their choice to benefit their businesses and communities. In 2018, Fairtrade cocoa cooperatives earned more than $52 million in Fairtrade Premium.
Cooperatives can now choose to use premium funds, for instance, to payout as emergency cash payments, purchase and distribute face masks, or implement hygiene campaigns in their communities.
Many Fairtrade cooperatives have restricted their office operations to protect staff. Some are using alternative means such as WhatsApp groups to stay connected with members.
The Fairtrade Africa team in West Africa is setting up virtual groups to connect cooperatives with each other so they can share best practices and materials to keep their members and communities informed about the latest safety guidelines.
Fairtrade is assessing other options to provide additional support to producers, both at the regional level as well as globally. FLOCERT has paused all in-person audits to minimise the risk of spreading the virus. Certification decisions that can be made using documents or remote methods are moving forward. This includes trader certifications.
Living Incomes: More Important Than Ever
Continuing, Walker says ‘’ despite COVID-19, we are continuing our work on living incomes for cocoa farmers, albeit with some changes due to limitations on travel and in-person gatherings.
‘’A living income is a primary condition for households to afford essential needs, such as healthcare, and be able to save for unforeseen events, which is now ever so relevant.
‘’Price is one key element of farmers earning a living income. At the point where cocoa prices appeared to be recovering after the collapse in 2017, we are back to an environment of falling cocoa prices.’’
The Fairtrade Minimum Price is $2,400 per metric tonne at free onboard or FOB. In Côte d’Ivoire, the Fairtrade Minimum Price is measured against the Ivorian government’s published price (Valeur FOB garantie).
For the season October 2019 – March 2020, this resulted in a Fairtrade Minimum Price differential of $235.92 per ton being paid to cooperatives, which are required to pass it along in full to their farmer members.
Initial reports from traders indicated that Ivorian cocoa farmers received approximately $15.1 million more for their Fairtrade sales in October to December 2019.
The current Fairtrade Minimum Price differential for the mid-crop season, based on the newly published Ivorian government price, is $212.14 per metric tonne.
This additional income for farmers makes a real difference at any time, but now more than ever.
It appears strong and empowered cooperatives that can respond to their members’ and business partners’ needs can also contribute to enabling living incomes.
In 2019, Fairtrade’s West Africa Cocoa Programme reached more than 32,000 attendees at training in Ghana and Côte d’Ivoire, on topics including cooperative governance and good agricultural practices among others.
‘’We will be publishing a full report on data from this program later in 2020. While in-person training is currently suspended to comply with restrictions on movement, the Fairtrade Africa team is providing remote support to cooperatives on health and safety, as well as consulting on options for using their Fairtrade Premium most effectively’’, the senior advisor said.
Adding, he said, ‘’in addition, we have moved from strategy to implementation in living income pilot projects with cocoa cooperatives in Ghana and Côte d’Ivoire These pilot projects include paying our voluntary Living Income Reference Prices, as well as other interventions aimed at different aspects that contribute to higher incomes and stronger, more sustainable farms.
‘’Even as we all focus on protecting lives and livelihoods as a priority, our work on human rights and environmental protection continues. In 2020 we will launch a consultation on our Fairtrade Standard for Cocoa. Critical topics identified are Relevant alignment with the regulated markets in West Africa including the African Regional Standard; review requirements for Internal Management Systems at cooperatives; consider if strengthened requirements on deforestation need to be included; and consider if additional requirements on human rights due diligence – in particular, strengthened requirements on monitoring and remediation of child labour – need to be included.
‘’In this rapidly shifting situation, these are just some of the efforts underway to support cocoa farmers and communities. We appreciate the VOICE Network’s call for the chocolate industry to act.
‘’We’ve also seen interesting initiatives from industry such as broadcasting prevention messages from governments, donating hygiene products and making financial contributions to NGOs. We each have a role to play – you will have your ideas – let’s ensure farmers are part of the decision making.’’
