Executive Secretary of the Cote d’Ivoire Ghana Cocoa Initiative (CGCI), Mr. Alex Asanvo, has confronted major cocoa marketing corporations on their reluctance to offer fair prices to farmers and producers.
Speaking during a panel discussion at the ongoing World Cocoa Conference in Brussels, Mr. Asanvo questioned why purchasers of cocoa have consistently failed to honor prevailing market prices often reported by global news outlets.
According to the Executive Secretary of the CGCI, global cocoa buyers have habitually exploited the market for their own gain, leaving farmers and producing nations at a disadvantage within an unjust trading system.
Amidst the rising cocoa prices on the global market, farmers and civil society organizations in producing nations are advocating for buyers to adopt a base price of $10,000 as a reflection of current market trends.
Mr. Asanvo believes that this demand is exerting pressure on governments in terms of domestic pricing but is not being reflected in the market.
“Today, all the global news cables are quoting $10,000 Dollars as price for cocoa on the international markets; this has put pressure on governments of producing countries as farmers and civil society groups push for local prices to be set at prevailing figures on the international markets but let’s ask ourselves if buyers are willing to pay same” Mr. Asanvo observed as he joined panelists on Monday to discuss the topic “The quest for the living income of smallholder farmers: why are we stuck and how can we fix it?”
Mr. Asanvo highlighted that there is an imbalance between the demands imposed on producing countries by buyers and the actions taken by market players themselves. He emphasized the lack of trust, consistency, and stability across all aspects of arrangements among the key stakeholders in the global cocoa value chain. This lack of cohesion has hindered the effective implementation of policies and programs, including the Living Income Differentials (LID), designed to benefit farmers.
While acknowledging significant progress in advocating for a living income for farmers, with the introduction of the LID being a notable achievement in the past five years, the Executive Director of CGCI emphasized that more efforts are needed to ensure farmers receive fair compensation for their labor and dedication.
“We all know, that from whatever position we’re seeing it from, we owe farmers a living income. We cannot shun our responsibilities and capabilities – because we know we can make it. So yes, things have changed tremendously, hence my nuance on “why we are stuck”. We are not stuck. We are in a dynamic process. The peripherical idea of a living income for farmers – has come to the center of the conversation. And this panel is illustrative of that” he emphasized.
On the question of whether the LID has failed its intended purpose or not, Mr. Asanvo likened the policy to pointing to a moon and actually reaching it, arguing on the affirmative that despite the criticisms, “the circumvention and the weaknesses encountered as a results of origin differential downsides, the policy has still survived and continues to target a floor price to enable farmers get a living income”
Mr. Asanvo suggests that to foster trust, all stakeholders must prioritize accountability and transparency. He points out that producing countries have already taken steps in this direction by regularly publishing the average achieved forward sale price and implementing traceability systems to track not only volumes but also prices.
He argues that companies, like producing countries, should also embrace greater accountability and transparency.
“This, they can do Disclosing how much they source at country level every year; how many farmers are in their sustainability programmes and how much they’re earning. We need some data to get to the moon. What cannot be measured cannot be fixed”. he said.
The Executive Director of the CGCI further emphasized the importance of consistency regarding sustainability, highlighting that the concept of a living income should be integrated into the sustainability standards of both exporting and importing countries.
He suggested that voluntary sustainability programs should incentivize farmers with a living income or a price equivalent to a living income. According to him, achieving sustainable cocoa production is impossible without ensuring that farmers receive a living income.
Mr. Asanvo advocated for a stable and predictable market forces to help shape expectations towards an ambitious plan that guarantees a living income for farmers, asserting that “producing need a predictable floor price, with a dedicated mechanism to deliver it irrespective of terminal market prices since history shows that commodity markets are prone to price falls as sudden as price rises – and sadly for farmers, falls are way longer than rises.”