This archive report was first published on 3 November 2019.
Chocolate giants Barry Callebaut and Nestle have agreed to pay a supplement of $400 per tonne above the market price to help West African cocoa farmers, following a deal between Ivory Coast and Ghana.
The two countries, which account for over 60% of global cocoa production, announced in July that they would set a minimum price per tonne at $2,600 for the 2020/2021 season.
Nestle, the world's largest food and beverage company, has already started buying 2020/2021 cocoa with the living income differential, according to a statement.
"The LID will help improve farmers' living income and complement all our efforts to improving the lives of farmers," Nestle said.
However, experts say that the deal may not be enough to lift farmers out of poverty, with many earning less than $1.2 per day.
"This is a plus for the producers, but even if they were to get the whole of the price increase, it wouldn't lift them out of poverty," said an anonymous expert.
Barry Callebaut, another major chocolate maker, has also agreed to pay the living income differential, but stressed that it should be executed in a way that contributes to sustainability and improves farmer livelihoods.
"This is historic! The two countries together have managed to convince private buyers to raise the purchase price so that producers can earn more," said Michel Arrion, executive director of the International Cocoa Organisation.
