Cocoa investors request major chocolate companies pay farmers more

By Anthony Myers

- Last updated on GMT

Image: Getty/	ampueroleonardo
Image: Getty/ ampueroleonardo

Related tags Cocoa Côte d'ivoire Ghana Sustainability

An investor letter issued earlier this month by non-profit Investor Advocates for Social Justice (IASJ) has called out international chocolate companies to end what it described as “exploitative purchasing practices,” mainly in Ghana and Côte d’Ivoire.

The letter, obtained by and addressed to Hershey and Lindt & Sprüngli, Ferrero, Mars Mondelez International, and Nestlé, proposes that the companies commit to providing all cocoa farmers with a “living income” by the end of 2025, a move that could enhance their corporate social responsibility and public image.

The group of financiers has also demanded support for “cocoa farmer resilience and security” by establishing long-term working contracts – and said in the letter that boosting farmer incomes will help address the “root cause” of child labour.

Earlier this year, at a launch of Nestlé’s income accelerator programme​ for cocoa farmers in West Africa, it was revealed that while farmer income had gone up, it was still short of a benchmark for living income.

According to the IASJ, chocolate producers have “repeatedly deflected investors’ requests for them to ensure cocoa farmers receive a higher farmgate price, by stating that the governments of Ghana and Côte d’Ivoire are responsible for setting the price for cocoa”.

Still, investors point out that chocolate companies should “pay sustainability premiums on top of the government-set price which are received directly by cocoa farmers”.

IASJ programme director Aaron Acosta said: “We’re calling on chocolate companies to use their purchasing power, through price interventions, to ensure cocoa farmers receive a living income. Because of their size and influence, chocolate companies are uniquely positioned to address systemic poverty by ensuring cocoa farmers receive a living income.”

A spokesperson for Nestlé said its income accelerator programme is helping cocoa farmers improve their productivity and increase net income.

 “We believe cocoa farmers should earn an income enabling them to maintain a decent and adequate standard of living for themselves and their families.”

As of now, the other companies have not yet responded to the IASJ letter.

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