The long-standing battle between cocoa farmers in Ghana, Ivory Coast and US-based Hershey takes another drastic turn after all sustainability programs are canceled.
Cocoa farmers in Côte d’Ivoire and Ghana will have to wait a little longer for the bonuses promised.
It was after two American chocolate makers reneged on their promise to pay bonuses of $ 400 per tonne of cocoa.
In a letter written by Ivorian and Ghanaian cocoa regulators, the US-based company is accused of buying an unusual volume of physical cocoa on the ICE futures exchange in order to avoid paying premiums, known as called Living Income Differential (LID) to raise country poverty levels among local farmers.
The arrangement, called the decent income differential, is intended to help improve the lives of peasants, the producers of the cocoa crop.
Abidjan and Acca accused the Hershey and Mars companies of switching suppliers and sourcing cheaper cocoa beans in order to avoid paying premiums.
Côte d’Ivoire and Ghana are the world’s leading cocoa producers.
But much of the harvest is exported to international markets in its raw form, sometimes with little added value.
The Ivorian and Ghanaian cocoa councils have accused the companies of conspiring to keep farmers in poverty.
In a response, Hershey said he was purchasing the crop based on “the needs of our business,” while Mars said he had supported initiatives to improve farmers’ incomes and livelihoods.
“Our concern is that by removing sustainability programs from the industry, cocoa farmers will no longer receive the benefits provided by our programs … (like) the price premium for certified cocoa,” the company said. in a statement reported by Bloomberg.
This year’s cocoa harvest season started in October.
Hershley is an American multinational corporation and the world’s largest chocolate maker.
With over $ 6 billion in sales each year, the Hershey Company is arguably one of the best chocolate makers in the world. Its products are sold in over 70 countries and include Whoppers, Almond Joy and Twizzlers.
The US-based company came to West Africa to expand its cocoa supply and in return had to provide a reliable market for the produce and also distribute bounties to reduce poverty in the region among the farmers.
Despite the company’s philanthropic model based on social protection and the environmental agenda, she has been involved in volatile ethical values, particularly in child labor in West Africa.
Ghana and Côte d’Ivoire produce two-thirds of the world’s cocoa and have historically prohibited other stakeholders from managing any project on Hershley’s behalf.
Hershley has always called cocoa a sustainable program, which means it is environmentally friendly and not linked to human rights violations.
Through such a model, Hershley provided a bonus to the respective countries that apply this model and are free from child labor and own cocoa plantations not based on protected forest land.
Alarming levels of poverty
Cocoa farmers in Ghana derive a per capita daily income of around US $ 0.40 to US $ 0.45 from production. This equates to an annual net income of US $ 983.12 to US $ 2,627.81 and represents two-thirds of the household income of cocoa farmers.
With low incomes and low economic resilience, cocoa farmers are struggling to make ends meet. A 2010 study found that spending by cocoa-producing households, excluding agricultural inputs, exceeded their average total income. This poverty has a direct impact on the children of cocoa growing communities. Children can engage in child labor because their parents cannot afford to hire adult labor.