What strong EU regulations for cocoa could mean for farmers, and why Fairtrade supports it

By Jon Walker, Senior Cocoa Advisor at Fairtrade International

Fairtrade International has co-signed a joint position paper calling for the European Union to implement a regulatory approach to sustainable cocoa, along with Barry Callebaut, Mars, Mondelez, Rainforest Alliance and the VOICE Network. The paper calls for the EU to enact legislation that requires all companies placing cocoa or cocoa products on the EU market to enact mandatory due diligence on human rights, child labour and the effects of cocoa production on the environment.

Most critically, for Fairtrade, the position paper states the ultimate aim is a fully sustainable cocoa supply chain that provides living incomes for cocoa farmers. This should be an outcome of any Human Rights Due Diligence legislation, as a living income provides access to those things that are established as human rights: nutritious food, water, decent housing, clothes, education and medical care.

In 2018, Fairtrade released a report showing 58 percent of study of 3,000 cocoa growing households lived in extreme poverty in Côte d’Ivoire. In response, to increase farmer income, from 1 October this year we increased our Fairtrade Minimum Price by 20 percent and the Fairtrade Premium by 20 percent. This means for deliveries this year there will be an additional 17 percent for any Ivorian cocoa sold under the Fairtrade Minimum Price compared to the current farm gate price. Farmer incomes will increase further next year with the governments of Côte d’Ivoire and Ghana’s remarkable policy decision earlier this year. Through the governments’ market intervention, farm gate prices of $1,820 per tonne for farmers for deliveries from the 1st of October 2020 are required. However, this price of $1,820 still leaves some way to go to reach the Fairtrade Living Reference Price of $2,200 per tonne at farm gate in Côte d’Ivoire and $2,100 in Ghana.

The role of the producing country governments in dialogue on legislation will be critical. The underlying issues of poverty and lack of access to decent opportunity mean that however well organized and funded a monitoring and remediation system on child labour is, without addressing the root causes the problem may reoccur somewhere else. Given this, it will be important to consider area-based approaches which strive to ensure vulnerable people are not exploited in other geographical areas or sectors.

We take it as a given that no responsible legislator would enable a situation where the burden of costs of implementation of any legislation are passed to farmers who are living in poverty. Well written legislation is designed with a multi-stakeholder approach that is inclusive of governments, civil society, companies and, critically, farmers. Giving farmers a voice in their future is central to Fairtrade’s own structures and consultative processes, both through the formation of cooperatives and in deciding the shape of Fairtrade strategy, standards, prices and premiums.

The position paper Fairtrade co-signed calls for a regulatory approach to cocoa by some of the biggest companies buying and selling cocoa and chocolate in the world. We consider this an important step to the stated ultimate aim of the signatories: a living income for cocoa farmers.