On June 12, 2019, the governments of Cote d’Ivoire and Ghana announced a floor price of USD 2600 per ton of cocoa beans, an increase of around USD 105 on today's world market price.
The Rainforest Alliance welcomes this collaboration between Ghana and Cote d’Ivoire and, whilst further details remain to be discussed, we praise the bold move of the two governments that aims to ensure that millions of cocoa producers receive a price for their cocoa that allows them to earn a decent living.
Key to our vision of sustainable supply chains is that producers can implement sustainable practices and run a resilient and profitable business; they should be able to make long term investments in sustainable production, and earn a living income. Unfortunately, the current situation for many cocoa producers does not match this vision.
Farmers in Ghana and Cote d’Ivoire together are responsible for around 65% of the global cocoa production. For these farmers, a better farmgate price can help contribute to achieving a higher income, if combined with access to better services to professionalize the farm. A higher cocoa price should not only lead to a higher and more stable farmgate price but also to more and better public investment to ensure a more sustainable sector through better services, infrastructure and law enforcement by the governments.
A floor price mechanism could especially lead to higher producer price levels and professionalization of the sector in the long term if the producing countries, starting with the two leading producers, further align their agricultural policies and cocoa marketing policies in a way that reduces over-supply and creates viable alternatives for farmers, also outside cocoa farming. Effective national agricultural policy design and implementation, beyond the cocoa sector alone, will be necessary for this transition.
The current proposal creates an opportunity for the sector to show true commitment in creating a sustainable supply chain where farmers are able to earn a living income, professionalize and where there is no space for deforestation or child labor. Certification schemes can provide the needed assurance and transparency to monitor progress towards our joint goals.
The Rainforest Alliances encourages industry to follow the leadership of the two governments and make it a joint industry effort to realize a more sustainable cocoa sector.