Dutch ethically-founded chocolate brand Tony’s Chocolonely has moved to support cocoa farmers in Ivory Coast and Ghana with its operations through increasing the premiums it pays for crops, in a bid to drive its mission of achieving a living income for key communities in its supply chains, reports Neill Barston.
Its investment comes as the sector in West Africa has been severely impacted by a downward trend in cocoa commodity prices, a significant spike of over 50% additional fertilser costs, as well as major cost of living increases – estimated to be soaring at a rate of 14% per person per day, according to the firm.
In response, Tony’s, (see our video interview with them for its World Confectionery Conference appearance, pictured, last month), has confirmed it is increasing the price it pays for cocoa by 82% in Ivory Coast and 77% in Ghana (which has retained a slightly higher value to its cocoa), in line with inflation. Consequently, the business said it is calling on other chocolate companies to also pay an even higher price in addition to the Fairtrade premium to help reduce the risk of farmers being pushed further into poverty, due to the cost-of-living crisis.
As the business noted, the cost of fertiliser in particular is a major concern, highlighting Ghana’s Cocobod cocoa organisation noting a three-fold increase in prices since 2019 is likely to prove a major barrier to farmers delivering productive crops. This is especially the case given that the bulk of the sector remains centred around production methods with small, family-owned farms that are largely existing on wages of under $1 a day, well below UN defined poverty levels.
In light of this, Tony’s set out its commitment to pay more follows the increased Living Income Reference Price (LIRP) set by Fairtrade as of October 1st, in light of rising fertiliser and living costs, which it believes is a crucial element of delivering sustainability in the industry.
Moreover, in real terms, this will mean that in Ivory Coast, living income reference prices for cocoa increase from $2200 per ton to $2390 per ton from this month. In Ghana it increases from $2100 per ton to $2120 per ton. As the company highlighted as a key concern, the farmgate price paid by the government to farmers at $1225 (Ghana) and $1344 (Ivory Coast) the gap between those figures and a living income has widened further.
The move to pay farmers more in West Africa follows an adjustment to Tony’s retail pricing in the UK – adjusting its 80g bars from £3.49 to £2.99, amid major pressure on household budgets across Europe, with inflation within the UK running at more than 10%, which the company felt needed to be reflected in its pricing.
Furthermore, as part of Tony’s Open Chain, Ben & Jerry’s, ALDI, Dutch supermarket chain Albert Heijn, as well as FMCG brands Jokolade, Vly Foods and The Flower Farm have all committed to pay cocoa farmers more for their cocoa. Tony’s Open Chain is an initiative that enables companies to join the fight against modern slavery and child labour in cocoa by becoming a ‘Mission Ally’ and following Tony’s 5 Sourcing Principles – the company’s tried and tested way of sourcing fairer chocolate.
Joke Aerts, the company’s Open Chain lead, believed that its latest initiative would drive impact. She said: “Cocoa farmers have the right to sustain a decent standard of living for all members of their households. But the industry has been slow to catch up. More and more big players agree that a living income should be the standard everywhere. But income diversification and productivity improvement projects fail to address the necessity of a living income. Paying the Living Income Reference Price for cocoa is a core driver for getting cocoa households out of poverty. That’s why we are inviting all chocolate brands to join us in our mission, by joining Tony’s Open Chain.”