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19 April 2022

Nothing Changes, if Nothing Changes

The mid-crop cocoa farmgate price remains unchanged.


Nothing Changes, if Nothing Changes                                    

The government of Côte d'Ivoire announced its mid-crop cocoa farmgate price (aka the official price buyers must pay for their cocoa). The not-good-news in a cocoa shell? Nothing’s changed:

The current farmgate price is set at $1,403 instead of the needed living income reference price (LIRP) of $2,200. This means that all chocolate companies actually need to pay 57% on top of the current cocoa farmgate price so that cocoa farmers can earn at least a least a living income.

What’s the price of cocoa? We crunched the numbers. 

We estimate that, if Big Choco were to pay the LIRP for all cocoa they purchase, it would amount to around $1 billion1 in additional wages for cocoa farmers — that might sound like a lot but it’s peanuts if you look at the big picture and consider that it’s only 0.7% of global chocolate revenue.2 And while a living income is set at $2.49 per day in Côte d'Ivoire (LICoP, 2018), the 2018 Cocoa Barometer estimates that low prices lead to an average farmer income of about $0.78 per day. 

So why won't Big Choco give cocoa farmers their fair share? ‘Cause they choose to prioritize their profit over helping their business partners break out of the cycle of poverty . 

Walking the talk with Tony’s premium                          We’re leading by example and proving that it's absolutely possible to prioritize people and still make a profit. The cocoa farmers who supply Tony’s Chocolonely and Tony’s Open Chain Mission Allies with cocoa beans are protected when the cocoa farmgate price drops in terms of the pay they receive per ton. That’s because we put our money where our mouth is and pay them an additional Tony’s premium on top of the farmgate price and Fairtrade premium. 

And that premium isn't a fixed sum. It fluctuates to make up the difference to the LIRP. If the farmgate goes down, our premium goes up (and vice versa). Right now, we’re paying $798 in premiums (that’s 57% more than farmgate price) in addition to a co-op fee of $50.

Hey Big Choco, it’s time to step up your game – big time!      Stop prioritizing profit over people. And start paying the LIRP. Not sure where to start? Join us at Tony’s Open Chain, and we’ll happily give you the blueprint for a more sustainable cocoa supply chain with our 5 Sourcing Principles. Because only together can we make 100% slave free the norm in chocolate.

Sources:

[1] Cocoa Barometer 2018, Page 13 - Where is the money going?

[2] USD$1 billion is calculated as the amount it would cost big chocolate companies to pay the LIRP for cocoa from Ivory Coast. Cocoa volumes*LIRP – Cocoa volumes*Farmgate price. Numbers taken from publicly available sources:

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