Two of the top cocoa producers of the world who account for 60 per cent of global supply – Ivory Coast and Ghana, have joined hands to set a minimum floor price for cocoa for chocolate companies in order to gain from their dominance in the global cocoa market.

Further, the two countries said that this strategy is also an effort by them to bring down the pervasive farmer poverty which has now become a blotch on the image of the chocolate itself and a threat for the future of the industry in West Africa. The low profits and earnings form cocoa cultivation for farmers is forcing young people from the profession that demands very hard labor but low profits.

The details would be ironed out between the two countries at a meeting to be held on July 3. However there is a debate about the strategy being an answer to lift cocoa farmers out of poverty among industry players, fair trade campaigners and even other cocoa producing nations.

The criticism of strategy stems from the fear that this strategy could force chocolate companies to source their products from somewhere else or to over-stimulate production which can ultimately result in a global price crash for cocoa.

Ivory Coast and Ghana plans to set a floor price at US$2,600 per tonne free-on-board and they have also announced that there would be no future trading in the commodity till such time that the strategy is put into place.

This is however not the first time that countries have attempted to lift cocoa farmers out of poverty.

Schemes such as third-party certification schemes such as Fairtrade, Rainforest Alliance and UTZ grant bonuses to growers meeting social and environmental standards have been tried out before. Sustainability programs have also been created by cocoa companies. And a farmer price at the start of each season is guaranteed by both Ghana and Ivory Coast.

However these measures have failed to resolve the issue.

“If you have a model that’s based on the gross exploitation of suppliers, it simply cannot work sustainably,” Edward George, an independent cocoa expert, said in an interview to news agency Reuters.

Farmers get just 6.6 per cent of the ultimate sale price for a bar of chocolate, estimated the Cocoa Barometer, which is a biannual report published by civil society groups.

The household earning of an Ivorian cocoa-farming family was US$2.50 per person per day – which is the living income benchmark, a Fairtrade International survey found last year.

In an interview to Reuters, Kouakou Kinimo is a pretty typical Ivory Coast cocoa farmer, felt anger at the situation.

“It’s not normal at all that they, the ones eating the chocolate, set the price. The farmer should set the price,” he argued. “The cars that they make, who sets the price for those? They do, and we buy them.”

The decision has however been applauded by farmer advocacy groups. “The only way that cocoa sustainability is going to move from being an aspiration to a reality is this type of coordinated action on price,” said Jon Walker, senior cocoa advisor at Fairtrade International.

(Adapted from ChannelNewsAsia.com)

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