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Ghana, Ivory Coast threaten to suspend cocoa companies' sustainability schemes

by Reuters
Friday, 20 November 2020 11:30 GMT

ARCHIVE PHOTO: Dried cocoa beans are packed in hessian sacks on a cocoa farm near Amankwakram in Western Ghana on the border with Ivory coast February 14, 2011. REUTERS/Hereward Holland

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Ghana's cocoa regulator said cocoa and chocolate companies in West Africa were thwarting government attempts to combat farmer poverty

By Maytaal Angel and Ange Aboa

LONDON/ABIDJAN, Nov 19 (Reuters) - Ghana's cocoa regulator has threatened to suspend the sustainability schemes used by major cocoa and chocolate companies to assure consumers that the beans they use are sustainably and ethically sourced.

In comments to the World Cocoa Foundation conference on behalf of Ghana and its west African neighbour Ivory Coast, Joseph Aidoo, chief executive of Ghanaian regulator Cocobod said on Thursday that cocoa and chocolate companies in West Africa were thwarting government attempts to combat farmer poverty.

As a result, their sustainability schemes, which allow companies such as Barry Callebaut and Nestle to charge consumers a premium for chocolate certified as sustainably sourced, could be suspended.

Barry Callebaut, Nestle, Hershey and Mars reiterated their support and financial commitment to efforts by Ghana and Ivory Coast to combat farmer poverty. Mondelez and Cargill did not respond to a request from Reuters for comment.

Ghana and Ivory Coast, which together produce two-thirds of the world's cocoa, introduced a living income differential (LID) or premium last year on all 2020/21 cocoa sales and said the proceeds would be used to raise the income of cocoa farmers who earn on average little over $1 a day.

"The (cocoa/chocolate) brands (have) openly announced their commitment to the LID (but) our intelligence indicates there is a ploy by some to derail (it)," Aidoo said.

"Any brand that is seen not to be serious in accepting the LID by mid-December 2020 must consider all its cocoa beans from Ghana and Cote d'Ivoire as conventional. We are prepared to name and shame these brands," he added.

Ivory Coast and Ghana have struggled to sell forward their 2020/21 cocoa crop since introducing the LID, in large part because the coronavirus-induced recession slashed demand for non-staple foods like chocolate.

Nestle, the world's biggest food company, said it is paying the LID when buying its "normal volume of cocoa purchases" from Ivory Coast and Ghana, adding it was one of the first to pay the surcharge when it was introduced.

Chocolate makers Barry Callebaut and Mars also said they were paying the surcharge, but did not specify volumes. Hershey said it pays the LID when buying 2020/21 cocoa "based on the needs of our business".

"While some in the industry are accelerating progress toward a modern, sustainable cocoa supply chain, others are not doing enough and must go further and faster," Mars said in an emailed reply to Reuters.

(Reporting by Maytaal Angel; editing by David Evans)