NO SILVER BULLETS:
CLOSING THE $10 BILLION INCOME GAP IN COCOA CALLS FOR CROSS-SECTOR ACTION
Cathy Pieters, Global Director Cocoa Life, Mondelēz International
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As one of the world’s leading snacking companies, we deliver on our purpose of snacking made right by taking action to address farmer poverty in the cocoa supply chain through Cocoa Life. At Cocoa Life, we believe a sustainable cocoa supply chain begins with empowered cocoa farmers. Alongside creating empowered cocoa communities and protecting and restoring the forests, we know we have a role to play in supporting the farmers who grow our cocoa in building sustainable livelihoods.
Farmer poverty remains one of the most prominent and complex challenges faced by agricultural communities across the world - including in cocoa communities in Ghana and Côte d’Ivoire. We believe that securing a Living Income - an income that enables a decent standard of living for all members of a household - is a critical enabler to building a sustainable livelihood and tackling this challenge. That’s why developing approaches to strengthen the income portfolio of cocoa farming households has been a priority and a KPI focus for our program from day one.
For years, we’ve been working with Ipsos to measure our impact on the ground, to continuously improve our interventions. Thanks to this in-depth measurement and evaluation work, we now have data deep enough to interrogate the topic of Living Income more closely.
Today, in partnership with Wageningen University & Research, we are sharing an executive summary paper containing new insights on this topic. This paper will be followed by a more comprehensive report shortly.
We estimate the annual income gap for cocoa farmers in Ghana and Côte d’Ivoire at $10Bn (calculated by focusing on enabling 75% of cocoa farming households, a clear majority, to reach a Living Income). Based on our analysis and data, we outline in this paper a reality where no single intervention, or interventions by any single actor within the sector, can create the transformational change needed to build the healthy rural economy necessary to support Living Income for all farming households.
To lift everyone towards a Living Income, it is necessary to consider and address the drivers of farmer income holistically, through sector wide collaboration, coordinated by government leadership. We are therefore calling on all cocoa sector actors, governments, and beyond to:
- Develop a strategy to accelerate stimulation and diversification of rural economies;
- Producing governments can convene a roundtable to achieve action commitments from all who can contribute and benefit from a thriving rural economy
- Develop data and science driven frameworks that identify individual roles and targets, for tangible contribution by all actors;
- We want to evolve towards appropriate actionable commitments that are based on the recognition of the full extent of the Living Income challenge
- Explore practical tools that allow meaningful collaboration on initiatives within and beyond the cocoa sector;
- Multi-stakeholder coalitions can implement integrated landscape approaches
- The cocoa industry can continue to provide good, clear terms of trade and access to market
- Financial institutions can provide affordable credit and financing
- Governments supporting an enabling environment for business and economic development
- Step up cross-sector sharing of data and learnings, enabling faster progress;
- And most importantly, continue to provide choices to smallholder families to be at their best.
No one actor can solve this alone: we need everyone working together. We endorse the producing governments initiatives by paying the Living Income Differential and supporting the development of the African Regional Standard. And we are committed to continuing to address the root causes of low farmer incomes through our on-the-ground interventions in close collaboration with all partners and will continue our investment through Cocoa Life’s holistic approach, so that we can create positive impact at scale.
I invite you to read the new paper here. We hope by sharing these insights we can contribute to the sector debate and stimulate action, so that we can come together cross-sectors, governments, and beyond to close the income gap.