<divclass="texte">[...] Andy Harner, global cocoa vice president at Mars Chocolate
<i>“I would disagree with any naive thought of just passing through price increases to farmers. It's unfortunately more complicated than that.”</i>
He said while the industry agreed that farmers needed higher incomes, <mark>It was more sustainable to empower farmers to negotiate a fairer price and to lobby producing countries to award farmers a greater percentage of the global cocoa price</mark>. This strategy has been employed by Cocoa Action, an industry initiative by manufacturers and processors including Mondelēz, Barry Callebaut and Cargill that aims to improve farmer yields through fertilizer use and training. [...] Mars’ Andy Harner said it was a naive assumption to add 3% for the price and then try to add that 3% to a cocoa farmers’ price. <i>“The supply chain really isn't that direct and transparent,”</i> he said.
<divclass="texte">Other benefits are less obvious but just as valuable. <mark>The world market for cacao is marked by high price volatility. Small-scale producers end up at the mercy of market forces entirely outside their control</mark>, resulting in boom and bust cycles that at best discourage farmers from investing in growing more cacao, and at worst, bankrupt them entirely. Some of our partners offer farmers much needed stability by paying a fixed price for their beans, well above the world market price, which is set at the start of the harvest and guaranteed through the season.
<divclass="texte">I also came to appreciate the limitations of my original question. <mark>The price paid for cacao matters, but it needs to be multiplied by the volume of cacao produced in order to reveal a farmer’s total income</mark>. Similarly, income tells only half the story (or less, if the farmer gets additional money from growing coffee or other work), because if a producer sells a lot of cacao but spends a fortune on fertilizer to grow it or logistics to transport it, they may end up losing money. And all this before considering a place’s cost of living! Clearly, the more I learned, the more questions arose. [...] From my perspective, as an advocate for small farmers, I need price to be above cost of production — at least by 20 percent or more. However, we don’t know enough about cost of production and farmer incomes for coffee and cocoa. We have small data sets and handpicked examples. <mark>We need to learn the relationship between farmer income and a living income</mark>. So… yes, price is important but is still a limited indicator of sustainability and farmer livelihoods.
<ahref="https://dailycoffeenews.com/2017/09/19/farmgate-price-an-important-but-partial-piece-of-the-sustainability-puzzle/ ">Farmgate price, an important but partial piece of the sustainability puzzle</a>
<br><ahref="https://makechocolatefair.org/issues/cocoa-prices-and-income-farmers-0">Cocoa prices and income of farmers</a>
The farm gate price, the living income of farmers, the cocoa price market, the cocoa price volatility; these are the different notions that are addressed when we look at the creation of a living income for farmers.
How can a living income or a farm price, which to be fair should be fixed and defined, coexist with a market that makes prices fluctuate?
Ghana and Côte d'Ivoire have introduced a living income (if I understand correctly it is a farm price). The living income differential is calculated on yield forecasts, so it is not adjustable or proportional. It is a fixed income per bag of cocoa, so the farm infrastructure must be able to produce enough bags to ensure a good income for all farm workers.
The cocoa price market is the stock price of cocoa, which sets the farm-gate price but in relation to the volatility of the cocoa price. the living income differential set up in Ghana and the Ivory Coast ensures a minimum income for farmers to protect them from market fluctuations.
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