Ben & Jerry’s says it is committing itself to “economic justice” for its cocoa farmers in Côte D’Ivoire by bringing the amount it pays for the cocoa in its ice cream in line with Fairtrade’s Living Income Reference Price.
The living income is calculated to be $2.50 (£1.87) a day for cocoa farmers in the West African country. Most cocoa farmers in the region currently live in extreme poverty on less than a dollar a day, reports the Fairtrade Foundation.
In total, Ben & Jerry’s will be paying $800,000 (£606,000) over the next year, on top of the Fairtrade premium price it already pays.
Ben & Jerry’s has ramped up its social activism this year, especially in the US where its headquarters are based. The company’s social media posts in support of Black Lives Matter were shared widely, it released a “Justice ReMix’d” ice-cream, and campaigned for citizens to “vote for justice” in the presidential elections.
“We’re committed to working for economic justice through our ice cream. There’s so many threads in this story between climate resilience and colonialism and racism when you think about how the colonial global trade system works and how much has been extracted from countries, especially in West Africa,” says Ben & Jerry’s values-led sourcing manager Cheryl Pinto.
Why don’t cocoa farmers earn a living income?
Despite cocoa being the key ingredient in the $130bn chocolate industry, the smallholder farmers who grow it are some of the poorest in the world.
One issue is how cocoa is traded. The governments in Côte D’Ivoire and Ghana, which produce around 60 per cent of the world’s cocoa, set the prices in consultation with the buyers.
“If you imagine the supply chain looks like an hourglass with consumers at one end and farmers at the other, these processing giants are in the middle, giving them huge control over how much they pay producers,” explains Dr Louisa Cox, director of impact at the Fairtrade Foundation.
A consequence of this is the reality that child labour remains rife in cocoa supply chains.
“There are 1.6 million children working in the cocoa industry with 95 per cent of them doing dangerous work. This is unacceptable in today’s world. We welcome this move by Ben & Jerry’s and we hope it will inspire others to join us, too,” says Ben Greensmith, UK country manager of chocolatier Tony’s Chocolonely.
Wider adoption is necessary. In total, Fairtrade chocolate, most of which isn’t sold on living income terms, accounts for just six per cent of the chocolate sold globally.
The bittersweet cost of cocoa in 2020
This year, the Ivorian and Ghanian governments increased the price of cocoa by introducing a Living Income Differential, a $400 premium per tonne above the market price, that all cocoa buyers have to pay. They anticipate this should lead to farmers receiving an estimated average of $1.78 per kilo.
However, industry experts speculate this might only be a short-term win, with talk of the industry potentially seeking other sources of supply.
The new government legislation has brought the market price closer to the Fairtrade Living Income Reference price of $2.20 per kilo, and Ben & Jerry’s decided to use the opportunity to close the gap for the cocoa in its ice cream.
A living income is determined to be enough to provide decent housing and health care, clean water and education, plus a little extra for unexpected events – such as a pandemic or the effects of climate change on harvests – helping to break the poverty cycle.
While raising the price is central to enabling farmers to lift themselves out of poverty, Fairtrade reports two other main interventions are essential, too.
“It’s a complicated calculation,” says Fairtrade’s Dr Cox. “Pragmatic steps to work towards a living income include farmers improving productivity and diversifying incomes as well as the price of cocoa being raised.”
Ben & Jerry’s paying a Fairtrade Living Income Price Differential adds about $133 per tonne on top of the government’s $400 per tonne. The company estimates this will generate an extra $120 per farmer, per year.
How the money is spent will be closely monitored by Fairtrade and independent auditors. The hope is that farmers will use the extra money to invest in progressing towards a living income and evidence of this will be able to be used to change the narrative on price.
“Brands tend to focus on productivity and quality. They think farmers just need to grow more because then they can sell more and make more money. But price is still so critical – if we don’t increase prices farmers are never going to get out of the poverty cycle,” says Pinto.
“You can’t talk about climate change and climate resilience without economic justice. A farmer needs to be able to feed herself and her family before she feeds the world.”
Ben & Jerry’s says the long-term plan is to introduce living incomes in their other global supply chains, too and has already started working on the cocoa for its “chunks and swirls” and with Fairtrade on vanilla.