The Managing Director of Ghana’s Cocoa Marketing Company, Vincent Okyere Akomeah has disclosed Ghana and Ivory Coast will from October 1 this year begin paying the Living Income Differential (LID) to cocoa farmers.
The LID an amount of US$400 to be levied on every tonne of cocoa beans from the two countries is said to be paid directly at the farmgate in addition to the producer price.
The premium was introduced by world cocoa giants, Ghana and Ivory Coast, in June 2019 aimed at tackling pervasive poverty endured by cocoa growers.
Mr Akomeah assured of government commitment to ensure the full amount of the premium goes directly to the farmer.
For this reason, he said stakeholder engagement was underway to draft a charter binding the implementation of the US$400 LID in both countries, which document will be sent to Ghanaian and Ivorian legislative bodies for ratification.
Ghana and Ivory Coast are also creating a joint organisation to be mandated with monitoring the stick implementation of the LID and its subsequent payment to the millions of poverty-stricken cocoa farmers.
Contrary to speculations, the West African cocoa giants say several cocoa sales contracts for the 2020/21 crop running into thousands of tonnes have been secured at prices inclusive of the LID.
In June last year, a joint effort by the governments of Ghana and Ivory Coast paid off leading to a market acceptance of a historic cocoa floor price of $2,600 per tonne and a Living Income Differential of US$400 per tonne.
The development marked the first time producers of the commodity had a say in the international market price for their produce – cocoa – the chief ingredient for chocolate and other products.
Meanwhile, a Deputy Chief Executive of COCOBOD in charge of Operations, Dr Emmanuel Opoku, has emphasised that the Living Income Differential has come to stay, allaying fears against its sustainability.
Addressing participants at a SEND-Ghana organised National Stakeholder Dialogue on cocoa farmgate pricing and income of cocoa farmers, Dr Opoku entreated all buyers, processing companies, manufacturers, and brand companies to embrace it.