Officials of Ghana Cocoa Board (COCOBOD) and Côte d’Ivoire’s Conseil Cafe Cacao (CCC) are locked in a crunch meeting in the Ghanaian capital, Accra, over the implementation of the Living Income Differential (LID) for their cocoa farmers.
The LID is a US$400 per tonne fee on cocoa from Ghana and Côte d’Ivoire, the world’s top two cocoa producers, and accepted by global cocoa and chocolate companies in June 2019 to tackle pervasive farmer poverty.
The opening of the 2020/21 cocoa season last October heralded the implementation of the LID.
MIDTERM LID REVIEW
Cocoa Post sources say the 6 May 2021 Accra meeting is a “mid-term review of the 1st year of the LID” and is said to focus primarily on “implementation” so far and also look into the “LID going forward”.
Sub-committee are expected to present reports on the impact of the intervention especially on the millions of beneficiary cocoa farmers.
Critics say the LID implementation has been fraught with communication challenges, as there is low or no awareness among global consumers of chocolate and cocoa products on the relevance of that special poverty intervention levy.
Other issues coming up strongly for discussion at the day’s meeting are the uncoordinated farmgate or producer price of cocoa in the two neighbouring West African countries and its implications on the LID.
LID IMPLEMENTATION TAKE OFF
Effective October 1, this year, Ghana Cocoa Board (COCOBOD) began the purchase of cocoa beans from farmers with the US$400 Living Income Differential (LID) added to their payments.
The successful addition of the LID raised the farmgate price of cocoa by a historic 28% in Ghana to GHS660, occasioning applause by farmers and Cocoa CSOs to the government who welcomed the move.
To ensure further commitment to maintaining the direct payment of all proceeds of the US$400 LID directly to cocoa farmers in the two countries have sealed it by legislation in both countries.
The first Executive Director of the permanent secretariat of the Côte d’Ivoire-Ghana Initiative in Accra has also been appointed in the person of Ivorian Alex Arnaud Assanvo, a former director of Corporate Affairs for Europe and Africa at Mars Inc. in Switzerland.
CHOCOLATE GIANTS AVOIDING LID?
Last year, Ghana’s Cocoa Marketing Company said it been selling hundreds of thousands of tonnes of cocoa beans for the 2020/21 season with prices that included the new US$400 per tonne LID.
Sources say a majority of the 2020/21 crop in both Ghana and Côte d’Ivoire has been sold with LID.
However, there has been some internal and external bottlenecks with the implementation of the Living Income Differential.
Earlier, in November 2020 duo made the global headlines when they temporarily cancelled within their jurisdiction the sustainability program of American chocolate giant Hersheys for allegedly sourcing cocoa without paying the LID.
In Côte d’Ivoire, a production surplus amid slow sales occasioned by the COVID19 pandemic has forced a cut to the producer price, as reported by the International Cocoa Organisation (ICCO).
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