Brazil: Price embedded in the value of cocoa does not reap the expected results

Published 2021년 8월 13일

Tridge summary

Côte d'Ivoire's effort to pay its cocoa farmers a minimum wage through the Minimum Income Differential (LID) program has resulted in mixed outcomes. The initiative, which added an extra $400 per ton of cocoa exported, saw initial success in increasing farmers' earnings but faced challenges due to large international buyers reducing purchases to avoid the surcharge. The Covid pandemic further complicated the situation, leading to a reduction in the quality premium and effectively cancelling the surplus earned from the LID. The minimum price for mid-harvest harvest was ultimately reduced, reflecting the short-term nature of the price increase without the LID. The experience highlights the limitations of similar measures in protecting farmers from global market fluctuations.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Farmers in Côte d'Ivoire - the world's largest cocoa producing country - are getting paid less for their cocoa, despite the introduction of a payment aimed at guaranteeing them a minimum wage. Côte d'Ivoire, a West African nation, accounts for about 45% of world cocoa production, which generates export earnings of US$3.5 billion (CHF3.2 billion) per year. But the country's cocoa farmers earn just $0.78 a day, a third less than what the Fair Trade International organization calls the minimum wage - $2.51 a day. To address this, in 2019 Côte d'Ivoire (along with Ghana) decided to charge an extra $400 per ton of cocoa exported to places like Switzerland through a program called Minimum Income Differential (LID), which aims to increase participation. producers in profits and protect them from volatile prices. The new policy came into effect during the 2020/2021 cocoa harvest. The Ivory Coast Cocoa Council (Le Conseil du Café-Cacao) has set the minimum farm price for cocoa for its main ...

Source: Mercado Do Cacau