New farmgate prices not enough, says Tony’s

October 12, 2023

Tony’s Chocolonely has warned that the Living Income Reference Price (LIRP) paid to cocoa farmers to move farmers out of poverty and pay a living income has still not been met by businesses. As local governments have increased the farmgate price by 47% in Ghana and 20% in Côte d’Ivoire, Tony’s will source cocoa through Tony’s Open Chain which will pay 18% on top of the national price in Ghana and 44% on top of the price in Côte d’Ivoire. They are joined by companies including Pleese, Huel, Ben & Jerry’s and ALDI.

Ghana and Côte d’Ivoire, which make up 60% of the world’s cocoa is where Tony’s has continued to source its cocoa, is plagued by issues relating to exploitation, child labour and deforestation in the cocoa supply chain. To protect farmers from crippling low prices, national governments have tried to guarantee a fairer price for cocoa by setting the farmgate price every season. This year, the price increases from $1225 to $1804 per metric ton in Ghana and from $1,344 to $1,612 per metric ton in Côte d’Ivoire; representing a 47% and 20% hike, respectively.

Current cocoa production and market dynamics have increased the farmgate prices for the 2023/2024 crop season. Tony’s warns that, although the rise in prices is a positive sign, it is still not met. The LIRP, which was reportedly developed by Fairtrade with the company’s support, is significantly higher than the national prices for cocoa; an additional $316 per metric ton in Ghana (+18% on top of the farmgate price) and an extra $714 in Côte d’Ivoire (+44% on top of the farmgate price).

“While we believe that the farmgate price increase of cocoa in Ghana and Côte d’Ivoire is a step in the right direction, it’s crucial to recognise that it isn’t enough,” commented Joke Aerts, Credible Scaling Lead at Tony’s Open Chain. “Paying the Living Income Reference Price for cocoa is a core driver to enable farmers to earn a living income. Tony’s Open Chain invite companies to commit to paying the LIRP. A higher price for cocoa should become the industry norm. Together with our Mission Allies, we will keep working towards a future where farmers receive fair compensation.”

Tony’s Open Chain follows Tony’s 5 Sourcing Principles – part of which includes paying a higher price for cocoa for a long period of time, beyond a season. Huel, Pleese and Dutch department store Hema represent the most recent companies joining Ben & Jerry’s and ALDI.

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