American ice cream giant Ben & Jerry’s has announced that they are committing to paying a living income to cocoa farmers at the beginning of their supply chain in West Africa.
The move comes amid renewed scrutiny of the living and working conditions cocoa farmers face in the region, which produces 70 percent of the world’s cocoa.
Because farmers are typically paid according to fluctuating global commodity prices—and without factoring in production costs—most smallholder farmers live in extreme poverty.
But under Ben & Jerry’s new commitment, 5,000 farmers in the world’s largest cocoa producer, Côte d’Ivoire, will be given additional premiums to compensate for low wages—earning a so-called “living income differential.”
The premium consists of 600,000 USD, or the equivalent of around 120 USD in additional wages per farmer per year.
Ben & Jerry’s bold effort to change the cocoa industry’s treatment of farmers is supported by a partnership with Fairtrade America, who will assist the ice cream company in tracking financial flows to farmers.
“Smallholder cocoa farmers have virtually no control over global market prices and are at the mercy of price volatility,” according to a statement released by Ben & Jerry’s today. “Inequality in the cocoa chain means farmers are trapped in extreme poverty.”
Mary Linnell-Simmons, Director of Marketing & External Relations at Fairtrade, said, “The commodity price is not set with the livelihoods of farmers in mind. The commodity price in general contributes to many farmers around the world earning less than $2 per day and living in extreme poverty. The market maximizes profit at the end of the day, and farmers with least bargaining power are left behind.”
Cocoa supply chains have long been notoriously opaque and plagued by widespread exploitation, including forced labor and child labor, and companies have resisted making minimum payment commitments.
The low prices farmers receive for their labor has been linked to forced labor, malnutrition, and deforestation, and the industry is tainted by organized criminal activity—according to the African Union and the United Nations, cocoa is among the 10 largest illicit financial flows in the continent.
Experts and activists warn that even Ben & Jerry’s living income differential—while a welcome step in the right direction—is still lower than a true living wage.
Ben & Jerry’s Chief of Social Mission, Dave Rapaport, argued that the wage premium was one part of a diversified effort which will also include crop productivity, diversification, and working with local co-operatives among other long-term goals.
Last month, a report by independent research university NORC at the University of Chicago found that despite decades of promises by chocolate companies to reform, child labor in cocoa production has overall increased.
In advance of the report, Freedom United launched a campaign calling on chocolate companies to act now to end child slavery in their supply chains.
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Two questions: What spurred Ben and Jerry’s to make this payment and what is needed to spur other companies such as Nestle, Hershey’s, etc. to do the same? Why not develop standards protecting children who are working rather than try to end it if we are going to be realistic?