Last year, Mondelēz International and Wageningen University & Research (WUR), published a paper that explored how realizing a living income for cocoa farmers - an income that contributes to a decent standard of living for all members of a household - is a precondition for them to achieve important human rights. In that paper, No Silver Bullets, we outlined the scale of the living income challenge for cocoa farmers in Ghana and Côte d'Ivoire, which we estimated to be an annual income gap of 10 billion i.
As one of the world’s leading snacking companies and makers of many of the world’s beloved chocolate brands, Mondelēz International is determined to meaningfully improve the livelihoods of cocoa farmers. But within cocoa, there is no quick one-size-fits-all solution that can successfully and sustainably address the complex, interrelated challenges facing the cocoa communities we source from.
Today, in partnership with WUR, we publish a detailed paper, Balancing the Living Income Challenge, that shows why we must take a multi-actor approach for more farmers to reach a living income. We present specific actions different actors can take to make meaningful contributions to a healthy rural economy with the right conditions, so farming families are enabled to achieve and sustain living incomes.
Our analysis is data-led and evidence based, drawing on Mondelēz International’s nearly 10 years of on-the-ground experience through our cocoa sustainability program, Cocoa Life, WUR’s 10 plus years of research in the cocoa sector and an extensive body of literature sources.
Through our work, we highlight that in addition to low cocoa prices farmers often face limited economic opportunities beyond cocoa, there are no market policies to limit price volatility, and there is no aligned sector wide living income measurement system, which limits the collective transparency in the industry. To support these findings, we spoke with industry experts and have included contributions from leading actors including Fairtrade, the German Initiative for Sustainable Cocoa, IDH - The Sustainable Trade Initiative, the Sustainable Food Lab and Voice Network.
We have made progress, but more systemic change needs to happen to improve the lives of the 4.5 million cocoa farmers globally. We agree that all actors - from industry and governments to suppliers and investors - have the responsibility to work together to develop holistic solutions that address the root causes of the income challenges. And that a sustainable approach must not ignore the most vulnerable families who may never be able to earn a living income through cocoa alone.
In our paper, we detail how certain interventions will have a greater impact on some farming families than others over the long- and short-term and suggest a roadmap private sector actors can follow to understand where they can make the greatest contribution to tackling the living income challenge:
- Assess: analyze the different farming families you work with and whether they have the circumstances to earn a living income;
- Define & mobilize: understand the specific market dynamics you're operating under and set goals that are reflective of the organization's greatest strengths;
- Align & amplify: work with other actors to develop coordinated strategies and show others new ways of working jointly;
- Create & implement: identify which actions are most likely to create impact on the ground for different types of farmers, especially those that tackle underlying root causes of poverty;
- Measure, Report, & Improve: assess the impact of your actions and openly share successes, challenges and insights to strengthen multi-actor cooperation
At Mondelēz International, we’ve been walking this path nearly ten years through the Cocoa Life program, where we’ve committed 400 million $USD to drive positive change for 200,000 farmers in cocoa farming communities, measuring our impact and verify our supply chain along the way. We’ve seen improved cocoa farmers livelihoods by addressing root cause through targeted activities or income generating opportunities. In addition to paying program premium and the West African Living Income Differential. Yet we know that more action is needed. Going forward, we’re going to increase our focus on increasing incomes through programing tailored to different farmer segments and producing countries frameworks such as the African Regional Standard. We will continue to measure the income of cocoa farming families and collect data with independent partners such as Ipsos, Flocert, and WUR, and share our insights with the sector.
"We need to accelerate dialogue and action to create a sector-wide living incomes strategy. For us, this means that we will deepen long-term investment in Cocoa Life and continue to use our data and partnerships to help drive a balanced, data-driven debate involving multi-stakeholders leading to realistic solutions. As an industry, we need to create a data-driven, sector-wide accountability framework that considers progress and impact, and a market management strategy to address farmer economic resilience. Underpinned by a multi-stakeholder approach with like-minded changemakers and governments to address the broader poverty issue systemically."
Cathy Pieters, Senior Director Sustainable Ingredients & Cocoa Life, Mondelēz
"At Wageningen University & Research, we know we have an important role to play to make change happen for the millions of people working in agriculture who are currently not earning a living income or living wage. Through collaboration, we’re able to translate research findings into concrete meaning and recommendations, so partners and stakeholders can use it in their work to enable strategies built on traceable and robust evidence. To achieve this and take action, we need to continue discussions and create a shared understanding of the challenges farmers face, and find pathways for improvement together."
Yuca Waarts, Senior Researcher Sustainable Value Chains, Wageningen University & Research
Strengthening holistic approaches through collaboration within and beyond cocoa, is the only way we can respect the rights of all farming families so they can achieve a decent standard of living. I invite you to read the new paper here.
We hope by sharing these insights we can facilitate collaboration and stimulate action, so that we can come together to develop strategies to address the living income challenges.
i Calculated by focusing on enabling 75% of cocoa farming households, a clear majority, to reach a Living Income.