Fairtrade International has announced the raising of its guaranteed minimum price for cocoa producers. It goes from $ 2,000 to $ 2,400 per metric ton at the point of export (FOB). The additional Fairtrade Premium is also raised by 20%. It will be $ 240 per metric ton instead of $ 200. Fairtrade organic cocoa will cost $ 300 more than the market price or the minimum fair trade price.
These increases follow the failure identified by the organisation itself: 77% of Fairtrade certified cocoa farmers in Côte d'Ivoire are below the poverty line.*
The new Fairtrade Minimum Price at FOB level would equate to approximately $1,600 per metric tonne at farm gate level in Côte d’Ivoire and is still below the Fairtrade Living Income Reference Prices of $2,668 per metric tonne of cocoa in Côte d’Ivoire and $2,300 in Ghana. Those LIRF prices are based on what the ISEAL Living Income Community of Practice has calculated to be needed in each country to support the average cocoa farming household’s basic costs for food, housing, clothing, health care, education plus a small provision for emergencies.
As mentioned by Fairtrade International : "The Living Income Reference Price should enable full-time cocoa farmers to earn a living income if implemented as part of a holistic strategy that also includes increased productivity and diversified crops".
* To find out more about the reasons for this setback and some ways to improve ethics in the sector, read the TDC article: "Fair trade struggles to lift cocoa farmers out of poverty in Ivory Coast"