2022 Living Income Compendium Recommendations

Joint Actions

Ensure gender equality in living income approaches

All living income strategies need to be designed with gender specific interventions in place, otherwise they can contribute to further inequality gaps between men and women. Strategies need to be developed how to redistribute part of the benefits from cocoa farming to the women and how to strengthen their access to rights and inclusion.

Strengthen the capacity of farming communities

The capacity of farming communities should be supported and enabled to self-organise to have a bigger voice.

Spread payments over the year

Systems should be developed that make it possible to distribute the income of producers over the year, thereby reducing the vulnerability in the lean months.

Spread payments through community

Methods need to be developed to ensure that extra price payments are redistributed throughout the community, so they can help the most vulnerable, such as women.

Companies

Develop time-bound living income action plans

Company sustainability programmes should not consider a living income for farmers to be an unattainable ideal but should all develop time-bound action plans that make a living income achievable for all suppliers in their value chain. These time-bound action plan should include purchasing practices – explicitly addressing farm gate pricing. Every cocoa and chocolate company should set up a guaranteed living income minimum price.

Make available labour part of living income calculations

Any claims that poverty is being tackled through increased productivity should be accompanied by robust calculations on the impact of these productivity increases – including transparency on increased production costs, both for labour and resources.

Ensure a business case for higher yields

Without remunerative pricing and available and affordable credit, there is no business case for higher yields. Companies should ensure the prices they pay to farmers are incentivising for them to want to invest time and inputs in their farms.

Long-term and asymmetric contracts with farmers

Corporations should engage long-term contracts with their suppliers, defining specifically the long-term purchasing responsibilities of the company and selling rights of the farmer/cooperative, so that sellers are less at risk from one season to the next. 

Review business functions

Beyond procurement practices, companies need to critically review business functions and resource streams such as shareholder pay-outs, stock buybacks, tax avoidance/evasion practices, and marketing expenditures. As long as a significant part of their first suppliers are living well below a living income, any such individual enrichment practices are entirely immoral.

Consuming Governments

Enshrine Living Income in Due Diligence regulations

Living income should be enshrined as a fundamental human right in legislation. Due Diligence Regulations must include Living Income as a key criterium, requiring the development and implementation of time-bound action plans.

Make available significant funds

Governments in consuming countries, international organisations, and donors need to make available significant funds to tackle farmer poverty.

Regulate terminal markets

Speculation on the terminal markets should be regulated to limit speculation off the back of farmer poverty.

Increase transparency

Governments in producing and importing countries need significantly increased transparency and accountability of how public funds are collected and directed to support a transformation in the cocoa sector.

Producing Governments

Introduce supply management solutions

It is a matter of high urgency that the cocoa producing countries start acknowledging that supply management solutions   are part and parcel of any successful living income policy. As a global issue, governments should align on common strategies to ensure transparent policies that put farmers first.

Rural and agricultural development strategies

These strategies should be firmly embedded in national rural and agricultural development strategies in cocoa producing countries  that focus on both food sovereignty as well as on rural infrastructure  .

Increase transparency

Governments in producing and importing countries need significantly increased transparency and accountability of how public funds – including the LID – are collected and directed to support a transformation in the cocoa sector. Supply chain transparency is also an essential part of this.