VOICE Network calls on the industry
16 januari 2020
Living income is the starting point
We fully agree that living income is a human right and it’s an essential starting point, not the finish line. Current cocoa prices lead to structural poverty, which is the root cause of all problems like modern slavery and illegal child labor in the chocolate industry; therefore, paying a higher price is an important step to make it possible for farmers to realize a living income. But as you know, you need all five sourcing principles: traceable beans, higher price, invest in strong farmers, go for long term relationships, focus on better quality and improve productivity. To really change the system and make an impact, paying a higher price is not enough. No cherry-picking!
LIRP determined on target productivity
Although we do agree on most of the paper of VOICE, this is where our approaches differ. Where VOICE uses the current average productivity to calculate the price, Tony’s makes use of an achievable productivity target. Why? We realize it’s above the national averages, but in our supply chain, we see this target yield can be achieved. It is an essential part of professional cocoa farming. Paying the LIRP based on this target creates an incentive to improve: price is the best fertilizer. The reason farmers on average haven’t been able to reach this yield is a lack of incentive to invest, which is solved by paying the Living Income Reference Price. And organizing the support through the cooperative. According to VOICE, Tony’s does not pay enough to enable reaching a living income. But, if we apply this yield target to the VOICE calculation model, our payments exceed their reference. The LIRP should be an industry standard adopted by all companies to enable farmers to earn a living income.
So.. what needs to happen?
The bar should be raised for the whole industry, and every chocolate and cocoa company needs to take their responsibility and make a living income the norm. Every company can change its pricing policy today, right now, to make an impact. Chocolate companies need to step up their game and pay the Living Income Reference Price, too. Only together we’ll make all chocolate 100% slave free!
We fully agree that living income is a human right and it’s an essential starting point, not the finish line. Current cocoa prices lead to structural poverty, which is the root cause of all problems like modern slavery and illegal child labor in the chocolate industry; therefore, paying a higher price is an important step to make it possible for farmers to realize a living income. But as you know, you need all five sourcing principles: traceable beans, higher price, invest in strong farmers, go for long term relationships, focus on better quality and improve productivity. To really change the system and make an impact, paying a higher price is not enough. No cherry-picking!
LIRP determined on target productivity
Although we do agree on most of the paper of VOICE, this is where our approaches differ. Where VOICE uses the current average productivity to calculate the price, Tony’s makes use of an achievable productivity target. Why? We realize it’s above the national averages, but in our supply chain, we see this target yield can be achieved. It is an essential part of professional cocoa farming. Paying the LIRP based on this target creates an incentive to improve: price is the best fertilizer. The reason farmers on average haven’t been able to reach this yield is a lack of incentive to invest, which is solved by paying the Living Income Reference Price. And organizing the support through the cooperative. According to VOICE, Tony’s does not pay enough to enable reaching a living income. But, if we apply this yield target to the VOICE calculation model, our payments exceed their reference. The LIRP should be an industry standard adopted by all companies to enable farmers to earn a living income.
So.. what needs to happen?
The bar should be raised for the whole industry, and every chocolate and cocoa company needs to take their responsibility and make a living income the norm. Every company can change its pricing policy today, right now, to make an impact. Chocolate companies need to step up their game and pay the Living Income Reference Price, too. Only together we’ll make all chocolate 100% slave free!
