As a global food company, at Mars we take great pride in the quality of our products. Our commitment to quality means working hard to understand the needs of our consumers, and ensuring our products, including cocoa, are made under sustainable and socially responsible conditions. For us this means being a trusted partner for the benefit of the families and individuals in cocoa farming communities, investing in their success and wellbeing, and striving to positively impact the environment in which we operate.
Unfortunately, ‘sustainable cocoa’ is easier said than done. From planting the first seedlings, to growing healthy plants, harvesting, and selling the produce on the market, cocoa growing is riddled with structural barriers, which make it extremely difficult for farmers to earn a consistent living income for themselves and their families.
Poverty is a complex, unjust phenomenon. To date, many efforts to lift smallholder farmers out of poverty in cocoa supply chains have failed. A surcharge on cocoa exports paid by corporations in the chocolate-producing industry — known as the Living Income Differential (LID) — is a start, and Mars supports the initiative to increase farmer prices spearheaded by Ghana and Côte d’Ivoire.
But while higher wholesale prices are a part of the equation, in isolation they have proven insufficient to improve farmer incomes, demonstrating pricing alone is not enough to transition farmers to a more sustainable income situation. It has helped patch up short-term earnings shortfalls but does not remove the underlying root causes of why farmers face poverty in the first place: factors such as low land productivity and small farm sizes, the exclusion of women and girls from financial decisions, or continuous oversupply, which artificially deflates prices. Export surcharges such as the LID are commendable and deserve our support, but they do not break the logic of an inherently flawed system that does not prioritize the needs of farm workers.
From ‘living’ to ‘thriving’
We believe it is time to take a radically different approach to farmer livelihoods by changing the ways cocoa farmers generate income. We need a systemic rethink that improves farming practices, incentivizes keeping children in schools instead of fields, ensures farmers have access to the resources, stimulate sustainable pest and disease control methods, and tools to diversify their crops to become less impacted by cyclical income.
‘Thriving’ means putting farmers on a footing of permanent, self-sustained growth. It means unleashing their entrepreneurial potential — enable them to be ‘agripreneurs’, who have the ability to grow, invest and diversify their business. ‘Agripreneurship’ means preserving and living in harmony with the natural and social capital, removing the forces that push farmers to deplete it, and being able to pass it on to the next generation.
Such systemic change will require a combination of measures including land reform, women’s empowerment, crop diversification, supply chain management measures, or farmers’ access to micro-finance. This will take time and can only be possible if all actors — governments, cocoa farmers, sustainability certification organizations and chocolate producers — work together towards the same goals.
It also requires the muscle of the EU, which as the world’s largest importer of cocoa, has a unique ability for dialogue and agenda-setting. Having invested €25 million into support to West Africa, the European Commission has signaled the importance of the transition of the sector.
Price regulation should be part of a whole toolbox of measures. Through the EU Alliance on Sustainable Cocoa, the Commission has developed an excellent forum to commit all stakeholders to the search for new solutions. The markets and price working group has the potential to become the natural birthplace for fresh thinking in our sector. Any functioning market relies on the interplay of three variables — price, supply and demand — and improving the existing pricing framework cannot be successful without examining the other. The success of the working group will be determined by its ability to propose solutions, which go beyond one-sided top-down regulations, which have been tried and tested — but ultimately failed.
To successfully improve livelihoods and develop new living income guarantees, collaboration between all actors in the cocoa supply chain is vital. All have roles to play in catalyzing and advancing smallholder based agricultural transformation. We at Mars urge the EU’s Alliance on Sustainable Cocoa to use its incredible convening power to bring both origin governments and business around the table to help create a holistic, systemic solution to farmer livelihoods. We would like to see the EU play an ‘honest broker’ role so that together with governments, we can build on the work of the Market and Price Working Group and bring about a more sustainable future for cocoa farmers and their communities.