EU supports cocoa producers
Brussels, 23.09.2020 “The construction of the new industrial complex will allow the local processing of one million tons of cocoa against 650,000 tons today, the creation of jobs, the increase in State revenues and the strengthening of the economic growth of our country” Cote d’Ivoire President Alassane Ouattara said, at inauguration of the event. Cote d’Ivoire and Ghana account for almost two thirds of world cocoa output.
The cocoa producers also attracted attention of the EU, the biggest importer of the African cocoa beans, on average consuming almost a half of the produced amount. This week the European Commission has launched an initiative to improve sustainability in the cocoa sector. A new multi-stakeholder dialogue brings together representatives of Côte d’Ivoire and Ghana – the two main cocoa producing countries accounting for 70% of global cocoa production – as well as representatives of the European Parliament, EU Member States, cocoa growers and civil society. The dialogue aims to deliver concrete recommendations to advance sustainability across the cocoa supply chain through collective action and partnerships. The new dialogue will be supported by technical assistance for cocoa producing countries.
“The cocoa sector is important for the EU and our trading partners. Today’s launch of the multi-stakeholder dialogue for sustainable cocoa will help to guide the sector’s recovery from Covid-19, while also finding solutions to existing sustainability challenges. We plan to develop concrete recommendations on sustainable cocoa as trade is not only about growth and profits, but also the social and environmental impact of our policies,” executive Vice-President and acting Trade Commissioner Valdis Dombrovskis said.
“When we talk about cocoa, sustainability is key” said Jutta Urpilainen, Commissioner for International Partnerships. “Lifting up the three pillars of sustainable development in one go – social, economic and environmental – is possible. We stand ready to act as an honest broker to create the foundation of a new international framework for sustainable cocoa.”
A series of thematic groups set under the multi-stakeholder dialogue will meet between October 2020 and July 2021 to: discuss ways to encourage responsible practices of EU businesses involved in cocoa supply chains;
feed into other relevant ongoing Commission initiatives, including on due diligence and deforestation;
feed into the policy discussions between the EU and the involved cocoa producing countries: Côte d’Ivoire and Ghana; guide the European Commission in the design and deployment of support projects on sustainable cocoa production.
A plenary session in autumn 2021 will take stock of progress and a public report will review progress on the recommendations and lay out further steps to be taken.
The dialogue corresponds to the EU’s political priorities under the Green Deal and the Commission’s ‘zero tolerance’ approach to child labour. It also builds on Côte d’Ivoire and Ghana’s joint initiative of June 2019 on a minimum price for cocoa on the world market and the Living Income Differential that they put in place with representatives of the cocoa and chocolate industry to ensure decent revenue for local farmers.
The new initiative for sustainable cocoa is part of a broader set of the European Commission’s measures to address sustainability issues horizontally and within the sector. They include a policy dialogue with Côte d’Ivoire and Ghana to make sure that increase of prices is linked to actions halting deforestation and eliminating child labour in cocoa supply chains.
Côte d’Ivoire and Ghana are the world’s largest exporters of raw cocoa, generating some 60% of global exports (ITC 2020). Cocoa is a major contributor to export earnings, as well as the main source of livelihoods for up to six million farmers in Côte d’Ivoire and Ghana. Indirectly, cocoa contributes to the livelihoods of further 50 million people (UNCTAD 2016). At the same time, cocoa production entails particular risks relating to child labour, low revenues for local farmers, deforestation and forest degradation.
The European Union is the world’s largest importer of cocoa, accounting for 60% of world imports (ITC 2020). Côte d’Ivoire and Ghana are major suppliers of cocoa into the EU market, to which they have duty-free and quota-free access under their respective Economic Partnership Agreements.
Ivorian President Alassane Ouattara and his Ghanaian counterpart Nana Akufo-Addo signed the Abidjan Declaration back in 2018, thereby creating “an OPEC for cocoa”. Through this partnership, Côte d’Ivoire and Ghana – which together produce 65% of the world’s cocoa – will harmonise their sales policies to have greater impact and increase their earnings.
Back in July 2019, Côte d’Ivoire’s Coffee and Cocoa Board (CCC) and the Ghana Cocoa Board (COCOBOD) successfully imposed a pricing mechanism to help producers earn a living wage. Their suspension of forward sales of cocoa beans had such a negative impact on global prices that, in less than a month, chocolate traders and makers agreed to the idea of a $400 a tonne premium on all cocoa sales contracts.