LIVING INCOME campaigner BRIEFING - choose fairtrade - Fairtrade Foundation
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LIVING INCOME
campaigner BRIEFING
ion.
’t Feed Exploitat
Do n irtrade.
choose fa
1
Living income: A human right What is a living income?
Understanding of, and support for, rights that everyone, everywhere A living wage is a salary paid by an but undertake activities like farming to
a living wage is spreading rapidly in should be able to enjoy to lead a employer to a worker that covers a sell their produce to earn a livelihood.
the UK. It is being implemented by dignified life. basic standard of living. A living income It is calculated as the net annual
employers who want to show that they is the same idea, but applies to people income needed to afford a decent
are paying their staff fairly. The Declaration covered education, – like smallholder cocoa farmers – who standard of living for all members
freedom of opinion and expression, don’t earn a salary from an employer, of that household to:
The terms living income and living the right to a nationality and many
wage may be relatively new, but the other things we take for granted.
idea behind them is not. Seventy Many gradually made it into the
years ago, the Universal Declaration law too, in some countries at least.
of Human Rights set out many basic
Eat nutritiously Send children
throughout to school
Everyone who works has the right the year
to just and favourable remuneration
ensuring for himself and his family Live in a
Drink safe water
an existence worthy of human dignity, decent home
and supplemented, if necessary, by
other means of social protection. Save for
Access unexpected
Article 23 (c) Universal Declaration of Human Rights,
December 1948 healthcare setbacks
Allow older people
to retire with dignity
This is after deducting the costs of earning that income, including fertiliser, fuel and labour.
2 3
Crisis in cocoa Over 60% of $2.50 a day would
Farmers of many crops live under the for over 60 percent of world production
the world’s Cocoa PROVIDE a living income
poverty line, and aren’t able to earn between them, and rely a lot as nations is grown for a typical cocoa
a living income. As we start our new
campaign for living incomes, there are
on the income. High levels of poverty
affect small-scale farmers and their in ghana farmer in Côte d’Ivoire
numerous reasons why we’re focusing
on cocoa as an example of the gap
families in these countries, preventing
them from accessing basic human
and Côte cocoa
between actual and living incomes rights. Fairtrade is playing a leading D’Ivoire
for farmers. role in calculating what living income
should be for farmers of various crops
There’s a high concentration of cocoa and putting in place strategies to close
production in two countries: Ghana and the gap. The most progress has been
Côte d’Ivoire. Together, they account made in cocoa.
The UK chocolate Less than $1
industry is worth a day is the current
Cocoa prices
£4 billion £
£
income of a typical
each year cocoa farmer in
are disastrous.
£
When a farmer £ Côte d’Ivoire
gets up in
the morning, Price crash
he is always In Ghana and Côte d’Ivoire, the price The world market price for cocoa
worried: how a farmer receives per kilo of cocoa
produced is set by the government,
crashed in 2016, pushing many farmers
deeper into poverty, and creating an
will he be able but follows from the world market even more urgent situation for millions
price set in New York and London. of families relying on cocoa production.
to feed and
take care of
his family? How
can he send
his children
fairtrade minimum price
to school?
Ebrottie Tanoh Florentin,
cocoa farmer, Côte d’Ivoire
4 2013 2017 5
Fairtrade: A safety net
Fairtrade can help protect farmers from The Fairtrade Premium is typically
market volatility and extreme poverty spent in strengthening co-operatives
prices through the safety net of the to be able to support and train their
Fairtrade Minimum Price, and the members and sell their cocoa. It’s also
Fairtrade Premium money that goes used for much-needed investment
directly to the farmers’ co-operatives in the community – for example
and their communities. to provide education, clean water,
healthcare and housing. It is also
When selling on Fairtrade terms, used to strategically invest in farm
farmers will receive the market price inputs like fertiliser, to reduce costs of
and Premium of $200 a tonne on production for farmers, and on income
top, increasing to $240 a tonne from diversification projects, so that farmers
October 2019 due to the Fairtrade Price aren’t so reliant on cocoa.
review. This is an amount unmatched
by other certification labels, many of However, only a fraction of cocoa
whom have historically not required leaving West Africa is currently certified
the payment of a premium to farmer as Fairtrade, so there’s a huge amount
organisations at all. Meanwhile, the we can achieve by increasing sales of
Minimum Price will be increasing from Fairtrade cocoa.
$2,000 to $2,400 a tonne, meaning a
better deal for cocoa farmers.
6 7
A holistic approach is needed
Although an essential first step, just improvements, and having many
increasing Fairtrade sales won’t achieve household members to support.
living incomes for all farmers. The price And that is before we even consider
cocoa farmers receive is too low to the impact of a changing climate,
allow them to access their fundamental which is reducing production levels
human rights, and it must increase for for farmers whether certified or not.
any notion of sustainability in cocoa to
be achieved. But just increasing prices Income diversification is a critical step
doesn’t do enough to reach the farmers in working towards living incomes too,
most in need, or to close the large gap so that farming households are less
between current and living incomes. reliant on the volatile and unfair
cocoa market.
There are other factors which limit
a farmer’s ability to achieve a living Building on the achievements of
income. These are usually having a Fairtrade certification, we need to
small farm size, a lack of access to encourage others to do more to
training and funds to invest in farm change the cocoa sector…
The minimum price is one of the advantages
of the Fairtrade label compared to other
labels… when the market price falls, we
automatically use the minimum price. This
allows the producers to keep farming and
even to improve the production.
Ebrottie Tanoh Florentin,
cocoa farmer, Côte d’Ivoire
8 9She deserves a living income The value chain
A part of the solution is to look at way to become more independent. Fairtrade certification is changing to bring about in the cocoa sector
the special role women can play in She first sold her cocoa as Fairtrade boost farmer incomes even more, outside of certification. Only working
achieving living incomes for cocoa in 2016. Having received training in but it’s not the whole solution. together, with governments, chocolate
farming households. quality and good agricultural practices Our research into what has been companies and retailers all making the
from her co-operative, her production achieved through Fairtrade reveals commitments and policies necessary,
It’s harder for cocoa-farming increased by 50 percent in one year, some of the changes we need to can we make it happen.
households headed by women, boosting her income.
who typically receive less income
than equivalent households headed Rosine is also the secretary of the
by men. Yet we know from years
of studies that directing more
women’s society of her co-operative.
Rosine and 400 other women in
Producer organisations
independent income into the hands the group have invested Fairtrade Producer organisations are incredibly organisations are able to sell enough on
of women accelerates the rate of Premium in a variety of income important in advancing the interests of Fairtrade terms, it can be transformative
development for the whole community. diversification projects, mainly growing smallholder cocoa farmers. By uniting for their members. Each Fairtrade
other food crops, including cassava individual farmers in co-operatives, they purchase strengthens producer
Rosine Bekoin is a mum of five, and and peppers, and raising chickens. are in a stronger position to access organisations, but further support and
a member of CAYAT co-operative in This provides an independent income markets, training and support needed funding can be targeted to increase
Côte d’Ivoire. She used to sell her that supplements the income from to improve incomes. When producer their capacities too.
cocoa to local middlemen, but heard cocoa so they can meet important
about Fairtrade at a meeting in her costs they face all year round, like
village, and thought it could be a paying for school.
Government (producer/exporter)
Fairtrade Premium encourages us, Producer country governments have competing priorities for investment in
as women cocoa farmers, to be able a strong role to play, especially in
Côte d’Ivoire and Ghana, where the
their countries. A higher cocoa price
is critical to allow them to set higher
to achieve certain things. We know governments set the price cocoa prices paid to farmers, and provide the
that with Fairtrade there is a Premium farmers receive. Cocoa is a really
important part of national export
much-needed investment in social and
economic development.
waiting for us, and for each woman, earnings, and there are many
you can do what is in your heart.
Rosine Bekoim, cocoa farmer, Côte d’Ivoire
That’s not all – CAYAT have built school classrooms to allow children
to get an education, who otherwise would have to join their mothers at
work during the day. They have also built a hardware store to provide
affordable building supplies and much more. You can read more about
CAYAT, and farmers like Rosine, at fairtrade.org.uk/fortnight Smallholder co-operatives government
Farmers (Exporting country)
10 11trader/grinder manufacturer retail
COMPANIES TRADERS
The cocoa industry is characterised by The experience of the past few years A small number of cocoa traders have percent of the worldwide cocoa
a relatively small number of huge global shows that despite intention and significant influence within the cocoa trade. We would like to encourage
companies which produce chocolate investment, a change of focus is market, which means cocoa farmers traders to engage in conversations
and other products. There’s a high needed – one that puts achieving living have very few options for who to and align with progressive companies
degree of consensus that current farmer incomes at the heart of all initiatives, far sell their cocoa to. Eight traders and also engaged in working towards
livelihoods are unsustainable, however, beyond just increasing productivity, and grinders control approximately 75 living incomes.
given the tough market and economic maintaining security of cocoa supply.
conditions of increasing costs and
consumer push for value, many find Only with living incomes being paid to
it difficult to voluntarily increase the farmers can any cocoa be considered
price they pay for cocoa versus their sustainable.
competitors, especially when the world
market price plummets. Fairtrade is looking to work with a few
companies that are showing ambition to
Combined, the biggest chocolate pilot additional targeted ways to ensure
manufacturers and traders have cocoa farmers reach a living income –
pledged billions of dollars to to set examples that can be replicated
sustainability initiatives over the past by the industry at large.
decade. Some have committed to
sourcing 100 percent sustainable
cocoa. Others implement projects with
farmers to boost yields and productivity.
Recommendation of the World Cocoa Forum (WCF),
based on the feedback of 1,500 delegates, Berlin, April 2018
We affirm that the cocoa sector will not be The lack of transparency and complexity in supply chains makes it
notoriously difficult to know the costs of processing cocoa, manufacturing
sustainable if farmers are not able to earn a chocolate and retailing. However, during the price crash of 2016-17, as the
incomes of many cocoa farmers tumbled, a similar pattern wasn’t observed
living income… All stakeholders should develop in the profits of other major players in the supply chain. Therefore cocoa
and implement policies that enable cocoa farmers farmers seem to bear the risk of a volatile market, despite being the least
equipped to deal with the effects.
to make a living income.
12 13government
(Importing country)
Governments in chocolate What can I do?
importing countries
consumer
Whatever happens with Brexit, it’s Leads the way: Support a global
crucial the UK plays a positive role initiative of governments and
in the international community and business to reach living incomes in
plays its part in supporting the world’s supply chains, starting with cocoa.
poorest people to escape poverty. Promising initiatives are being
We’re a nation of chocolate lovers, developed by the Belgian and Buy Fairtrade Make a noise
and we’d like the UK government to German governments that the UK
help ensure cocoa farmers get a living could get involved with. …and encourage others to do the same. Talk about cocoa farmers. To create the
income for their cocoa. change needed, chocolate companies
Makes living incomes a priority You’re not only ensuring a better deal need to see that their customers care
That’s why we’re asking you to help for UK aid: Support programmes for farmers, you’re showing there about cocoa farmers, and feel poverty
rally people to sign our petition to the and businesses that take living is demand for chocolate made by prices are unacceptable.
Prime Minister, to make sure our trade income seriously. We’d like to see companies doing business differently.
with developing countries puts poverty the Department for International Help us build the movement by talking,
reduction first, delivering living incomes Development support farmers sharing and encouraging others to
for all, especially women. in West Africa to invest in their join us too. Supporting local Fairtrade
farms and improve their farming Be political events and talking about Fairtrade on
We want the UK government to techniques. social media keeps it on the agenda.
support our commitment to a living Sign our petition in 2019, and keep
income and ensure it: Incorporates living income into Fairtrade on the agenda with your MP.
the government’s Business and
Human Rights policies: Our living income petition launched in stay in touch
Recognise that fair prices are Fairtrade Fortnight 2019 sets out some
central to delivering human of the ways we’d like to see the UK This isn’t something we will be able to
rights in supply chains. government incentivise better prices achieve in one Fairtrade Fortnight or
paid to farmers. with one petition. Look out for more
news and ways you can support the
campaign in the coming years. Sign up
for campaign news, and find out more
information at fairtrade.org.uk
14 15fairtrade.org.uk
Fairtrade Foundation
5.7 The Loom
14 Gower’s Walk
London E1 8PY
Tel: +44 (0)20 7405 5942
Email: mail@fairtrade.org.uk
Registered charity no. 1043886
A company limited by guarantee,
registered in England and Wales no. 2733136
This briefing was published in December 2018.
Farmer income statistics were calculated based
on the daily income needed per member of a
typical cocoa farming household, from the best
available research at the time of printing.
Photography credits: Peter Caton
Front cover image: Salimata Diakite,
cocoa farmer and member of SCAANIAS
co-operative, Côte d’Ivoire
This publication was produced with the
financial support of the European Union.
Its contents are the sole responsibility
of the Fairtrade Foundation and do not
necessarily reflect the views of the
European Union.
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