Ivory Coast and Ghana cancel cocoa sustainability schemes run by Hershey

Ivory Coast and Ghana are canceling all cocoa sustainability schemes that U.S.-based Hershey runs in their countries. Accusing the chocolate-makers of trying to avoid paying a cocoa premium aimed at combating farmer poverty.

In a letter addressed to Hershey, the Ivorian and Ghanaian cocoa regulators accuse Hershey of sourcing unusually large volumes of physical cocoa on the ICE futures exchange. Consequently avoiding the premium, known as a living income differential (LID).

Ivory Coast and Ghana – which produce two-thirds of the world’s cocoa, said they are also barring third party companies from running sustainability schemes in the West African nations on behalf of Hershey. The schemes certify cocoa as sustainably sourced – meaning its production is free of environmental and human rights abuses. For example, using child labor or being grown in a protected forest.

Hershey, on the other hand, said it is fully participating in the LID and will continue to do so. It sources substantial volumes of supply from West Africa, it added. “Our concern is that by cutting off industry sustainability programs, cocoa farmers will no longer receive the benefits provided by our programs… (like) the price premium for certified cocoa,” the company said in a statement.

The West African nations last year introduced a $400 a tonne LID on cocoa sales for the 2020/21 season. However, they have since struggled to sell their beans as chocolate demand has been hit by the coronavirus-induced recession.

Ivory Coast and Ghana also said they are reviewing their membership of the Federation of Cocoa Commerce (FCC). A UK-based international organization that aims to promote, protect, and regulate the cocoa trade.