Ghana and Ivory Coast, the world’s largest producers of cocoa which produces two-thirds of the world’s cocoa, have decided to cancel all cocoa sustainability schemes that Hershey, a U.S based chocolate manufacturer, runs in their countries.
Both Ghana and Ivory Coast are accusing the chocolate manufacturer of trying to avoid paying a cocoa premium ( $400 a tonne Living Income Differential) aimed at combating poverty amongst cocoa farmers. Hence the decision to cancel cocoa sustainability schemes run by Hershey in the two countries.
According to a report by Reuters, the Ivorian and Ghanaian cocoa regulators accused Hershey of sourcing unusually large volumes of physical cocoa on the Intercontinental Exchange (ICE) to avoid paying the Living Income Differential (LID).
The cocoa sustainability schemes run by Hershey’s include the ViVi School Feeding and Child Labour Monitoring. These schemes are run to certify their (Hershey) cocoa is sustainably sourced. That is, its cocoa imports and chocolate production is free of environmental and human rights abuses like the use of child labour.
The benefit of this is that it allows Hershey to market their chocolate as having been produced on ethical grounds and can thus charge a premium for it. Canceling the schemes jeopardizes that ethical integrity and premium charge.
Hershey on the other hand said it was fully participating in the LID and will continue to do so.
“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.
Further reports by Reuters, also reveal that both Ghana and Ivory Coast had withdrawn from the Cocoa Merchants Association of America (CMAA), for helping companies such as Hershey from paying the LID.
The Cocoa Merchants Association of America (CMAA) is
“condoning and conniving with American companies against poor West African cocoa farmers”, the report revealed.
Hershey is the maker of such popular chocolate products as Hershey chocolate bars, Hershey’s Kisses, and Kit Kat.