Hershey’s and Mars Avoid Paying African Cocoa Farmers Living Income Differential

Ghana and Ivory Coast are the two largest source countries for cocoa. The cocoa farmers in these countries produce two-thirds of the world’s cocoa which helps sustain their nation’s economies. U.S. confectionaries Hershey’s and Mars are accused of taking advantage of poor farmers in these countries by failing to pay a negotiated bonus meant to improve their economic condition. Face2FaceAfrica.com reports that the Ghana Cocoa Board (Cocobod) and Coffee Cocoa Council (CCC) recently wrote a letter accusing Hershey’s and Mars of failure to pay the living income differentials (LID).

Under arrangements of the LID cocoa farmers were suppose to receive $400 bonus per tonne. The $400 tonne cocoa sales supplement was introduced last year for the 2020/2021 season. According to Face2FaceAfrica.com the $400 tonne bonus was to be paid in addition to the market price as a means of ensuring poverty stricken farmers a living income. The GCC and Cocobod letter revealed that Hershey recently engaged in a large purchase of cocoa on the US Future’s Market. According to TheLosAngelesTimes.com, Mars was also accused of changing its buying patterns.

Hershey’s purchase was evidence the company was “squeezing the market” to avoid paying the GCC and Cocobod the living differential income bonus. The Ghana Cocoa Board and Coffee Cocoa Council producers letter “denounced” Hershey’s and Mars citing their “breach of confidence” schemes. Such schemes involved Hershey’s and Mars certification that their companies chocolate is ethically sourced, free of child labor and not destructive to the environment.

Hershey and Mars are U.S. producers of Hershey’s chocolate bars, Hershey’s Kisses, Kit Kat and Reese’s peanut butter cup. They are the two largest confectionaires in the world, “with a global supply chain worth more than $100 billion”, GCC and Cocobod farmers received “in 2018 only about 5.5 percent”, according to a Bloomberg report.


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