Cocoa farmers across Africa have raised fresh concerns over the effectiveness of the Living Income Differential (LID), questioning its ability to cushion the impact of falling global cocoa prices and improve farmer livelihoods.
The concerns were outlined in a statement signed by Comrade Adeola Adegoke, Global President of the Cocoa Farmers Alliance Association of Africa (COFAAA), and made available to AgroNigeria on Wednesday.
According to the association, the LID—introduced by Ghana and Côte d’Ivoire as a $400 per tonne premium to support farmer incomes—has not delivered the expected level of impact, despite being designed as a buffer against market volatility.
COFAAA acknowledged that the initiative remains commendable but noted that its benefits may not be fully reaching farmers at the grassroots level. This, the group said, could be due to limited access to information and implementation gaps within existing cocoa market systems.
“It is concerning that despite the sharp downturn in cocoa prices over the past year, the impact of the Living Income Differential has not been as strong as many had hoped,” the statement read.
The association explained that while the LID provides an additional $400 per tonne regardless of negotiated market prices, its effectiveness in improving farmer incomes appears uneven. It stressed the need to assess whether the mechanism can consistently deliver value under different market conditions.
COFAAA further questioned the long-term sustainability of the LID, asking whether it can serve as a reliable tool across varying economic cycles or if its impact depends on specific market dynamics.
While reaffirming support for the initiative, the group called on key institutions, including the Conseil du Café-Cacao, Ghana COCOBOD, and the Côte d’Ivoire, Ghana Cocoa Initiative—to provide clarity on the current status and future direction of the LID.
Such guidance, the association noted, would be critical for other cocoa-producing countries in Africa considering similar income-support frameworks.
The concerns come amid a broader downturn in global cocoa prices over the past year, which has affected farmers across major producing countries, including Nigeria, Cameroon, Uganda, and Sierra Leone.
Despite a price surge in 2024—when cocoa reached about $12,000 per metric tonne—COFAAA observed that many farmers, particularly in Ghana and Côte d’Ivoire, were unable to fully benefit due to regulated pricing systems.
The association noted that these systems, originally designed to protect farmers from price volatility, are increasingly being questioned as domestic prices continue to reflect fluctuations in the global market.
Beyond pricing challenges, COFAAA highlighted persistent structural issues affecting cocoa farmers, including low incomes, poor infrastructure, limited access to healthcare and education, and security threats such as illegal mining.
It also pointed to mounting pressures within the global chocolate market, where rising costs have affected sales and margins, particularly in Europe, while African farmers who sustain global cocoa production continue to face difficult living conditions.
“We understand that cocoa farmers are currently going through a difficult time due to the downturn in prices over the past year. No cocoa-producing country in Africa is immune from this situation,” the statement added.
COFAAA emphasized the need for a more balanced and sustainable pricing framework that supports both producers and international buyers while aligning with evolving global standards.
To address these challenges, the association announced plans to convene a Global Members Assembly and Empowerment Forum. The forum will bring together stakeholders across the cocoa value chain to review current developments and develop a unified continental position.
It is also expected to explore practical support measures, including improved access to farm inputs and safety nets aimed at cushioning the effects of price volatility.
According to the statement, public engagement for the initiative will begin on March 21, 2026, through a virtual session designed to encourage broader participation, strengthen collaboration, and advance a more sustainable future for Africa’s cocoa industry.
