Germany's Rewe Group has announced plans to launch a project that offers a Living Income Differential (LID) to cocoa farmers in West Africa, in addition to their respective Fairtrade premium and minimum prices.
The retailer has collaborated with Germany's Federal Ministry for Economic Cooperation and Development (BMZ) and Fairtrade on the project.
The payment of a higher cocoa price alone is often not enough to guarantee a living income for the farmers and their families, the retailer said.
Commencing autumn 2020, Rewe and Penny plan to sell various types of Fairtrade chocolate bars in order to make its supply chain completely traceable.
The project aims to improve the economic independence of farmers in the Fanteakwa cooperative, who will supply cocoa for these chocolates.
'Fair Supply Chains'
Germany's minister of economic cooperation and development, Gerd Müller, said, "The people at the beginning of our supply chains, in the developing countries, must be able to live from their work. It can no longer be that cocoa farmers often only get a pittance for their hard work.
"We need fair supply chains with living wages. That's why I'm delighted that the Rewe Group and Fairtrade are now making headway and securing real subsistence income for smallholder families. Such fair supply chains should become standard in all German supermarkets."
Other West African smallholder cooperatives will also be involved in the project, Rewe said in its statement.
Sustainable Farming Practices
The project will also focus on sustainable farming practices, efficient farm management and improving the management of cooperatives.
The initiative also aims to generate additional sources of income for farmers by encouraging them to grow other crops, such as cashew.
In July of this year, Ivory Coast and Ghana imposed a fixed Living Income Differential of $400 per tonne on all cocoa contracts sold by either country for the 2020/21 season.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: The European Supermarket Magazine.