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NIGERIA READY TO JOIN ‘COCOA OPEC’ AND LID SYSTEM

In 2019, Ghana and Côte d’Ivoire, which account for around 60% of global cocoa production, set up the Living Income Differential system (LID). The LID system aimed to boost the income of the poorest cocoa growers in the West African regions by charging a premium to the multi-billion dollar chocolate industry purchasing their beans.

It has now been reported that Nigeria could soon be on board with the LID system, a move that would add strength to cocoa producers, especially in the wake of the pandemic that saw cocoa prices lowered. However, the expansion of the LID’s reach is not set to stop in Nigeria, with other countries expected to join the system, further strengthening its authority.

Fuad Mohammed Abubakar, head of Ghana Cocoa Marketing Company UK Ltd, said, “Very soon we’re going to have Nigeria on board with the LID system, and increasingly other countries are going to join.” The matter is not yet confirmed; however, as The Nigerian Ministry of Agriculture is due to discuss with Ghana’s Cocoa Board next month, a point of focus is to ensure Nigeria adopts the LID system.

Abubakar also expressed his feelings towards the upcoming legislation set to be introduced by the European Union, which would require chocolate brands to guarantee that their supply chains are free from unsustainable practices contributing to deforestation. While he commended the proposition as being a step in the right direction, he questions why it has not been taken even further to include fair living wages for farmers.

The legislation is good because we do think companies should be responsible for these things, but how can you source ethical cocoa without paying ethical prices?

Fuad Mohammed Abubakar, head of Ghana Cocoa Marketing CompanY (CMC)

Low farmer pay has also been attributed as one of the major reasons for the prevalence of child labour in the industry. With better pay for their work, it is expected that farmers would not feel the need to recruit their children to assist with potentially dangerous farming activities. The UK Fairtrade Foundation reports that cocoa farmers earn an average of 6% of what consumers pay for their chocolate. Meanwhile, Ghana is having discussions with Dubai in the hope that they can expand into alternative markets to command a higher price for their beans.

With global affairs and weather conditions creating instability for cocoa farmers, the extra income could be the lifeline needed to support the industry’s farmers through these uncertain times. 

Photo from: Nestlé | Flickr

https://news.yahoo.com/cocoa-opec-could-bigger-nigeria-133446344.html

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