WHY GHANA & IVORY COAST SHOULD EXIT FEDERATION OF COCOA COMMERCE PERMANENTLY

We recently heard of Ghana and Ivory Coast allegedly noticing Hershey's invasion of the $400/t Living Income Differential agreed by the industry to pay to help improve cocoa farmers’ livelihoods. This realisation led to both countries cancelling the sustainability schemes run by Hershey's, leaving the Cocoa Merchants Association of America and are currently reviewing their membership with the Federation of Cocoa Commerce in the United Kingdom.

(In my critique of Fairtrade, we spoke about the hidden dangers of these sustainability programmes and how counterproductive they are on the livelihoods of cocoa farmers).

In this article, I would like to help Ghana and Ivory Coast with arguments on why leaving the FCC is the only way for both countries to take control of the sector as expected.

What is the Federation of Cocoa Commerce "FCC"?

The FCC is a merger of the 1929 Cocoa Association of London (CAL) and the 1935's Association of Francaise du Commerce des Cacaos (AFCC). The FCC aims to create a commercial trading framework of cocoa and its related derivatives and services for its members. This means any company that joins the FCC must have its buyers or suppliers of cocoa as part of FCC. The FCC through its Contracts and regulations committee develops, and reviews sales/supply agreements used by its members in trading with each other. It also has its arbitration and appeals committee which handles disagreements/ reported breaches that arise between members in their utilization of any of FCC's contracts. Members of the FCC are usually individual companies, regulators, associations, etc.

Almost all the regulators and traders of Ghana and Ivory Coast's cocoa beans are members of FCC, which means until you join FCC you can’t buy cocoa beans in Ghana. That is the power FCC holds now.

Why is Ghana's association with FCC Problematic?