Côte d’Ivoire: Validating the Living Income Benchmark for cocoa growing regions
On September 13th 2018, leaders from across Côte d’Ivoire’s cocoa sector came together with the global chocolate industry in Abidjan to provide feedback on the draft Living Income benchmark study for the country’s cocoa growing regions. The Living Income Community of Practice hosted the workshop which focused on the methodology and results of the benchmarking exercise and its comparison with actual incomes. Also discussed were the implications of the study outcomes and next steps for smallholder income improvement.
Mr Mian Amoakon moderated the workshop, and opening addresses were provided by Ivorian government ministry representatives: Mr Traoré Drissa, Ministère de l'Agriculture et du Développement Rural (MINADER) and Dr Mamadou Gbongue, Conseil du Café-Cacao; who both stated that they were thankful for the work and highly anticipated the results for directing future activities. Adam Romo, ISEAL Alliance, and Friederike Martin, GIZ, then provided an introduction to the concept of Living Income, the Living Income community of practice and the community of practices living income pilot research which also includes a benchmark for Ghanaian cocoa growing regions.
‘This living income benchmark, and its comparison with the current situation for cocoa farmers…will allow us to really understand, and account for, the realities of these households. The Counseil du Café-Cacao is expecting to use the outcomes to fine-tune the interventions currently being implemented by the Ivorian Government’ - Dr Mamadou Gbongue, Conseil du Cafè-Cacao
The Côte d’Ivoire Living Income Benchmark study, and the parallel study being conducted in Ghana, intend to: 1) create credible, robust costs of a decent living assessments for the critical cocoa growing regions of both countries and 2) contribute to the learning about how to calculate and use a living income benchmark for smallholder farmers.
The research team from the Ivorian research institute CIRES for the Côte d’Ivoire study was composed of Dr Ibrahim Diarra, Dr Yapo N’Guessan and enumerators. Michelle Bhattacharyya (Global Living Wage Coalition) and Dr. Levison Chiwala (University of Malawi) provided technical backstopping. The study followed the Anker methodology, and fieldwork was completed over the summer of 2018 in nine cocoa districts: Sud Comoé, Indénié-Djubin, Mé, Agnéby-Tiassa, Gôh, Lôh-Djiboua, Nawa, San Pédro and Tonkpi.
The research results were presented in the workshop by CIRES director, Dr Ibrahim Diarra, and Dr N’Guessan. The opportunity was given for the various stakeholders in the room to comment. This allowed concerns to be raised which would be addressed in the final report and also began a conversation around the implications of the benchmark.
The cost of a basic but decent standard of living calculated in the study is CFA 262,056/month (USD$454/mo) for a family of six (2 adults and 4 children).
HOW DO WE COMPARE ACTUAL INCOMES WITH THE BENCHMARK?
Following the presentation and discussion of the benchmark results, Dr Marcelo Tyszler from the Royal Tropical Institute (KIT) presented an initial comparison between the newly formed benchmark and existing incomes in the regions. The existing (or actual) incomes used for this assessment were identified through KIT’s ‘Demystifying the Cocoa Sector’ research (full report forthcoming), which used a large survey sample and household self-reporting to paint a picture of cocoa household incomes and characteristics. This analysis will be further developed and included as a companion report to the cost of living reports for both Ghana and Côte d’Ivoire. Unlike living wages and prevailing wages, there is currently no established methodology on how to compare actual incomes to a living income benchmark.
“Calculating the gap between living income and actual incomes proves more complex than comparison between living wage and prevailing wages…this is in part due to the inherent difficulty in calculating actual incomes” said Dr Tyszler. “Incomes can primarily be identified through self-reporting and only a small number of households accurately know or keep records of revenues and, particularly, costs…another challenge is that household income can come from a variety of sources which each need to be picked apart, whereas wages are more clear-cut”
Another issue highlighted by Dr Tyszler around calculating smallholder household incomes relates to the challenge of accounting for the value on the crops grown on the farm and consumed in the home. It was identified in Côte d’Ivoire that around 50% of cocoa household expenditure goes towards food, which makes the accurate evaluation of self-consumed crops pertinent for accurately estimating incomes.
KIT used a cluster analysis to group Ivoirian cocoa farming households into two main categories: typical male headed households and large male headed households. In both cases this initial comparison identified that a majority of households were living below the living income; however significantly greater proportion were typical male headed households (with only ~7% achieving living incomes). These are however preliminary results and the final analysis is expected to be finalized in November (2018).
CLOSING THE GAP
After this comparison, a research piece was presented given by Jan-Willem Molenaar (AidEnvironment) on the strategies to close the income gap for smallholder farmers which had been conducted on behalf of the Living Income Community of Practice. Strategies presented included community development, landscape management, service provision, producer organisation, value chain development, revenue generation and reinvestment, sector coordination and market management and regulation.
A panel discussion was then then conducted with moderator Elvis Coré (GISCO) and panellists Mamadou Gbongue (Conseil du Cafè-Cacao), Alida N’Tapke (PCA RASSO COOP-CA), Inge Jacobs (Mars Inc.), Carla Veldehuyzen van Zanten (Fairtrade International) and Jan-Willem Molenaar. Each were asked a series of questions around the usefulness of the benchmark and the resultant necessary actions. Below are a few responses:
‘Living income is something new and different (to typical poverty thresholds). It requires us to go further and therefore better focus to align our visions of improving cocoa farmer’s livelihoods. Some fine-tuning will be required, but with this it will make a useful reference for policy and programme evaluations’ - Dr Mamadou Gbongue, Conseil du Cafè-Cacao
‘This living income benchmark informs and improves the accuracy of Fairtrade’s calculations of a living income reference price for cocoa (for which we originally used a proxy benchmark). This will serve as an indication for the price needed to earn a living income, when minimum conditions of farm size and productivity are met.’ – Carla Veldehuyzen van Zanten, Fairtrade International
‘The power of the (living income) benchmark is that it sets a higher target for incomes which, in retaliation, requires deep review of the current situation. This resultantly motivates the exploration and implementation of more thorough and innovative changes. With low targets we only do what we perceive is enough and end up repeating the same mistakes’ – Jan Willem Molenaar
Finally a group exercise was conducted to identify the next steps for a National Working Group to begin to work on strategies to close the income gap for cocoa farmers in Côte d’Ivoire, before a final speech by Traoré Drissa (MINADER) which motivated, and emphasised the need for, collective action.
Please contact Friederike Martin (firstname.lastname@example.org) if you have any questions about the study and would like to provide feedback and/or be put on the list to receive the final study.
 The ‘Anker methodology’ was developed by Richard and Martha Anker, experts formerly at the ILO and WHO, and is grounded in international standards of decency. It is used to calculate the benchmarks produced by the Global Living Wage Coalition. It is designed to be globally applicable and locally adapted, transparent, and practical. It uses both national statistics and primary data from field work to calculate the cost of a basic but decent standard of living for a typical size family.