In 2018, the Living Income Community of Practice (LI CoP) embarked on a new adventure – applying the Anker Living Wage Methodology to estimate living income for cocoa farmers in Cote d’Ivoire and Ghana. Interest in living income is currently very high among buyers, civil society and sustainability standards concerned with the knock-on effects of recent cocoa price fluctuations on smallholder incomes. The situation in Ghana and Cote d’Ivoire was particularly pertinent, with these two countries being the world’s largest cocoa producing nations.
This work to produce a living income benchmark for the sector was financially supported by Cargill, Fairtrade International, GIZ, the Lindt Cocoa Foundation, Mars and UTZ Rainforest Alliance who felt that a benchmark would be valuable for their work and the cocoa sector overall. The studies were then supported by a steering committee which also included Kuapa Kokoo Co-operative Farmers Union, CARE, the VOICE Network and World Cocoa Foundation (WCF) and a technical committee of Rainforest Alliance, ISEAL and Richard and Martha Anker. The two living income benchmark studies were proposed, vetted and validated with stakeholders in Cote d’Ivoire and Ghana respectively, and are now available on www.living-income.com/papersandreports .
Today we launch the first in a series of blogs reflecting on this experience and what we as a community have learned both about the methodology and about the value of living income benchmarks themselves. We start with the beginning of the benchmark setting process.
Scoping the geography
It may seem obvious, but an important first step to setting up a living income calculation is to broadly identify the geographic area you would like your benchmark to represent. This is because living income is a place-specific concept. When we talk about a living income for farmers, we mean an income than enables farmers to cover the cost of decent standard of living. As cost of living varies from place to place, so does the living income. But it would be impractical to have a living income benchmark for each village or neighbourhood. In some cases, even having one estimate per district would be problematic. Deciding how large of an area to cover with one living income benchmark is an art rather than a science. One has to weigh real variations in living cost across space against the desire to provide a clear and simple picture of what a living income is for those who are going to act on this information.
In the case of the recent LI CoP benchmarks, the goal was to help the cocoa sector understand what a living income is for cocoa farmers in Ghana and Cote d’Ivoire. We were looking for one estimate for the whole cocoa growing area for each country, provided there was not significant cost variation across the area. In applying the Anker methodology, selecting a geography and understanding the motivation behind this selection is a critical initial step as it sets boundaries for your benchmark and the people it represents. In our case, we commissioned scoping studies in each country to determine what the boundary would be.
The Anker methodology requires that robust national data sets are consulted first, and then primary data collected in locations typical of the larger geographical area to validate diet and housing costs, so that the Living Income benchmark can be considered representative of the area as a whole. Ascertaining appropriate cocoa growing jurisdictions to include, involved consultations with the Research Department of the Ghana Cocoa Board, reviewing a number of secondary datasets (including cocoa production maps, household expenditure data, regional cocoa productivity datasets and poverty prevalence) and talking to agronomy experts and researchers to affirm secondary findings. The subsequently selected cocoa growing regions were then discussed in consultation with national stakeholders during launch workshops, and as a result small adjustments were made to the sampling regions. In Ghana the final selection was 4 typical cocoa growing regions (Ashanti, Eastern, Western and Central) and in Cote D’Ivoire 8 (Indenie-Djuablin, Sud-Comoe, Me-Agneby, Tiassa, Loh Djiboua, Gagnoa, Tonkpi, San Pedro and Nawa) with a representative cocoa growing district selected within each region for primary data collection.
It is clear that deciding the geography for a benchmark requires engagement with a number of different stakeholders. A prerequisite to this is stakeholder identification; a critical preliminary step in the process overall as it sets the stage for an engaging and actionable Living Income benchmark. The next blog in this series will explore the key learning and processes of stakeholder identification from the two West African pilots.
For more information on the process and application of the Anker methodology click here.