Cocoa sustainability efforts will fail without living wage for farmers - report

LONDON, Dec 6 (Reuters) - Environmental and social problems in global cocoa supply chains are likely to continue unless companies pay farmers substantially more for their beans, according to a major report on cocoa sustainability published on Wednesday.

The Cocoa Barometer, produced by the VOICE Network group of civil society organisations, found farmers in many cocoa-producing countries remain poverty stricken and unable to reduce levels of child labour and deforestation.

The report comes a day after the European Union agreed a new law to prevent companies from selling into the EU products like cocoa and chocolate linked to deforestation around the world.

The law comes after decades of efforts by companies to clean up their supply chains through 'certification schemes' - or third party audits - have largely failed to have an impact.

A major part of the problem, according to the report, is that the schemes don't commit to paying farmers a living wage, even if they do pay them a premium for cocoa certified as free from environmental and social harms.

"We've got new data that shows you cannot have sustainable cocoa without higher prices for farmers. It's just not going to work," Antonie Fountain, director of the VOICE Network, told Reuters.

Corporate certification schemes tend to focus on 'good agricultural practices' like encouraging farmers to increase productivity - a double-edged sword that can lead to lower global cocoa prices if not accompanied by government programmes to lower overall output.

Such programmes are however absent, the report found, with government strategies in key producing countries often still aimed at encouraging increased cocoa production to combat poverty.

The report welcomed the new EU law as a first step in introducing change, but warned it will be hampered if companies do not take action soon to pay a higher price for cocoa.

"Most cocoa-purchasing companies continue to operate business as usual, supporting (certification schemes) while refusing to directly address their own purchasing practices – including pricing," the report said. (Reporting by Maytaal Angel, editing by Deepa Babington)