Fairtrade first introduced Living Income Reference Prices for cocoa from Ghana and Cote d’Ivoire in 2018. The aim was to provide the industry with a benchmark price that – under defined parameters – can enable a typical cocoa farmer household to earn a living income. (Learn more about our Living Income Reference Prices here).

As we published updated cocoa reference prices for Ghana and Côte d’Ivoire in January 2025, some stakeholders raised questions that highlighted differences in expectations about living income reference prices. We identified a few important questions to revisit:

• Should the Living Income Reference Price be anchored to the reality of Fairtrade farmers – who may be relatively better off than the average farmer due to support and benefits that come with Fairtrade – or should it reflect the situation of all cocoa farmers and serve as a sector-wide benchmark?
• Should reference prices be based on a realistic target yield and a viable cocoa area, or on farmers’ current yields and farm sizes? Basing prices on current realities would imply higher reference prices, since many farmers still produce below target yields and farm sizes are often too small to rely fully on cocoa income.

We recognised the need for a structured, inclusive review of the price model to strengthen its robustness and build greater alignment across stakeholders.

That’s why we developed a multi-phase approach to revisit the Living Income Reference Price model covering 1) planning, 2) reviewing the Living Income Reference Price model, and finally, 3) reviewing the values of the reference price variables to update the prices. 

This update focuses on the model review phase, which concluded in December. The primary goal of this exercise was to enhance the model itself - its design, underlying principles, and overall representativeness - while aiming to build consensus across stakeholders. Following this step, the reference prices will be updated accordingly.

Revisiting core principles and clarifying the model

Fairtrade launched an in-depth review of the price model with a multi-stakeholder dialogue in Brussels in May 2025.

With the support of consultant Yuca Waarts, through scenario assessment and a series of stakeholder consultations, we revisited the model’s core principles as well as its scope of applicability, including:

• Co-responsibility: the shared responsibility across the cocoa value chain to close income gaps through sustainable prices and yield improvements.
• Fair return on labour: that both household and hired labour effectively deployed in cocoa production should be remunerated at a living wage, and therefore, a fulltime cocoa farmer should be able to earn a living income from cocoa alone. 
• Sector applicability: whether the reference price should be relevant for any supply chain (not just Fairtrade), recognising that the wide variation in farmer situations – and their access to the support needed to reach sustainable productivity levels – challenges the broad applicability of a single price.

Fairtrade then established an Expert Advisory Council to review and discuss the findings, build a shared understanding and align on areas for improvement. The council’s advice was incorporated into the consultant’s final recommendations to Fairtrade for enhancing the model. 

Key outcomes of the model review phase

Co-responsibility: The price model will continue to use a realistically attainable yield assuming adoption of good agricultural practices. However, the definition of “realistic” (in terms of expected level of good agricultural practices adoption and short-term yield result) needs further refinement. Next step: This definition will be revised in the next phase of the review in early 2026.

Fair return on labour: There was broad agreement that income from cocoa should deliver a living income proportional to the time farmers spend on cocoa production. However, the current link between this principle and the concept of a viable farm size has proven difficult to interpret. Next step: Alternative approaches will be assessed to better reflect farmer realities in terms of labour allocation, farm size and income diversification. Greater emphasis will also be placed on explaining fair remuneration for labour within the reference price model. 

Sector applicability: Stakeholders recognised the value of sector-wide reference prices that reflect the reality of all cocoa farmers. However, given data limitations and capacity constraints as well as relevance for Fairtrade partners, Fairtrade will continue to base reference prices on the reality of Fairtrade farmers, to whom we have direct access for data collection and consultation. Next step: Fairtrade will analyse to what extent the conditions of Fairtrade farmers are comparable to those of non-Fairtrade farmers with similar adoption of good agricultural practices, to assess whether Fairtrade-based reference prices can serve as a proxy for the sector.

A recent decision on Fairtrade Premium payment and application…

The Fairtrade Premium is an amount on top of the selling price that buyers pay to cooperatives for all Fairtrade sales, as required in our standards.  When a company is paying a voluntary Living Income Reference Price, some companies have asked whether Fairtrade Premiums can be counted as part of the price differential.

It’s important to understand that Living Income Reference Prices and the Fairtrade Premium serve different purposes. While the reference price aims to cover what a farmer needs to farm sustainably and afford a decent standard of living, the Premium is generally intended for collective priorities, as decided by a cooperative’s members. This can mean supporting cooperative operations and services for members, or infrastructure, or community projects, based on identified priorities and democratic decision making. The Premium often plays a vital role in addressing complementary producer needs, such as productivity improvement, climate resilience, and diversification efforts. That’s why we have always recommended that Fairtrade Premium should therefore still be added paid on top of the Living Income Reference Price.

In the recent cocoa Fairtrade Minimum Price and Premium review for Ghana and Côte d’Ivoire, the Fairtrade Standards Committee decided that 40 percent of the Fairtrade Premium earned by cooperatives in these two origins must be paid directly in cash to cocoa farmers, as of October 2026. This requirement is intended to strengthen farmers’ incomes by ensuring a larger share of the Premium goes directly into households. 

…can count toward paying the Living Income Reference Price 

Given this new Premium structure for Ghana and Côte d’Ivoire, Fairtrade’s Living Income Steering Committee has agreed that the 40 percent cash portion of the Fairtrade Premium can be counted towards closing the gap (if any) between the Living Income Reference Price, and the government-set farmgate price. 

Currently the government-set prices Côte d’Ivoire and Ghana are above the Living Income Reference Prices, meaning no differential payments are required. However, if official prices fall below the reference price in the future (after October 2026), the cash Premium contribution may be applied to help close the gap.

What’s next?

Based on the decisions about the reference price model, the numeric values for the variables in the Living Income Reference Prices will be reviewed. This phase has started this month and will include an inclusive data deep-dive workshop to support the re-calculation of the reference prices. 

We expect to announce the updated reference prices in April 2026.