The Tony’s Open Chain model is anchored in a cooperative-centric approach. What does that mean in practice?
1. Local ownership The success of Tony’s Open Chain hinges on working with partner cooperatives who are deeply rooted in local cocoa communities and well-versed in the industry. As independent and democratic entities, owned and run by cocoa farmers, they drive the efforts of Tony’s Open Chain in Côte d’Ivoire and Ghana. They are a crucial and direct link between cocoa farmers and Tony’s Open Chain, representing the interests of their farmer members. This makes them ideal partners for implementing programmes that create meaningful impact for cocoa farmers, and delivering the most effective solutions to challenges within their own communities. 2. Long-term commitments emphasising equality For partner cooperatives the long-term commitment to partnership and paying a Living Income Reference Price to farmer members is intended to translate into economic stability, better financial planning and the ability to invest in the cooperative’s members, ultimately enhancing financial resilience. This is why one of our 5 Sourcing Principles emphasises long-term commitments. Tony’s Open Chain facilitates this through a Memorandum of Understanding (MoU), which guarantees at least 5 years of collaboration and ensures that partner cooperatives are also at liberty to sell their cocoa to other buyers. Tony’s Open Chain’s MoUs are designed to address structural inequalities in the cocoa supply chain, offering farmers greater agency and security in the process of selling their cocoa. The focus is on equal partnership, dialogue and shared responsibility. This long-term approach not only empowers cocoa-growing communities but also enables partner cooperatives to develop comprehensive 5-year strategic plans together with the Tony’s Open Chain team. Grounded in shared commitments, this plan serves as a roadmap for the partnership, guiding annual planning, implementation and progress evaluations. Our ambition is to become partner cooperatives’ preferred buyer through our approach rather than because of a binding contract, while ensuring that the non legally binding nature of our agreement never implies that we can simply walk away. Alongside our commitments, dispute resolution and remediation processes are in place to ensure that both parties remain protected. VOICE Network on asymmetrical contracts: “Being tied to a single buyer can be a double-edged sword for farmers and farmer cooperatives as it can create dependencies and prevent them from taking advantage of higher prices elsewhere. There is a clear power imbalance between the various actors in the chain. In the current system most risks (on volume, price, delivery) are covered for the buyer, but farmers find themselves often waiting for a selling contract resulting in them accepting hunger prices. This means that long-term contracts need to be asymmetrical in nature, providing farmers more rights, while putting more responsibilities on the shoulders of the purchasing companies. Concretely, an asymmetric contract needs to commit buyers to buy a minimum tonnage of cocoa at an agreed-on price, but the farmer needs to be free to sell to a different buyer if they can get better conditions. Price renegotiation clauses should be part of such long-term asymmetric contracts, to allow farmers to take into account fluctuations of the prices of raw materials and cost of living.” 1
1. VOICE Network, Good Purchasing Practices: a cocoa barometer consultation paper, p. 15-16
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