IDH 2024 Annual Report: Better Incomes

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Introduction Impact in Numbers Highlights Case Study

Unlocking prosperity for smallholder farmers

The case for better incomes

In 2024, the global agricultural commodities market was valued at USD 230 billion. Despite this, smallholder farmers producing coffee, tea, cocoa and other commodities receive only a small portion of the generated value. Many of these farmers live in extreme poverty, unable to meet their daily needs or earn a decent living. Smallholder farmers produce around a third of the world's food, and yet many earn less than US$ 2.15 a day.

This unequal value distribution has profound consequences that reach far into society and business. Persistent poverty increases the risk of forced and child labour, environmental degradation like deforestation, and threatens global and regional food security. These issues have a destabilising effect on value chains and pose reputational risks for companies sourcing from them.

A living income is the net annual income needed for a household to afford a decent standard of living, including essentials like food, water, housing, and healthcare. This is known as the living income benchmark, from which it is possible to calculate the gap between a living income, and what farmers earn.

A smart mix of interventions

Several factors drive income, from production costs and volumes to land use, market prices and incomes from alternative sources. Closing living income gaps requires a combination of strategies, or a "smart mix", that target a number of these income drivers simultaneously, rather than focusing on a single factor or intervention.

To achieve long-term, sustainable results these interventions must often take a multi-stakeholder approach and go beyond individual actors. IDH collaborates with key partners to co-create practical guidance, a common agenda and drive action on these strategic areas.

A roadmap to close living income gaps

IDH supports companies’ efforts to close gaps on living income by strengthening international alignment, sharing knowledge and tools, and building tangible solutions.

IDH’s Roadmap on Living Income helps companies to take ambitious and aligned actions to improve incomes and close living income gaps for farming households. It is a framework that outlines a range of steps, guiding questions and data-driven tools designed to be dynamic and used simultaneously. It highlights the need to use comparable data, engage in multi-stakeholder partnerships and take immediate action.

Visit the RoadmapVisit the Roadmap

What’s happening through our partnerships

*Cumulative results for 2024 against the 2021-2025 funding cycle

A practical tool to calculate impact

Complementing field-level approaches with changes in business practices, especially in procurement, can drive transformative change. In 2024, IDH focused on supporting companies in adopting sustainable procurement practices to close living income gaps with practical guidance and data-driven tools.

At the Living Wage & Living Income Summit 2024, IDH launched the Income Driver Calculator (IDC), a data-driven decision tool to support organisations and practitioners with living income ambitions. The Income Driver Calculator helps companies to use aggregate data to assess the size of the living income gap and support decision-making by identifying the most effective strategies. Users can create scenarios to understand the contribution of different income drivers needed to close the gap and visualise these results for effective communication.

The tool - part of IDH's Living Income Roadmap - is designed to:

Assess the living income gap,
Measure the impact of each income driver,
Build scenarios on specific interventions and
Analyse the impact of the interventions on the living income gap.

Building on data-driven insights to support a maize cooperative

The Farmfit Insights Hub is an online platform that offers user-friendly tools designed to guide investors, companies and supporting organisations in making data-informed decisions to effectively maximize the impact of their collaboration with smallholder farmers. IDH’s Inclusive Business Analyses, part of the FarmFit Insights Hub, helps to create inclusive, sustainable sourcing models that drive profitability and benefit smallholder farmers. The aggregated insights from these models are shared on the Hub.

In Rwanda, the Icyerekezo 20-31 TABA maize cooperative faced low productivity, inefficient sourcing, and limited participation from women farmers. With IDH’s support, the cooperative improved farmer services, including access to quality inputs, technical training, and financial tools, while actively engaging women farmers. As a result, women now make up 45% of the cooperative’s membership, productivity has risen by 57%, and farmer incomes have grown significantly.

This transformation highlights how tailored, inclusive strategies can strengthen farmer resilience, boost productivity, and promote gender equality, positioning Icyerekezo 20-31 TABA as a model for sustainable and inclusive agriculture in the region.

Highlights from 2024

Supporting resilient coffee farming in Kenya & Uganda

Smallholder coffee farmers in Kenya and Uganda face challenges like low incomes, poor soil health, and fluctuating yields, making them vulnerable to economic and climate shocks. To address these issues, IDH and Ikea Foundation launched the Coffee Farmer Income Resilience Program (CFIRP) which aims to improve the livelihoods of 20,000 farming families by integrating coffee cultivation with other farming activities, promoting regenerative agriculture, and creating blended service delivery models. IDH has partnered with six private sector coffee companies to implement field-level activities, train farmers, and improve market access. While work remains to be done, the 2024 evaluation of the program shows impressive results. 88% of farmers are now trained in regenerative practices, 89% of farmers have a formal bank account, and on average coffee farmer incomes rose by 140%.

Watch a video about the ProgramWatch a video about the Program

Unlocking financing for smallholders in Côte d'Ivoire

Smallholder farmers in Côte d’Ivoire face limited access to affordable financing, restricting their ability to adopt sustainable agricultural practices and improve their livelihoods. To address this, the IDH Farmfit Fund invested €2.3 million in Advans Côte d’Ivoire, a leading agri-microfinance institution. This investment allows Advans to expand its tailored loan offerings to farmers, reducing financial barriers and risks through inclusive credit solutions. The loan from IDH Farmfit Fund will be used to finance several crops, with cocoa as the central focus. As the financing will be allocated to multiple value chains, it will allow cocoa farmers to diversify their sources of income and will unlock financing in alternative crop supply chains. The financing will contribute to Advans’ target of impacting up to 500,000 smallholders in Côte d'Ivoire.

Ensuring Fair Value in the Coffee Sector

With over 2.25 billion cups of coffee consumed globally every day, the international coffee market generates substantial and growing value. However, there has been a knowledge gap on how this value is distributed in the supply chain and how much of it reaches coffee growers. With this in mind, the Global Coffee Platform (GCP), IDH and Solidaridad commissioned BASIC (Bureau d’Analyse Sociétale d’Intérêt Collectif) to build a model to estimate the distribution of value, costs, taxes, and net profit margins along coffee value chains, from coffee farmers in Brazil, Colombia, Ethiopia and Vietnam, to retail consumers in Germany. The resulting report Grounds for Sharing: a study of value distribution in the coffee industry aims to provide a starting point for additional ways to work on farmer prosperity, that think through value and risk distribution in the sector.

Read Grounds for SharingRead Grounds for Sharing

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To finance our agricultural sector with meaningful impact, foster diversification, and build resilience in the face of climate change, we need the support of partners willing to share both the risk of product innovation and the cost of expanding reach. We are grateful that the IDH Farmfit Fund has agreed to take on this role...

Mariam Djibo– CEO of Advans Côte d’Ivoire

As a pioneering financial institution in agricultural financing, we are committed to continuing our collaboration with the agricultural ecosystem, building sustainable value chains, and contributing to the improved quality of life for smallholder farmers.

Mariam Djibo– CEO of Advans Côte d’Ivoire

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Case Study

Upscaling sustainable procurement models in cocoa

A sweet treat with bitter challenges

While chocolate is beloved worldwide, its primary ingredient—cocoa—faces serious challenges that stem from a bitter root cause: poverty. Studies show that smallholder farmers in key cocoa producing countries like Côte d’Ivoire and Ghana earn less than half the living income benchmark.

This poverty drives issues like deforestation, as farmers seek new land, and child labour, with children working in the fields because hired help is unaffordable.

In the past, efforts to improve farmer livelihoods have focused almost exclusively on field-level interventions such as productivity. While helpful, these initiatives alone cannot lift farmers out of poverty. Recognising the need for deeper, systemic change, IDH has championed a shift toward sustainable procurement practices—ensuring farmers earn stable and higher incomes through fair pricing, long-term contracts, and diversified income opportunities.

Putting procurement at the heart of change

IDH’s convening work is pivotal to embedding sustainable procurement into industry norms. Platforms like Beyond Chocolate in Belgium and DISCO (Dutch Initiative on Sustainable Cocoa) in the Netherlands serve as engines for collaboration, aligning stakeholders around shared goals and driving accountability.

In 2024, IDH amplified the sustainable procurement agenda with a statement on sustainable procurement by the National Initiatives on sustainable cocoa (ISCOs)at the World Cocoa Conference and the launch of a procurement position paper by DISCO. These efforts have placed sustainable procurement firmly on the radar of industry leaders, fostering a shared ambition to create meaningful impact.

Collaborative Action Delivers Results

Setting high ambitions through its convening work, IDH has additionally forged one-to-one partnerships with private sector partners to pilot and scale impactful living income models. By gathering data and providing actionable guidance, IDH equips companies with the tools to embed successful models in their supply chains.

European retailers making the shift towards living income cocoa

Upscaling the Open Chain

In 2023, IDH partnered with Tony’s Open Chain to scale its sourcing model, which focuses on five key principles: better prices, long-term relationships, traceable beans, empowering farmers, and improving productivity and quality. A standout feature of the model is its payment of additional premiums to help achieve a Living Income Reference Price. IDH and Tony’s Open Chain are working together to gain deeper insights into the model and to further improve and upscale it.

This collaboration has proven transformative. In 2024, major retailers have joined the Open Chain. Albert Heijn is now sourcing all store-brand cocoa under Open Chain principles and others like Jumbo, Aldi, and Plus are following suit for segments of their store-brand assortment.

A new living income model with a strong business case

Through the Beyond Chocolate co-financing fund, IDH supported Belgian retailer Colruyt Group in piloting an innovative living income model. Collaborating with partners such as Puratos, Fairtrade, and Rikolto, Colruyt implemented a pricing structure where each partner contributed toward the Living Income Reference Price (LIRP) as part of a holistic living income strategy.

By 2024, an impact study revealed that farmers’ incomes from cocoa had increased by 38% due to the payment of the LIRP alone. Additionally, the study confirmed that the model is economically viable—none of the partners incurred losses. Bolstered by this success, in October 2024, Colruyt announced plans to scale the LIRP model across all its private-label Boni products. The pilot did not only ensure impact for farmers in the Boni supply chain but also established a replicable model for other retailers and brands. The success of the Colruyt pilot provides a clear example for companies seeking to integrate sustainable procurement practices into their operations to improve farmer incomes.

Multinational implementing innovative living income program

In 2020, multinational brand Nestlé launched their own living income program, the Nestlé Income Accelerator. The Program addresses income disparities among cocoa-farming families in Côte d’Ivoire and Ghana. It provides up to €500 annually via mobile money for activities like school enrolment, good agricultural practices (GAPs), agroforestry, and income diversification. Funds are equally distributed between household heads to foster gender equality. IDH plays a governance role, convening the Strategic Advisory Committee to collect stakeholder input and guide effective implementation. Launched as a pilot in 2020 with 1,000 farmers in Côte d’Ivoire, the program expanded to Ghana in 2024 and targets 160,000 families by 2030. The 2024 progress report reveals a 38% rise in household income and over a 10% increase in school enrolment, reflecting its transformative impact on livelihoods and education.

A Transformative Year for Cocoa Sustainability

In 2024, IDH has been instrumental in advancing sustainable procurement and scaling living income models in the cocoa sector. By testing and refining innovative approaches, IDH equips partners with actionable insights, while its convening work creates a level playing field and raises ambition across the industry. The result is a growing market for living income cocoa products in Europe, benefiting both farmers and consumers.

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