Short-term Expert Consultancy Sustained Higher Income: From Living Income to Resilient Cocoa Li

Oxfam is an international confederation of 21 organizations, working with its partners and allies, reaching out to millions of people around the world. Together, we tackle inequalities to end poverty and injustice, now and in the long term–for an equal future.  

 Income Resilience  

Cocoa farming is a critical livelihood for millions of smallholder households, yet it is highly vulnerable to market fluctuations, climatic shocks, and systemic risks. The Living Income (LI) concept has been pivotal in benchmarking poverty and catalyzing action to improve incomes in the cocoa sector. However, focusing solely on LI levels overlooks critical dimensions of income resilience. This research integrates income resilience into our understanding of cocoa farmer incomes, with the aim of improving company decision-making on income-enhancing interventions, deepening our understanding of farmer decision-making, and ultimately informing the design of more effective and sustainable cocoa strategies. 

Price volatility, unpredictable yields, and other shocks make it difficult for farmers to sustain adequate incomes, plan investments, and reduce exposure to income risks. As in other sectors, uncertainty discourages long-term investment, particularly when returns are delayed. This is especially relevant in cocoa, where investments in replanting, rehabilitation, and productivity improvements often require several years to generate returns, while many farmers operate with limited liquidity and limited capacity to manage risk. In this context, creating sustained higher income requires not only sufficient income levels but, critically, greater income stability. Without more predictable earnings over time, cocoa farmers are unlikely to undertake the long-term investments necessary to sustain productivity and livelihoods. 

The Living Income (LI) concept has been pivotal in benchmarking poverty and catalyzing action to improve incomes in the cocoa sector. It has inspired concrete interventions and created a movement in Europe, where multi-stakeholder initiatives (MSIs) increasingly prioritize income as a core issue. 

However, focusing solely on LI levels overlooks critical dimensions of income stability and resilience. Many private sector theories of change assume a “virtuous cycle” where higher income automatically enables more investment in cocoa, generating further income. Evidence that such cycles reliably occur is limited, and existing metrics do not capture the full spectrum of farmers’ capacity to maintain and recover income amid shocks. 

This study proposes to complement the LI lens with the concept of income resilience, using a working definition of the set of capacities that reduce farmers’ exposure to income loss from shocks and enable recovery from these shocks.  

For Phase 1, the goal of sustained higher income is analyzed through two distinct but related dimensions: (1) achieving higher absolute income over time to close the living income gap, and (2) enhancing income resilience through different elements, such as risk management and recovery, preventing, absorbing, and recovering from shocks that would otherwise reduce incomes. These elements of income resilience, with their longer-term perspective and focus on stability, complement the living income framework in three ways. First, they highlight how interventions may influence farmers’ income and decision-making. Second, they can support higher absolute incomes, thereby contributing to closing the living income gap. Third, they allow us to value strategies that improve resilience even if they do not immediately increase absolute income.  

Understanding which interventions are most effective in improving income and resilience will support strategic decision-making, program refinement, and aim to contribute to  sector-wide transformation through Oxfam’s influencing agenda.