(Bloomberg) -- The world’s top cocoa producers backed down from a threat to suspend sustainability programs that they said confectioners and other buyers had prioritized over better pay for farmers.

Ivory Coast and Ghana, where more than 60% of the world’s cocoa is grown, warned the industry earlier this month that companies have to either start purchasing beans at a price that includes a so-called living-income differential of $400 a ton, or risk a halt to their social responsibility projects -- commercially sensitive programs that consumers increasingly demand. The premium would benefit all farmers while sustainability programs only reach a few, the regulators said.

“After very difficult engagement with industry, we have come to a clear understanding that industry now generally supports the living-income differential,” Ghana Cocoa Board Chief Executive Officer Joseph Boahen Aidoo said at a conference in Berlin on Wednesday. “Therefore we are staying our action” on sustainability programs, he said.

Since the implementation of the price plan in July, many firms in the cocoa and chocolate sectors have grappled with adhering to the new strategy as the premium cannot be hedged. Analysts have also questioned whether the plan will eventually cause an oversupply of beans and disrupt prices further.

Mars Inc. and Nestle SA are among the companies which said they have started buying cocoa at the premium price.

“The living-income differential and sustainability programs can operate together as the two complement each other,” the two countries said in a joint statement issued later on Wednesday. “However, we shall monitor and evaluate the complementary co-existence of the living-income differential and sustainability programs being implemented in our respective countries to decide on them, going forward.”

--With assistance from Isis Almeida and Moses Mozart Dzawu.

To contact the reporter on this story: Olivia Konotey-Ahulu in London at okonoteyahul@bloomberg.net

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Andre Janse van Vuuren, Liezel Hill

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