ANNEX CHAPTER 3:
Income and Shared Responsibility
Document SA-S-SD-21
Version 1.1
EnglishPublished on February 1st, 2023
Binding from July 1st, 2023

Included in this document:
S14 Shared Responsibility

Tools related to this Chapter:
S16: Sustainability Investment Plan Template© 2023 Rainforest Alliance. All rights reserved.

The Rainforest Alliance is creating a more sustainable world by using social and market forces
to protect nature and improve the lives of farmers and forest communities.
Name of the document

Date of first publication

Expires byAnnex Chapter 3: Income and Shared
Responsibility

July 1st, 2022

Until
noticefurther

Linked to
SA-S-SD-1 Rainforest Alliance 2020 Sustainable Agriculture Standard, Farm
Requirements
SA-S-SD-2 Rainforest Alliance 2020 Sustainable Agriculture Standard, Supply
Chain Requirements
Replaces

Applicable to

SA-S-SD-21-V1: Annex to Chapter 3: Income
and Shared Responsibility, published July
1st, 2022

Farm and Supply Chain Certificate Holders

Annexes are binding and must be complied with for certification.
More information
For more information about the Rainforest Alliance, visit www.rainforest-alliance.org, contact info@ra.org or
contact the Rainforest Alliance Amsterdam Office, De Ruijterkade 6, 1013AA Amsterdam, The Netherlands.
Translation Disclaimer
For any question related to the precise meaning of the information contained in the translation, please referto the official English version for clarification. Any discrepancies or differences in meaning due to translation
are not binding and have no effect for auditing or certification purposes.
Any use of this content including reproduction, modification, distribution, or republication, without the prior writtenconsent of Rainforest Alliance is strictly prohibited.

SA-S-SD-21-V1.1

2

OVERVIEW OF KEY CHANGES
Overview of key adaptations in this document
SA-S-SD-21-V1.1 Annex Chapter 3: Income and Shared Responsibility, published on February
6th, 2023,
compared to the previous version
SA-S-SD-21-V1 Annex Chapter 3: Income and Shared Responsibility, published on July 1st, 2022
SectionSubject

Change2.1

Production costs
andlivingincomeParagraph added on living income assessments andbenchmarks (self-selected)

2.3Timeline

Tea: Implementation date clarified to July 1, 2023
onwards on volumes sold and redeemed as
Rainforest Alliance Certified from July 1, 2023.

2.3

SD/SI payment intea

Brand owner approach further clarified in the context
of retail brands:
The packer (private label manufacturer) is required tocommit, confirm, and pay SD/SI and enter
commitments and payment in the RA traceability
systemFoodservice and retail brands are required to include
SD/SI in contractual arrangements with their private
label manufacturers (packers) and compensate
them for the SD/SI payments made on their behalf.

2.3

UpdateBananafresh fruit

Requirement
3.2.7

Cocoa minimumSD

SA-S-SD-21-V1.1

for
and

Removal of language that required exporters toinclude specific payment terms in their contracts
with farm CHs supplying the Rainforest Alliance
Certified product.
Updated to Euros (instead of US Dollars) to reflectcompanies buying from Farm Certificate Holders in
African countries using XOF or XAF

3

TABLE OF CONTENTS
S14 Shared Responsibility ..................................................................................................................... 5
1.

Introduction ................................................................................................................................ 52.

Implementation of requirements ............................................................................................. 5
2.1.

Farm requirements on Production Costs and Living Income ...................................... 5

2.2.

Farm Responsibilities on SD and SI .................................................................................. 5

Requirement 3.2.1: Sustainability Differential in Groups ........................................................ 5
Requirement 3.2.2: Sustainability Differential in Large and Individual Farm CHs ............... 6
Requirement 3.3.1: Sustainability Investment Plan ................................................................. 6
2.3.

Responsibilities on Agreements and Payments ............................................................. 7

Requirement 3.2.3 and 3.3.4: Payment of the Sustainability Differential and Sustainability
Investment .................................................................................................................................. 7
Requirement 3.2.4 and 3.3.6: Contractual agreements/commitments on SD and SI
payment ..................................................................................................................................... 8
Requirement 3.2.5 and 3.3.4: Timeframes for payment of SD and SI ................................ 10
Requirement 3.2.6 and 3.3.5: Recording and Reporting SD and SI ................................... 10
Brand owner approach: ......................................................................................................... 11
Requirement 3.2.7: Minimums and Fixed Amounts .............................................................. 11
3. Overview of Supply Chain Requirements (SD and SI) and their applicability per sector ...... 12

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S14 SHARED RESPONSIBILITY
1. INTRODUCTION
The implementation of the shared responsibility requirements needs different approaches foreach of the sectors, as the dynamics of global supply chains for Rainforest Alliance Certified
commodities vary significantly. This annex provides this sector-specific content.
Guidance on the implementation of sector-specific rules outlined in this document can further
be found on the Rainforest Alliance website.

2. IMPLEMENTATION OF REQUIREMENTS
2.1. Farm requirements on Production Costs and Living Income
According to Requirement 3.1.2, actual net income is assessed against a living income
benchmark. Living income assessments and benchmarks are an area that is still new and indevelopment, and the assessments and benchmark calculations are complex.
The Rainforest Alliance acknowledges the importance of this subject, but at this moment wecannot yet provide a benchmark tool that is practical for all farms to work with and offers
sufficiently accurate outcomes.
We are further exploring and developing this work in coming years.
Currently, requirement 3.1.2 is self-selected. Farms that are willing to work with an existing
benchmark methodology and calculate living income are invited to do so, and the Rainforest
Alliance is interested to learn from the results.

2.2. Farm Responsibilities on SD and SI
Requirement 3.2.1: Sustainability Differential in Groups
Requirement 3.2.1 requires the group administrator to distribute the total amount of
Sustainability Differential (SD) received from buyers for the sale of the certified products togroup members, proportionally based on the volume that each member delivered to thegroup.
Certificate Holders (CHs) must have complete and accurate evidence showing all paymentsof SD made to group members. This must be updated at least annually. The payment evidence
must show that the total sum of SD payments to group members is equal to the total SD amountreceived from the buyer(s). Only transaction and tax-related costs can be deducted from thetotal SD the farm CH received, if proof is available. This means farm CHs must have anadequate accounting system in place to:••••

Record SD payments separately from the product price and quality premiums or otherpremiums.
Record amounts and dates of payments made to each group member linked tovolume of product delivered to the group.
Provide group members with information on the agreed amount of SD (by volume),
and timelines and methods for payment.
Provide each group member with information on the SD paid to them.

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Requirement 3.2.2: Sustainability Differential in Large and Individual Farm CHs
Requirement 3.2.2, which applies to individual farm CHs and large farms, states that the SD isspent to benefit the producer and/or workers. Whenever the SD is used to the benefit ofworkers, worker representatives must be consulted when establishing how the SD should be
used.
If the SD is paid for the benefit of the workers, management must keep records of:••Consultation with the representation of workers on sustainability priorities.
Use of the SD against the categories defined by the Rainforest Alliance (wages, working
conditions, health and safety, housing).

Requirement 3.3.1: Sustainability Investment Plan
All farm CHs must have a plan that identifies sustainability investment needs using theRainforest Alliance Sustainability Investment Plan template (Annex S16). This plan is also used
to monitor expenditure of Sustainability Investments.
Sustainability Investments listed in the investment plan must be directly linked to achieving
compliance with core requirements and relevant improvement requirements of the 2020
Sustainable Agriculture Standard. To identify the investments needed, group or farmmanagement must use the results of their self-assessment, risk assessment, internal inspections,
audits, farm management plan and capacity assessment.
Farm certificate holders develop their Sustainability Investment (SI) plan prior to forward
contracting so they can use it as a basis for negotiation with buyers about the value ofmonetary SI or in-kind contributions needed.

Investment planning for multiple crops
Farm CHs growing multiple crops need to specify in their investment plan the investment needs
for all crops they intend to market as Rainforest Alliance Certified. These should all be included
in one investment plan.

Reporting
Farm CHs must report on the SI they receive and how they use it. They must report this at theend of the crop season, at least annually. Monetary and in-kind SI received, and how this has
been spent against each of the Investment categories, must be recorded in the Sustainability
Investment Plan. Farm CHs must also report these amounts from the investment plan in the
Rainforest Alliance Indicator Template.

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2.3. Responsibilities on Agreements and Payments
Requirement 3.2.3 and 3.3.4: Payment of the Sustainability Differential andSustainability Investment
The applicability of the shared responsibility requirements differs per sector. The table below
indicates which SC CH (Supply chain certificate holder) is responsible for complying with the
SD and SI requirements:

Crop/Sector

SC CH responsible for
SD/SI

Coffee
Cocoa
Processed fruits andCoconut Oil
Hazelnut
Herbs and Spices

Timeline for
implementation: For
Obligations:volumes certified against
the 2020 Rainforest
Alliance Standard
purchased after:-

1 July 2021

First Buyer
the initial certificate holder
legally owning the certified
product after the farm
certificate holder-

Other crops

Brand owner

Tea

Banana and Fresh
FruitsFlowers

Note for foodservice andRetail brand owners: theprivate label manufacturer(packer) is required tocommit, confirm, and pay
SD/SI on retail brandowner’s behalf. Retailbrands are required tocompensate the private
label manufacturer(packer) for this SD/SI
payment.

specify amounts andpayment terms for SD
and SI in contractual
agreements with farmCHs
make payments onvolumes purchased as
Rainforest Alliance
Certified(In the absence of a contract
between farm CH and brand)--

make commitments in
the Rainforest Alliance
traceability platform
specify SD/SI amounts byvolumemake payments onvolumes sold as
Rainforest Alliance
Certified. Transfer of SD/SI
to farm CHs will befacilitated by the
Rainforest Alliancepayment facility

Importer-the organization outside thecountry of origin importing
certified volume directlyfrom origin, including
retailers, brand owners or
any other organization who
performs this function

NB:
Exporters must forward
the SD and SI to the farm
CH
The full fixed value of SI
must reach the farm CH

TBD

TBD

1 July 2021
1 January 2023
1 July 2021
1 July 2021
1 July 2021
For volumes certified
against the 2020
Rainforest AllianceStandard, redeemed
after July 1, 2023.
NB:
Brands pay SD/SI basedon volumes redeemed in
the Rainforest Alliance
traceability platform forthe previous quarterspecify payment terms incontractual agreementswith their direct suppliers
1 January 2023

TBD

Table 1: Overview of supply chain CHs responsible to comply with requirements for the payment of SD/SI

NOTE: Supply chain CHs working with multiple crops
Supply chain CHs working with multiple crops may have different responsibilities for paymentof SD and SI, depending on the role they play in each supply chain and the payment
responsibilities for the relevant sector.

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Requirement 3.2.4 and 3.3.6: Contractual agreements/commitments on SD
and SI payment
In all crops except for tea, groups and individually certified farms must have clear contractual
agreements in place which specify the amount and other terms around the Sustainability
Investments and Sustainability Differential.

First buyer approach (coffee, cocoa, processed fruits and coconut oil,hazelnut, herbs & spices, other crops)
First buyers must negotiate SD and SI amounts with farm certificate holders. The supply chain
CH will include the agreed SD and SI in contracts with farm CHs. If in-kind SI is agreed between
parties in addition to the monetary SI amount, it should also be included in the contracts.

Importer approach (bananas and fresh fruits)
Importers must negotiate and agree on the SD with the supplier. The fixed SI amount and theagreed SD amount are included in contracts. If in-kind SI is agreed between parties, in addition
to the fixed monetary SI amount, it should be included in the contracts.
If the importer is not directly purchasing the certified volume from the farm CH, the supply
chain CH in the country of origin (first buyers/exporters, etc.) must include the negotiated SD
amount and the fixed SI amount in contracts with the farm CH. If in-kind SI is agreed between
parties, in addition to the fixed monetary SI amount, it should be included in the contracts. In
this case the Supply Chain CH that contracts directly with the farm CH must transfer the fixed
SI and agreed SD amounts to the farm CH.

Brand owner approach (tea)Brand owners must make commitments in the Rainforest Alliance traceability platform
specifying the amount of SD/SI by volume they will pay. Payments of SD/SI to Farm CHs will bemade via the Rainforest Alliance payment facility. To enable this, Brand Owners must trace outof the Rainforest Alliance traceability platform (“redeem”) the volumes used, packed, andsold as Rainforest Alliance Certified, as a minimum on a quarterly basis.
When volume is redeemed out of the Rainforest Alliance traceability platform, the platform
shows the SD/SI amount (amount by volume, US$/MT) the brand owner has committed to pay
to the farm CHs via the Rainforest Alliance payment facility. An invoice is sent to the brandowner for this amount. The brand owner pays the SD/SI according to the terms set in theinvoice.
Note: For foodservice and retail brands the above requirements are facilitated by theirprivate label manufacturer (packer) who will redeem the volumes and commit to SD/SI
amounts.
Foodservice or retail brands that decide to engage in full traceability take over therequirement from their private label manufacturer (packer) to redeem volumes out of the
Rainforest Alliance traceability platform and commit and pay SD/SI directly.

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8

Contractual agreements
For the first buyer and the importer approach, the following applies to farm and supply chain
CHs:
Agreements on SD/SI payments between farm and SC CH must include at least:••

The amount of the Sustainability Differential and Sustainability Investments by volume,
clearly distinguishing the SD and the SI from price, quality premiums, and other
differentials
Terms and conditions of payment, meaning:• Definition of the period that the Sustainability Differential and Sustainability
Investment payment relates to (e.g., annual volume contracted in 2022, October
harvest 2022)• Clear timeframe of payment (e.g., 3 weeks after receipt of certified product,annually at the end of the contract, etc., respecting requirement 3.2.5)• Method of payment (e.g., bank account details)• Currency

If the separate amounts for SD and SI are not known prior to contracting, the contractual
agreements may reference one total amount. When actual sale of the certified product ismade, SD and SI amounts must be indicated (in the Rainforest Alliance traceability platform).
The sum of the SD and SI equal the total amount agreed.
For the brand-led approach (tea) the following also applies:
SD/SI must be included in contract price negotiations between foodservice or retail brandowner and private label manufacturer (packer) from the next contract cycle after January 1,
2023. Packers enter SD/SI commitments in the Rainforest Alliance traceability platform
accordingly and pay SD/SI.

Specific Situations
Existing Investments
Supply chain CHs that have their own investment programs in place may count thoseinvestments as SI, if the investments:- relate to the implementation of the Rainforest Alliance standard farm requirements- are agreed on with the farm CH.
- are incorporated into the farm CH’s Investment Plan and contractual agreements (ifapplicable).
- are backed up by evidence of the investments made (monetary and in-kind).

Farm CHs purchasing certified products from other farms
A certificate holder (CH) with farming in scope who also purchases certified products fromother farm CHs is considered as the first buyer for the volumes purchased. For those crops
where the first buyer is responsible for payment of SD/SI (see table 1), these CHs must make
SD/SI payments for the volumes purchased as Rainforest Alliance Certified, and all supply chain
CH criteria mentioned in this document apply to them for the proportion of the product bought
other farm CHs.

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9

Intra-company trading
For multinational organizations that operate under different legal entities, requirements 3.2.4
and 3.3.6 may be applied as follows:
1. Payment terms must be documented for the Sustainability Differential andSustainability Investments between the entity paying SD/SI (e.g., trader) and the entity
receiving SD/SI (e.g., farm CH)
2. Both paying and receiving entities must record all intra-company transactions ofRainforest Alliance Certified product in the Rainforest Alliance traceability platform,
including the agreed level of SD and SI per volume.
3. Both paying and receiving entities must keep records of actual payment/receipt of
the SD and SI.

Requirement 3.2.5 and 3.3.4: Timeframes for payment of SD and SI
The Rainforest Alliance has defined specific timeframes for the payment of the SD and SI per
sector, as set out in the table below:
Crop/Sector

Applicable payment timeframe

CoffeeProcessed
Coconut Oil

FruitsandHazelnut

Payment is made no later than 12 months after shipment from farm CH
to first buyer.

Herbs and Spices
Other crops
Cocoa

Payment is made no later than 6 months after shipment from farm CH to
first buyer, unless otherwise required by local regulations.

Tea

Payment is made quarterly. Total quarterly amounts are paid within theterms set in the SD/SI invoice from the Rainforest Alliance payment
facility, and latest by the close of the next quarter.

Banana and other fresh fruits

Payment is tied to regular payments for certified bananas and otherfresh fruits.

Table 2: Timeframe for SD and SI payment

Requirement 3.2.6 and 3.3.5: Recording and Reporting SD and SI
Recording of SD and monetary SI payment (in the Rainforest Alliance
traceability platform)
First buyer and Importer approach:•••

When entering a sales transaction, farm CHs must indicate the SD and SI amounts
agreed in the contract in the field “SD/SI agreed” of the transaction details. SD/SI
amounts that were agreed in local currencies are converted and recorded in either €or US$.
The first buyer must confirm the agreed SD and SI amounts by confirming the overall
transaction made to them. If the amount entered by the farm CH differs from what wasagreed upon, the first buyer can reject the sales transaction and request the farm CH
to correct it.
For bananas and other fresh fruits: The agreed SD/SI amounts are recorded in theplatform between the farm CH and the first buyer (as explained above). If the importer
is NOT the first buyer, the SD/SI amounts agreed between the importer and its suppliers
are recorded outside the Rainforest Alliance traceability platform.

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Brand owner approach:•

When redeeming certified volume from the Rainforest Alliance traceability platform,
the brand owner indicates the SD and SI amounts they commit and confirm to pay inthe platform. In the case of foodservice and retail brands these actions are performedby the private label manufacturer (packer), unless the foodservice or retail brandtakes over the commitment and payment of SD/SI and the redeeming of volumes.

Recording of in-kind SI payment (outside the RA platform)
Sustainability Investments that are made in kind are usually not calculated based ontransacted certified volume.
SC CHs making in-kind investments must keep documentation outside of the traceability
platform demonstrating the type and amount of in-kind investments delivered.
Farm CHs who receive in kind investments must keep documentation outside of the
traceability platform demonstrating the type and amount of in-kind investments delivered.
They should also include in-kind SI received and record how this has been used against eachof the Investment categories in the Sustainability Investment Plan.

Requirement 3.2.7: Minimums and Fixed Amounts
The Rainforest Alliance has defined a minimum Sustainability Differential for cocoa. This means
the SD amount agreed between first buyer and farm CH must at least reach this amount.
Cocoa

RegionCountries in Africa using XOF
or XAF

Rest of the World

Minimum SD

63 Euro per MT of cocoa bean

70 US$ per MT of cocoa bean

Start dateAll certified cocoa produced
during the 2023-2024 harvest
cycle that is sold as Rainforest
Alliance Certified

July 1, 2022

Table 3: Minimum SD in cocoa

The Rainforest Alliance has defined a fixed Sustainability Investment for banana and other fresh
fruits. This means no negotiations are needed for SI. The amount must be included incontractual agreements.
Banana andfresh fruit

RegionAll

Fixed SI

US$ 5.50 (US$ 0.10 per banana box (18.14 kg))

Start date

Importers must pay this amount for volumes entering the supply
chain from January 1, 2023, onwards.

Table 4: Fixed SI in banana and fresh fruit

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3. OVERVIEW OF SUPPLY CHAIN REQUIREMENTS (SD AND SI)
AND THEIR APPLICABILITY PER SECTOR
Require
ment

Topic

CoffeeCocoa

Tea

Banana and fresh
fruitsOther
sectors*

Flowers

Brand owner

3.2.3

CH
responsible
First buyer
for payment
of SD

CH
responsibleforcontractualFirst buyer
3.2.4
agreements/
commitments
for SD

3.2.5

Note: For foodservice orretail brand owner,
Importer has
private label
responsibility for SD
manufacturers
payment.
(packers) areFirst buyer
responsible forFirst buyer
Other SC CHs
facilitating the
between farm CH andpayment. Brand owners
importer transfer
are responsible forpayments.
compensating thepackers for SD/SI
payments made on
their behalf.

TBD

Commitments on SD
levels are made bybrand owners in
Rainforest Alliance
traceability platform.

Contractual
agreements exist
Note: For foodservice
between sellers and First buyer
First buyer
and retail brandowners, SD/SI amounts buyers starting withare agreed with private farm CH until level ofimporter.
label manufacturer(packer) in private label
contract negotiations.

6 months,
unlessPayment
otherwise
timeframe for 12 months required bySD
local
regulations.

Quarterly, for theprevious quarter’s
volumes sold as
Rainforest Alliance
Certified.

TBD

As set by commercial
payments and
12 months
timelines.

TBD

First buyer

TBD

Brand owner

Reporting of
SD payment in
3.2.6 traceability First buyer
platform

SA-S-SD-21-V1.1

Note: For foodservice
and retail brand owners
the private label
manufacturer (packer)
is responsible forreporting in the
traceability platform,
First buyer
unless the brand ownerhas engaged intraceability, in whichcase the brand owner is
responsible for reportingin the traceability
platform.

First buyer

123.2.7

3.3.4

Minimum SD
amountNA

Supply chainCH
responsible First buyer
for paymentof SI

70 US$/MT
cocoa
bean.
Mandatoryfrom
October 1,
2022(Africa); July
1, 2022 (restof the world)First buyer

NA

Brand owner

NA

NA

Importer has
responsibility for SI
payment of $ 5.50
p/MT to be received
by the farm CH on
exported volumes. First buyer

TBD

TBD

Other supply chain
CHs between farm CH
and importer transfer
payments.
Brand owner

Reporting of SI
payment in
3.3.5 traceability First buyer
platformCH
responsibleforcontractualFirst buyer
3.3.6
agreements/
commitments
for SI

Note: For foodservice orretail brand owner,
private label
manufacturers(packers) areFirst buyer
responsible forfacilitating thepayment. Brand owners
are responsible forcompensating thepackers for SD/SI
payments made on
their behalf.

First buyer

First buyer

Commitments on SI
levels are made bybrand owner in
Rainforest Alliance
traceability platform

Contractual
agreements exist
between sellers andFirst buyer Note: For foodservice
buyers starting with First buyer
and retail brand owners farm CH until level of
SD/SI amounts agreed
importer.
with packer in private
label contract
negotiations* Other sectors: Including processed fruits, coconut oil, hazelnut, herbs and spices, vegetables.

SA-S-SD-21-V1.1

TBD

13

TBD