EDITORIAL: AN SOS PLEA TO WEAH GOVT: Take a Cue From Ghana, Ivory Coast On Cocoa Export
IN 1991, NEXT DOOR GHANA’s Cocoa Board established by ordinance to encourage and facilitate the production, processing and marketing of good quality cocoa and coffee, revamped the Agricultural Diversification Project resulting in improved pricing, liberalized markets and improved research and extension. All this was done to ensure that farmers are paid remunerative producer price.
IN NEXT DOOR, Ivory Coast, the region’s top cocoa producer, earlier this year, averted defaults on export contracts by letting multinational commodities companies buy at-risk contracts direct from local exporters.
THE IVORIAN GOVERNMENT took the decision following a dismal 2017/18 and 2016/17 growing seasons, during which exporters defaulted on nearly 500,00 tones of cocoa contracts they had bought in advance of the season as world market prices fell and exporters were unable to honor commitments to suppliers. In response, the Cocoa and Coffee Council (CCC) was forced to resell their contracts at an overall cost of more than 300 billion CFA francs ($512 million) to the Ivorian government.
TO THE CONTRARY, in Liberia, cocoa producers are being forced to sell their produce through Lebanese businessman Hassan Sidani and his father, Bassam who facilitate sale on the international market through the Dutch company, Theobroma Chocolate Lounge.
THEOBROMA are the off taker that would finance the exports cocoa via Aya Group/Sidani Group Holding owned by the Sidani family.
THEOBROMA INTERNATIONAL (part of ECOM Group) has been a leading independent trader and market maker in cocoa products and cocoa beans since 1922. The company is a long-standing buyer of cocoa in Cameroon and was the first to certify Cameroonian cocoa farmers in 2012. The company applied for funds from the Dutch Ministry of Foreign Affairs in Benin to expand certification and to improve on its sustainable supply of cocoa.
THE LIBERIAN GOVERNMENT stands to gain more by working directly with Theobroma in a fair, transparent and accountable process on behalf of Liberia instead of allowing the Sidani family to serve as intermediary between Theobroma and Liberian cocoa producers.
THIS BEGS THE question, what role is the Ministry of Agriculture playing in all of this?
EVEN MORE IMPORTANT, What role is the Liberia Agriculture Commodity Regulator(LACRA), an offspring of the Liberia Produce Marketing Corporation doing to address these concerns?
RECENTLY, COCOA PRODUCERS under the banner of the National Liberia Cocoa Exporters Association (NALICEA), raised alarm over recent statement made by Musa Konneh, Deputy Director General for Technical Services at the Liberia Agriculture Commodity Regulator (LACRA), about plans to monopolize the cocoa industry. According to them, the plan will also destroy the hope of Liberians who have invested in the sector.
MR. SHEIKH A. TURAY, President of NALICEA, said the LACRA’s plan is not in the best interest of the country, and it also contravenes President George Weah’s policy to promote Liberianization, which aims to have citizens fully participate in the Liberian economy.
MR. TURAY IS RIGHT. President Weah did promised during his inaugural address that he would not make Liberians spectators to the economy when he declared: “We will remove unnecessary regulatory constraints that tend to impede the establishment and operation of business in a profitable and predictable manner. As we open our doors to all foreign direct investments, we will not permit Liberian-owned businesses to be marginalized. We cannot remain spectators in our own economy. My government will prioritize the interests of Liberian-owned businesses and offer programs to help them become more competitive and offer services that international investors seek as partners.”
WE AGREE WITH Sheik Turay, that LACRA is hellbent on a dangerous and unscrupulous path toward destroying the cocoa sector in Liberia.
IT IS SAD THAT while next door Ghana and Ivory Coast are making moves to set a minimum price for cocoa beans with a proposed floor price of $2,600 per tonne in an effort to improve the livelihoods of poor family farmers who produce for major chocolate companies, Liberia is doing totally the opposite, monopolizing the sector to a Lebanese business family who in turn dictate the price far below the US$2,600 per tonne for local exporters.
IRONICALLY, THE minimum price agreed to by both Ghana and Ivory Coast is not only slightly above the current market rate, but also protects farmers from fluctuations. The going price was $3,200 per tonne three years ago before plummeting due to oversupply. Globally, 4.55 million tonnes of “brown gold” was produced in 2016, where 85% of the market is controlled by companies such as Kraft, Mars, and Nestlé.
ACCORDING to the International Cocoa Initiative (ICI), a Swiss-based foundation for child rights, most cocoa producing families live below the World Bank’s poverty line of $2 a day.
FOR A GOVERNMENT riding on the backs of a pro-poor agenda, eliminating any sign of monopoly is a win-win situation for all. The government can in one strike, work in the interest of those languishing at the bottom of the economic ladder or continue to allow the Sidani family to control the pricing while denying local cocoa producers what they rightfully deserve.
THIS IS THE BEDROCK of good and accountable governance.
BOTH GHANA AND IVORY COAST took the strong decision in June to suspend their sales for better prices in hopes of addressing the imbalance between farmers’ income and money made by large commodity merchants. The producers and traders agreed on the course of action because majority of money does not reach the farmers who live in poverty.
LIBERIA IS NO WHERE near Ghana and Ivory Coast, which account for nearly two-thirds of the world’s output but with adequate pricing, monitoring and elimination of the monopoly culture, it could go far. In the end, it is not only the very poor farmers who will benefit the most but Liberia, which in the long term could see a major surge in profits for cocoa production and a huge revenue generation boost for the struggling economy.