Ivory Coast cocoa reform promises farmers 60 pct of price

by Ange Aboa

The government of Ivory Coast, the world's top cocoa grower,on November 2 signed off on a cocoa reform plan whose core aim is to boost output and quality by giving the country's hundreds of thousands of smallholders a higher selling price.

"A minimum price of 60 percent of CIF (market price) will be guaranteed to producers of coffee and cocoa," Agriculture Minister Coulibaly Sangafowasaid at a news conference, adding the timetable for implementing the reforms had not been finalised.

At the moment Ivorian farmers have no guaranteed income from their cocoa, and have often complained that they are receiving too little from merchants in the countryside to reinvest in their plantations.

An effort to reform the sector by throwing out a decade of liberalisation has been held up by years of political instability in the West African state, including a brief civil war that followed November 2010 presidential elections.

The International Monetary Fund and World Bank have set cocoa reform as a key condition for debt relief.

Ivory Coast produced more than a third of the global cocoa crop in the 2010-11 season. The 2011/2012 campaign has already started and the government has said it should be seen as a period of transition for the reform.

The minimum guaranteed price plan will involve forward selling of a portion of the forecast Ivorian crop as well as a system whereby exporters and processors give advance indication of their purchasing needs.

"The practical arrangements and timetable for its implementation will be defined in consultation with industry players," Sangafowa said. He added that the export tax structure for cocoa would also be revised.

On top of staving off a forecast decline in production, Ivory Coast's cocoa reforms are central to President Alassane Ouattara's strategy to revive the economy following five months of post-election conflict that killed thousands.

The Ivorian cocoa industry is currently run by the Bourse du Cafe et Cacao (BCC) and three other bodies. The reform would put the sector under the management of a single body.

Reuters