ABIDJAN, Ivory Coast (AP) — The world's largest cocoa producer is restructuring the industry in an effort to guarantee Ivory Coast farmers a minimum price, though some economic experts are already warning that the plan won't entirely protect growers from market volatility.
Agriculture Minister Sangafowa Coulibaly said Thursday that the government will create a state-controlled company that will guarantee farmers 60 percent of the international cocoa price. The World Bank has said that farmers in Ivory Coast currently receive just 40 percent, while growers in other cocoa-producing nations receive between 60 and 70 percent.
Coulibaly said the "deep reforms" would better regulate an industry that has left farmers at the whims of the market.
However, Nicholas Depetris Chauvin, senior adviser at the Ghana-based African Center for Economic Transformation, said the scheme won't isolate farmers from international price fluctuations.
"This scheme will not solve the problem of volatility which is often a big concern for small holders," he said.
Ivory Coast produces 35 percent of the world's cocoa, and combined with coffee, the cocoa sector accounts for 15 percent of GDP. Cocoa production here hit a record 1.48 million tons last year despite a months-long political crisis that brought the country to the brink of civil war.
Both the International Monetary Fund and the World Bank have made cocoa reforms a condition for debt relief. However, World Bank spokesman Taleb Ould Sid'Ahmed said that reform has been slowed by pushback from exporters.
"The exporter wants more money and wants to exploit — it's a question of the interest of the producers. There is a lot of money in this sector," said Sid'Ahmed, who was not able to comment on the content of the new reforms because he said the World Bank needs to review the strategy first.
Debt-relief aside, cocoa experts and economists express mixed reactions to the plan.
The president of the Washington, D.C.-based World Cocoa Foundation, William Guyton, says the government's move "sounds encouraging ... the language is in place."
Guyton says he hopes the full plan will include investment back into the cocoa sector, agronomic training, and a plan for farmers to diversify crops, so they are not only dependent on cocoa.
In the 1970s and into the 1980s, Ivory Coast's government put heavy taxes on cocoa and invested the money in infrastructure and education. But international cocoa prices collapsed, and the government eventually enacted reforms to liberalize the industry.
The crash in the price of cocoa marked the start of Ivory Coast's eventual descent into civil war, initially pitting the original owners of the cocoa fields against the immigrants who had bought their plots.
