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Friday, December 14, 2018

On the ground in Cameroon—Incentivising sustainable and quality cocoa


By Sona Ebai Jr.

Sona Ebai

 

 

 

 

Opinion: Despite billions of CFA francs being spent to train farmers, more action to achieve good quality beans is needed with fierce urgency.

 

The Cameroonian government plans to pay farmers a premium totaling up to 1 billion FCFA (US$ 1.8 million) to enable them produce higher quality cocoa—good fermented (GF) grade I. These funds have been generated from a levy of 5 CFA francs/Kg placed on cocoa exports. This government initiative will reward and incentivise farmers as over 90% of cocoa beans from Cameroon destined for international markets in the last few seasons were considered grade II quality, causing its price to be discounted by about 200FCFA per kilo. A ceremony for the distribution of these premiums is to be organised and the criteria for distribution to each farmer would be based on the information extracted from the ‘Livret du cacaoculteur’ which was conceived and distributed by the Coffee and Cocoa Council (CCIC) and filled out by farmers. Good quality cocoa is viewed as the antidote to inferior prices, and countries with a reputation for exporting high quality beans, such as the Dominican Republic, were not as affected by the crisis which the sector endured in 2017 when farm-gate prices fell by close to 40%.

While premiums are a good incentive for quality production, perhaps a more pressing question is how effective an annual payment to farmers is compared with the implementation of a comprehensive set of reforms in the drive to bring about lasting change and ensure that high quality Cocoa from Cameroon becomes the norm? It is a sad reality that farmers are more inclined to sell low quality cocoa on the spot market at give-away prices in order to reduce their costs—including time and effort invested in optimal post-harvest practices—in order to resolve immediate personal problems. This phenomenon is facilitated by the fact that there is no higher price for better quality. Therefore, there is no incentive at the farmgate unless farmers can afford to be patient till premiums are paid. Given the urgency of the problems farmers face in their rural communities, the present value of money to them has always been more attractive than future cash flows.

Comprehensive reforms could include a return to stabilisation:

Stabilisation means cocoa prices would be homogenous—subject to a number of quality criteria—and would hedge farmers from international price volatility. This means local traders would be unable to artificially manipulate prices and there will be no incentive to buy low quality cocoa at the same price as good quality in order to compete for tonnage as it is in the current liberalized market. It also means farmers can predict their incomes and become more eligible for financing from microfinance institutions. With access to financing, farmers could also have better access to personal loans guaranteed against their output and be better able to manage personal commitments like health care and education. Ultimately, less volatile prices product premiums should incentivise farmers to produce higher grade cocoa— grade I –instead of poorer quality beans with defects like mould and slate.

 Mega-structure—New approaches could be explored to salvage cocoa quality instead of business-as-usual.

The government is currently deliberating the fusion of the Cocoa Development Corporation  (SODECAO), the National Cocoa and Coffee board (ONCC) and the Cocoa and Coffee Development Fund (FODECC) which could create a mega-structure with sufficient funding and authority and open to important innovative ideas for quality cocoa such as:

  • A new state-of-the-art cocoa research and statistics centre;
  • The construction of storage and conditioning facilities;
  • The construction of post-harvest facilities like those built by the CCIC (at Mintaba and Si Manyai in the Centre region) in all cocoa producing zones.

 

Concluding remarks—appealing to niche markets

Further to the above, this briefing note supports and recommends the extension of a large-scale modernized version of the CCIC’s ‘Centre d’Excellence’ post-harvest system throughout cocoa production zones and for cocoa farmers to be responsible only for ensuring good agricultural practices (GAP) which improve yields.  Harvested cocoa pods could then be taken for high quality post-harvest processing (fermentation and drying) by highly-trained technicians in these facilities, to ensure high quality beans, before being returned to farmers who can then sell and pay a percentage of their profits to the facility. By so doing, experiments could even be carried out on the use of certain cultures of yeast and bacteria on cocoa beans during the fermentation process to give specific qualities and flavours which could appeal to niche markets. All drying could be controlled to ensure that humidity is less or equal to 8% as per international standards. Moreover, cocoa pods (waste) could be easily collected, after beans are extracted and processed in another plant, to produce energy which could power the homes of farmers and ameliorate their living conditions. With this innovation, not only will farmers enjoy positive externalities with regard to renewable energy for the sector but the quality and reputation of Cameroon’s cocoa on international markets could be restored.

 

The author is Assistant Director for sustainability at Telcar Cocoa, Cameroon

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