July 29, 2009 / 10:37 AM / 8 years ago

Ivorian cocoa reform seen urgent, delayed by polls

<p>Ivory Coast's President Laurent Gbagbo (R) and Prime Minister Guillaume Soro at Yamoussoukro airport to welcome visiting Ghanaian President John Atta Mills, April 7, 2009.Luc Gnago</p>

ABIDJAN (Reuters) - Pressure is mounting on Ivory Coast's authorities to reverse a decade-old liberalisation of the cocoa sector and restore a central oversight body but reform is very unlikely before polls due in November, officials said.

The perception that the liberalisation has benefitted a select few has long fuelled calls for reforms. There have been few concrete steps and repeated delays in elections mean radical change in the top cocoa grower is unlikely for now.

Although the brief 2002-2003 civil war has had little direct impact on cocoa output, the country's politics remain mired in rows over the disarmament of rebels and the holding of long-awaited presidential elections.

"Everyone wants the establishment of a single structure that will look after the marketing and the management and set a fixed price for cocoa during the coming seasons," said a senior exporter who had just attended a conference on cocoa reform.

"If you look carefully, (they want) a return to the stabilisation during the time of the CAISTAB," he added this week, referring to the organisation that oversaw the entire sector until is was disbanded by liberalisation in 1999.

The CAISTAB was replaced by four agencies meant to manage arms of the cocoa industry, enforcing regulation, regulating taxes, marketing beans and helping farmers improve production.

Instead, allegations of corrupt administrators, lack of support for farmers and low prices paid to growers have fuelled criticism and farmer apathy. Senior administrators were arrested last year and an interim body is now running the sector.

Interim managers are due to publish reform plans in August.

A poor 2008/09 crop after power struggles among administrators intensified calls for change.

Volumes of beans to arrive at ports ready for shipment are around 15 percent below last season, and farmers say they have not seen the benefit of world prices which, at Wednesday's level of 1,862 pounds per tonne, are 25 percent higher than at this time in 2008.

"Having seen the failure of liberalisation, which only benefitted the exporters, what we, the producer cooperatives, want is a fixed price," said the head of a cooperative, who asked not to be named.

"We don't want all these structures that bleed our money and don't do anything for us when the prices are low," he added.

Farmers in Ivory Coast receive among the lowest prices in the world, well below growers in neighbouring Ghana. Its cocoa output accounts for around 40 percent of global consumption.

ELECTIONS DELAY REFORMS

Donors including the World Bank have long complained about high taxation and tried to link cooperation agreements to cocoa reforms but there has been little progress.

"If I am elected president, I will bring back the CAISTAB, I promise, because liberalisation has not helped the farmers," said Alassane Ouattara, a leading candidate standing against President Laurent Gbagbo in polls that have been delayed many times but are now due on November 30.

Even though many in the sector support the idea of restoring an organisation like the CAISTAB, one exporter warned of the complexities of reversing liberalisation completed years ago and suggested measures like reducing tax levels were more practical.

Having seen several election deadlines come and go, many analysts are beginning to doubt the latest date will hold, despite progress made towards registering voters, meaning any changes to the cocoa sector are likely to remain on paper.

"We aren't going to see any change this season, or even next ... unless there is an election, they won't be able to do anything," another exporter said.

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