Ivory Coast eyes regulation to stem cocoa declines

By Ange Aboa and Loucoumane Coulibaly

ABIDJAN (Reuters) - Top cocoa producer Ivory Coast is poised to re-regulate its agriculture sector in the coming months to try to reverse output declines that have put the country's main revenue generator at risk, government and opposition sources said on Friday.

The move could mark a return to a system abandoned a decade ago in the West African nation in which the government sells the lion's share of the nation's cocoa production forward onto the world market and fixes prices to farmers.

"It is not yet formalised by the president, but it is very likely that we will return to stabilisation of prices to guarantee a minimum price to growers," said a source with knowledge of the government cocoa reform committee's plans.

Analysts have said such a reform could encourage a revival in the country's slumping cocoa output by providing growers with a bigger share of the proceeds from their crops amid widespread complaints they are being underpaid.

In the current system, the government announces an official price during the season, but it is used only as a guideline and actual prices are determined by the domestic market.

A government official confirmed that plans to reform the cocoa sector were afoot, but did not give details.

"There will be a strong structure for controlling the many aspects of the sector," said Tito Tiehi, an official in President Laurent Gbagbo's agriculture programme. "We will implement a policy to defend Ivory Coast's place as top producer and even win back market share worldwide."

The country's cocoa industry, dogged by underinvestment in the wake of a 2002-03 civil war, recently closed the book on its worst harvest in at least five years, underpinning a rally in world prices to 30-year highs.