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Jamaican cocoa farmers’ incomes boosted by pragmatic solutions while legislation is pending

03 June 2013

According to the Jamaican press, the president of the Jamaican Cocoa Farmers’ Association (JCFA) has said that “the JCFA has been paying its members up to J$2,500 [€19.68] per box for their supplies, which is J$500 more than the J$2,000 price paid by the Cocoa Board”. However, “JCFA bought only 87.5 tonnes of cocoa” in the 2012/13 financial year, around 7% of production. Given the financial difficulties of the state-run Cocoa Industry Board – which has seen farmers holding back supplies as a result of arrears in payment – JCFA has had to announce that it can only buy cocoa from JFCA members. At present, payments to JCFA members are made in a timely manner, through a well- structured payment system (paid within 2 weeks direct to their bank accounts). JCFA is, however, open to accepting new members upon payment of membership fees.

JCFA sees readily available opportunities for the marketing of Jamaican fine/flavoured cocoa in Belgium, Germany, Japan and Saudi Arabia, noting that the only limit is the availability of supplies. For the coming year the Association has already committed its available production under specific contracts, obtaining prices that are reportedly among the highest in the Caribbean region. It is these forward contracts that support the JCFA’s ability to promptly pay farmers at levels 25% above the Cocoa Industry Board price.

JCFA is working with the Cocoa Industry Board to boost overall cocoa production by purchasing and distributing “24,000 seedlings… to all cocoa farmers, regardless [of whether] they are members of the association”. However, farmers must undertake “all land preparation work before receiving the seedlings”.

Plans are currently under way in Jamaica to “demonopolise” the sale of cocoa beans. While the new legal arrangements for licensing cocoa beans exports have not yet been finalised, the JCFA has been able to commence direct exports with the permission of the Ministry of Agriculture.

Editorial comment

Shifting from a state-controlled marketing and export system to producer-run or private-sector-based marketing systems is by no means a simple task. In the case of Jamaica, a pragmatic approach to this process of reform appears to have been adopted, with the JCFA being allowed to gradually build up experience alongside the Cocoa Industry Board. This can be seen as a positive step. JCFA appears to be pushing the frontiers of new, dynamic markets and crafting new and qualitatively different marketing arrangements, to the benefit of its membership. By so doing, the JCFA has been able to overcome one of the most significant hazards for cocoa farmers – price and market uncertainty. JCFA also appears to be achieving some success in mitigating risk on the input side, which should reduce problems of output volatility.

The price benefits of transitioning to private sector organisational forms such as the JCFA are clearly in evidence, but of even greater significance is the shift towards more market-determined/market-oriented engagements with the rest of the world that is taking place within the marketing board. Producers may then benefit from having two organisations involved in marketing cocoa, perhaps developing expertise in serving different market components.

Given the gradual moves at the WTO to develop disciplines on the activities of state marketing boards, undertaking this transition now towards producer-run marketing could prove invaluable in the long term.


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