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The “quiet evolution” of Cameroon’s cocoa sector

06 October 2013

An interview with Philip Sigley

Philip Sigley is Chief Executive of the Federation of Cocoa Commerce as well as Chairman of Cocoa Research UK Ltd and Chairman of the Federation of Commodity Associations. In May, he was invited by the Conseil Interprofessionnel du Cacao et du Café (CICC) to attend the Rencontres professionnelles Europe meeting in Cameroon, and speaks now about his visit to the country.

Q: How do you perceive the cocoa situation in Cameroon?


It is quite a complicated situation, as is the case in most cocoa producing countries. Cameroon cocoa trades at a discount to other West African cocoa. After liberalisation of the cocoa sector in Cameroon, over time people just generally seemed to give up on cocoa quality, as farmers were not rewarded for the extra work they were told they needed to do, and yet their cocoa was still finding willing buyers. In Ghana, for example, cocoa achieves a good premium because of the hard work performed by the farmers within a system which is conducive to production of good-quality beans much sought after for the important taste profile of chocolate. Of course, state intervention still prevails in Ghana to a large extent, and is a source of encouragement to produce good quality in Ghana. Côte d’Ivoire has responded to the deterioration of quality since liberalisation in 1999, and for the past 2 years there has been a significant improvement, particularly as a result of a focus on proper drying. The issue of drying will come into the Cameroon context later.

So, although with liberalisation people gave up to some extent on trying to produce too good a quality, the cocoa world is concerned about the availability of sufficient quantities of quality cocoa beans to sustain projected growth in demand for chocolate products, and is now responding to try and draw a line in the sand on quality, which is actually something that the Federation of Cocoa Commerce was arguing for just after the Côte d’Ivoire liberalisation proposals were promoted around 1997 and again in 2000 during the launch of the Sustainable Tree Crop Programme.

In Cameroon, as a result of the way the market has sent poor messages on quality to the farmer, and with the consequent farmer apathy, we have good and bad cocoa that is mixed together. Cameroon produces ‘fair fermented cocoa’ as opposed to a ‘good fermented cocoa’, as measured by the level of defects. You get what you pay for. Cameroon wants to produce more cocoa and wants better prices. And it seems to have come as a surprise to many people in Cameroon that their cocoa is tagged ‘fair fermented’. The problem is how to respond to improve the situation.

Q: Is it a question of reputation or is it rather a problem of quality?

You earn your reputation. Cameroon cocoa is now synonymous with a quality which is not generally used for production of chocolate liquor but which is a bean used by the pressing industry to be blended with beans of named origin. ADM, Cargill, Barry Callebaut and others use a lot of Cameroon beans, so it actually goes into a recipe.

Conditions in Cameroon are difficult, particularly in the south-west region where there is high rainfall, which has an impact on quality due to the lack of opportunities for sun drying. The problem is exacerbated by artificial drying using ovens that are defective and can lead to the generation of a food safety risk due to PAH (polycyclic aromatic hydrocarbons), which is a major concern for the EU. Drying ovens have fallen into disrepair. There is now a project with the Ministry of Trade and the CICC to rehabilitate some of these ovens.

Q: How old are the ovens?

Many of the ovens were provided by the EU about 8 years ago, because the PAH problem and its potential impact on human health had been identified as a risk for cocoa about 10 years ago. But EU legislation relating to maximum levels only became effective from 1 April this year, and suddenly Cameroon realised that they were not prepared for the potential impact on exports to the EU and the need to ensure farmers were doing their best to address the situation. As the EU is continuously monitoring and legislating for tighter food safety limits, the biggest problem for producing countries is how smallholder farmers are able to respond to these increasingly higher quality demands that their customers have to deal with.

So these challenges of food safety and quality, productivity and the fragmented nature of the farmer organisations in Cameroon are being evaluated and a strategy is being developed by CICC. Currently, there are initiatives to regroup farmers into larger productive units so as to get better results, including an improvement in prices.

Q: Are the producers aware of the benefits of regrouping?

This is part of the exercise taking place. Some producers do not want to be in any group and will accept receiving lower prices for their cocoa, as they have little confidence in some types of farmer groups against a history of bad press, with allegations of corruption and so on. So the question is: can professional organisations in Cameroon successfully regroup so as to demonstrate to farmers the benefits of regrouping and persuade them to engage in the development of greater economic activity and commercial returns for their endeavours?

But this is easier said than done. Not only do you need to regroup them, but you need to provide evidence to farmers and their families that an improvement in their quality of life, for example, is possible and that rural communities can genuinely achieve a better economic, social and environmental model. Within Cameroon, a lot of people will have to work together to put in place what will facilitate this “quiet evolution”. Growing more cocoa on less land is key.

If you look at the sustainability of smallholder farmers, there is a fundamental challenge: there are reportedly 600,000 cocoa farmers producing some 240,000 tonnes. If farmers get £1,000 a tonne, and if you divide that £240 million by 600,000 farmers, the numbers are not very appealing!

But what other crops can they produce? Food crops? Cash crops? Another question is: how do you define a cocoa farmer? The popular definition would be that a cocoa farmer is someone who earns more than 50% of his income from cocoa. But when you look at the 600,000 farmers and when you start talking about sustainable livelihoods, you can see the challenges of having to feed so many mouths on a limited amount of money....

Q: Can Cameroon modify its producing regions like Brazil did in coffee, so as to enhance growing and export conditions?

I am aware that the cocoa authorities are looking at areas that would be additional production areas rather than replacement areas, and there is also some appetite to encourage higher production in traditional cocoa areas where productivity has reduced in recent years. An FAO study suggests that worldwide there are 8 million hectares of land committed to cocoa. If farmers each produced 1 or 1.5 tonnes of cocoa per hectare (generally regarded possible as a target), we would get 8 to 12 million tonnes of output while world consumption is about 4 million tonnes, and it could reach 4.5 or 5 million over the next few years. So, we need to try and use the power of organised famer groups to manage cocoa productivity on the one hand, avoid committing further land to cocoa, but at the same time and in terms of a sustainable cocoa economy consider the other income-generating opportunities that exist from other crops.

A further challenge is that with the growth of the internet and mobile phones, young people are more attracted into activities outside the rural areas. We want to see the Millennium Development Goals achieved for cocoa communities, but the broader picture necessitates meaningful engagement with public services and infrastructure in rural areas that has been neglected for a very long time.

Q: The CICC is making huge efforts to attract the younger generation to go into cocoa and coffee...

This is very encouraging. But CICC initiatives need to be very robustly supported by the government. By the Abidjan Cocoa Declaration last year, it was agreed that producing countries would develop national plans and a real strategy for what they regard as a cornerstone of the rural economy.

The achievement of sustainability in cocoa very much comes down, in my book, to the regrouping of farmers into effective units, and professionalisation and serious work on the infrastructure and public services that support rural areas.

Q: Is diversification on the farm what is needed?

I think it is part of the equation. Cocoa can be seen as a platform for Cameroonian cocoa farms to support production of other crops to give a broader stream of income which would provide more resilience against world market price volatility. Vietnam is starting to cut down cocoa trees because they are unhappy with the returns, just like Malaysia did in the ’80s looking for better earnings in palm, for example. So there are many scenarios.

Q: As you said earlier, the EU is getting stricter on sanitary regulation. Do you think a country like Cameroon should just look into other markets?

The question is to match your output to the market. If you know that the output of a particular area might cause problems in one particular market, than it might be better to check that production very carefully. You might report closely, or the best strategy may be not to send that production to that market where there is a high degree of regulation.

But at the end of the day, the EU is a huge market and Cameroon would not be well advised to turn its back, given the huge chocolate consuming population there. But as new markets emerge, one needs to take a careful look into the opportunities, if of course your competitors want to do that as well. I think there is generally a space for everybody.

Q: Producing countries are always the followers, never the drivers...

They are the sellers and the customers are somewhere else. This is the problem. How can Cameroon dictate what Brussels thinks is healthy or not healthy? If they were better equipped, they could probably respond to the proposed EU legislation much quicker. Many countries come together with the industry and the ICCO (the International Cocoa Organisation) to lobby on food safety issues to question the data that has been put forward.


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