By Suliman Kamara, CEO of VADEMCO
Liberia’s cocoa sector has faced numerous challenges since the post-Civil War era, despite the excellent work of international donors and non-governmental organisations (NGOs) working in the sector.
NGOs and their donor partners such as USAID, USDA, Mercy Corps, IFAD, Solidaridad of West Africa, ASI (GROW), and IDH have invested heavily in the sector since 2007, but the situation remains fragile.
Why is the sector so fragile? There are many reasons, including:
- A lack of policy direction, no national goal, and poor government support (human and financial) have led to weak regulation in the cocoa sector.
- Local cocoa commodity “exporters” (mainly Lebanese and Indian Merchants) attempt to deter and frustrate external buyers from conducting business in the Country to protect their illicit business practices, including exploitation of the smallholder farmers who can’t afford a decent living.
- Even skilled and knowledgeable farmers fail to produce good quality cocoa beans due to a lack of incentives to adopt good agricultural practices (GAPs);
The Liberia cocoa has a bad reputation in the external market for the poor quality of cocoa beans produced, despite the huge investment being made by donors and their implementing partners in the Country.
Because of the donor’s investment, smallholder cocoa farmers have learned Good Agriculture Practices that has produced high-quality cocoa, but they have no incentive to maintain this quality.
But why is this high-quality cocoa not surfacing in the external/International market? The shady local exporters, predominately of Lebanese and Indian origins, will purchase the high-quality cocoa from the smallholder farmers and then mix it with poor-quality cocoa from Côte d’Ivoire.
They cannot achieve a fair average quality by using the poorer quality cocoa on its own. Still, when mixed with the Liberia cocoa, they can achieve a fair average quality (FAQ). However, under this process, the real quality of Liberia cocoa is hidden.
Where is the motive?:
- These shady exporters want to deter competition from larger cocoa companies by propagating the myth that Liberia cocoa is only poor quality.
- They send buying agents to the farms to offer quick money on cocoa that is not fermented or properly dried. The penurious farmers cannot resist the quick cash, so the shady companies continue to ensure they have no incentive to increase quality.
- Since 2008, 20 million hybrid cocoa seedlings have been provided by donor funding projects. Yet, the number of farms and production levels remain flat. 13 years on from the investment, annual production stands at a disappointing 10,000 tonnes. This low production number suits the smaller shady exporter and keeps out the bigger chocolate companies, who cannot justify operating in a country with such small output.
- Of course, the existing exporters have no incentive to change or improve the situation and continue to operate a lucrative business for them, at the expense of farmers and with impunity from the government.
The entire business of cocoa in Liberia depends on these farmers. Although they are identified as key stakeholders in the industry, many Liberian farmers earn less than the World Bank poverty line income of US$1.9 per day. Without addressing the underlying issue, calls to increase output only exacerbate the problem.
Liberia is geographically situated in the cocoa-producing countries in West Africa – Côte d’Ivoire, Guinea and Sierra Leone. Thus, Liberia serves as the yoke of an egg. The poor quality of cocoa beans enters Liberia from the western region of Côte d’Ivoire to increase the export volume of the merchants.
Making the Grade
The merchants mix the Liberia high-quality cocoa beans with the poor quality imported beans to give them in the international markets an FAQ grade. At the same time, some of the quality cocoa beans are transported from Liberia to Sierra Leone and Guinea, where they are used to increase their high-quality export volume.
Liberia’s government has no interest in the cocoa sector, as evidenced by its inability to improve conditions or implement policies designed and crafted by partners and donors.
Underfunded and dysfunctional, these institutions do not fulfil their responsibilities. The government does not undertake a national survey, and there are no statistics on cocoa production or land cultivation. Some data from donors is available from their partners, but these are not entirely accurate.
Foreign export merchants are not interested in becoming members or affiliates of the Liberian Cocoa Exporters Association. They do not respect the Liberian Agriculture Commodity Regulatory Agency (LACRA), which has a statutory responsibility to oversee the sector. As a result, the Liberian cocoa sector seems to be controlled, at least for now, by Lebanese and Indian merchants.