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MONDELĒZ AND OLAM OUTSMARTING FARMERS. CONCLUDING THOUGHTS

Part three ……

To Mondelēz/Olam

I am not writing this article to virtue signal. I may have done precisely if not more of what Mondelēz/Olam is doing. As a for-profit organisation with shareholders to please, with your staff demanding salary increments and the rise in risk posed by health-conscious eating to your business model and cost control strategy, it seems as if it is a fair thing to do.

However, my problem is that Mondelēz/Olam wants to benefit both ways by pretending to be a stakeholder capitalist. Every action of theirs reinforces their shareholder capitalist motives. They can’t publicly declare deforestation a concern and run to Indonesia to commence large-scale commercial cocoa farming.

You can’t embark on a corporation-led cocoa production through a potential legal land grab from smallholder cocoa farmers in Indonesia to drive down cocoa prices, worsen the farmers’ livelihoods, potentially strip the farmers of the only transferrable assets they have (Land), and pretend to care about the livelihoods of smallholder cocoa farmers. Olam and Mondelēz should stick to either stakeholder capitalism or shareholder capitalism to face the cost and benefits of that decision.

To Smallholder Farmers in Indonesia

Do not sell the only transferrable asset (Land) you have that can be transferred from one generation to the other. Mondelēz/Olam and other foreign companies may offer you a lump sum of money to buy the land and promise you they will employ you back to earn wages on your land. This has a damaging long-term effect on your economic and social livelihoods.

Remember, You don’t exist in a welfare state like Europe, where it’s free to access school, medical care, good roads, incentives, etc. Your land can serve as collateral for any loan you may want to secure in the long future. Just think about it, “If your land weren’t valuable, they wouldn’t be offering you much money for it. Suppose these companies are interested in supporting producing countries that are heavily poor to use smallholder farming as a poverty alleviation strategy. In that case, they should be willing to leave cocoa cultivation to smallholder cocoa farmers. Let’s make cocoa a smallholder business.

To Indonesia Government

Foreign direct investment may theoretically be a good way of gaining foreign exchange, employment, knowledge transfer, etc. However, these benefits sit in economics books rather than in practice. Allowing for legal land grabbing from local farmers is directly handing over power and control to foreign powers. This potential free handing over of power to foreign firms will let them sit at your policymaking table.

You would have granted them the direct and indirect influence to lobby for changes to your land agreement and policy to suit their position. Also, allowing for commercial cocoa farming by a foreign organisation means kicking smallholders out of business. As stated above, agriculture has reduced drastically as a percentage of Indonesia’s employment. You have already lost over 5m farmers due to the unattractiveness and unprofitable nature of farming. Commercial farming would further wreck the business model of smallholder farmers and increase the global supply of cocoa beans to drive down the cocoa price, which intends to affect the foreign exchange you may have thought you would receive.

Mondelēz/Olam may have indirectly promised to outsmart Cocoa Farmers and their governments, but to my surprise,  they over-delivered.

To the Smallholder Ghanaian Cocoa Farmer

I don’t know how you would have been able to escape, especially if you have a regulator who cares more about the quantity of cocoa produced than activities happening within the cocoa-supply chain which has an adverse long-term effect on your livelihoods. I would challenge you to ask the cocoa life programme managers why they didn’t provide you with the new technology they developed out of the knowledge they gained from you?

Did Mondelēz set you up to harvest your understanding and essential data to use it against you? Oh, I know you never knew that Mondelēz would come down to compete with you in the cocoa production aspect of the value chain. I am sure suing Mondelēz may be less likely, but we have a little chance though weak, to prevent history from repeating itself. If any of these companies come to your village to implement any of these programmes, claim to want to build your capacity, encourage women to go into farming, offer your machetes, kindly ask them what you hope to gain from these freebies in the long run?

Can we sign a contract on how you plan to share anything of economic value you gain from this project you are implementing with us in both the short term and long term? And perhaps the ability to challenge you legally if you harvest this knowledge from me with the intended purpose of becoming a competitor. That, at the need, is a bad faith act from Mondelēz.

Mondelēz/Olam may have indirectly promised to outsmart Cocoa Farmers and their governments, but to my surprise,  they over-delivered.

Photo source: Extracting the cacao beans after harvest | February 23, 2015… | Flickr

Author

  • Kwame Kwateng

    organisation:

    Agricultural Trade Policy Analyst | Cocoa-Chocolate Industry Expert | Digital & Industrial Project Manager | A persuasive Negotiator | Columnist. Email: Kwame.a.Kwarteng@gmail.com / Kwame.Kwarteng@PolicyCON.com Twitter: @asamoahpeters

Series Navigation<< THE CONSEQUENCES OF MONDELEZ/OLAM’S PROJECT ON COCOA FARMERS AND THEIR ECONOMIES

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