Outcome of the Pilot Project on Price Risk Management for Cocoa Farmers in Côte d’Ivoire
A three-day workshop on the outcome of the Pilot Project on Price Risk Management for Cocoa Farmers in Côte d’Ivoire was held from 11-13 May 2010 at the Hotel Ivotel in Abidjan, Côte d’Ivoire.
Funded by the Common Fund for Commodities, the Workshop was organized by the International Cocoa Organization in co-operation with the Comité de Gestion de la Filière Café-Cacao and COFORMEX SARL in Abidjan.
The main objectives of the workshop were to discuss the results of the Pilot Project on Price Risk Management for Cocoa Farmers implemented in Côte d’Ivoire between February 2006 and March 2008, to draw the relevant policy implications and to consider the potential for extending the project to Cameroon and Nigeria, two countries that, in common with Côte d’Ivoire, had liberalized their cocoa sectors.
The workshop attracted approximately 100 participants, with representation from the Common Fund for Commodities, the United Nations Conference on Trade and Development, the International Cocoa Organization, private consultants, organizations based in France, South Africa, the Russian Federation and Ghana as well as experts from cocoa co-operatives from Cameroon, Côte d’Ivoire, Nigeria and Togo.
His Excellency Mr. Calice YAPO YAPO, Minister of Commerce of the Republic of Côte d’Ivoire, was the keynote speaker at the opening ceremony of the workshop, while his counterpart, the Minister of Agriculture, was represented at the closing ceremony of the workshop by his Chief of Staff.
Day 1 of the workshop was dedicated to a review of the implementation of the pilot project, its constraints, results and lessons. Full debate took place among the representatives of local cocoa co-operatives involved in the project and other experts on issues related to training and capacity building in price risk management as well as on technical aspects of the project.
On Day 2, presentations were made by the representatives of the CFC, UNCTAD and other invited speakers on the causes, effects and implications of cocoa price volatility for governments and farmers as well as on the market instruments available to tackle it. Representatives of the cocoa sectors in Cameroon and Nigeria also provided insight on their countries’ problems in trying to address cocoa price fluctuations and the instability of farmers’ incomes. This was followed by an in-depth discussion of the issues concerned by the participants.
The workshop concluded on Day 3 with a field trip for all participants to some cocoa farms and warehouses located outside Abidjan.
The outcome of the Workshop was agreement among the participants on a number of important issues:
- Firstly, that liberalization of the cocoa and coffee sectors had been implemented without the required necessary preparation, leaving both governments and farmers in cocoa producing countries with insufficient tools to manage the (often excessive and damaging) fluctuations of cocoa prices at international level. Hence a solid capacity-building programme would be required to explain to the relevant stakeholders, in particular to farmers’ representatives and government officials, that instruments exist to assist them to cope better with price fluctuations and the resulting instability of their revenues from exports;
- Secondly, that governments should create the appropriate institutional, legal and policy framework to make price risk management tools accessible to cocoa farmers through strong and viable co-operatives; and
- Finally, it was recommended for the governments in cocoa producing countries to consider embracing price risk management as one of an array of options available to them to alleviate the negative effects of the prevailing high levels of instability of world market prices.
French version – Press release on Workshop on price risk management in CIV 20.5.10.doc