Transforming the Caribbean Fine Cocoa Sector - TRINIDAD

To effect a major transformation there is a need to change the vocabulary and thus the conversation

Repeatedly local people say the main issue contributing to the decline of the fine cocoa sector in Trinidad is a lack of labour - people unwilling to work in the cocoa fields.

But the real issue is that the entire Industry & Business Model around which the Cocoa Sector was built - over 200 years ago - is, unsurprisingly, obsolete. And no-one owned the responsibility to move the cocoa sector - commercially - along with the times and the externalities that have evolved in that time frame.

Trinidad now claims the parameter metrics to be a "First World" country with salaries and cost of living to match. In parallel, considerable urban migration has occurred and much of what is left behind in the countryside is not sustainable in this country's new economic reality.

No, the REAL issues facing Trinidad's Cocoa Sector (and agriculture in general) are about PRODUCTIVITY, VALUE-ADD and, resultantly, WAGE UNCOMPETITIVENESS. And in the same way the country has been industrialized  - thanks to oil and gas - so too should the agricultural sector move into the modern 21st Century. Through incorporating technology into farming practices, extracting value-add through more agro-processing and via higher incomes from quality assurance, branding and specialization.

What the Trinidad Cocoa sector has still going for it is a wonderful legacy of world class quality fine cocoa beans, top cocoa genetic research, accompanying cocoa gene bank and people still passionate for COCOA.  There is cheap power available in the country and a dynamic entrepreneurial chocolatier group who are making their own way in converting cocoa beans grown locally into value-add drinks and foods.  

The challenge remains in the countryside where the average age of the cocoa farmer now probably exceeds 60 years old. In order for them to pay third parties the going wage to tend to their land and trees - bush clearing, pruning, harvesting etc. - they have to make a lot more money from the ENTIRE associated commercial activity.

Ideally, and a quick solution, would be to get a higher price for their cocoa beans harvested. This relies to some extent on the main buyer in the domestic marketplace - the Coffee and Cocoa Industry Board. There have been some positive changes here in recent times.

But the cocoa farmer should also ensure that the yield the tree per tree is maximized through good land and crop management - planting high yielding trees, pruning them, fertilizing them, reaping properly, minimizing losses, ensuring optimal pollination etc. The solution here is to have teams of workers specialized in these skills and equipped with modern tools and vehicles to execute the work quickly and efficiently. Automation of Labour and Specialization of Labour.  

The farmer could additionally increase the financial returns from their farm by partaking in the processing of the beans themselves into value-add products - either as a collective of growers or some other arrangement with the end-processors. This solution moves the farmer from subsistence commodity growing to an aspect of an entrepreneurial agro-processor.  

Other income earning opportunities include incorporating tourism related activities and environmental related actions into the cocoa farming venture.  

The obvious question though is why with, Trinidad's access to cheap energy, hasn't there been industrial type transformation of the cocoa agricultural activity? All this could be about to change in 2013 with the proposal to build a Chocolate Factory in the country by the CFCF.

The Caribbean Fine Cocoa Forum (CFCF) is the leading organisation in the Caribbean innovating and implementing novel practical solutions to transform the fine cocoa sector into a sustainable entity.   

CFCF, with the support from Compete Caribbean Programme - funded by CIDA and DfID and managed by the Inter-American Development Bank - has submitted plans to mobilize stakeholders to build and operate this facility. This multi-purpose facility, centred around a mini-factory, will provide a game changing catalyst to the entire Caribbean cocoa sector.  

We eagerly await the development and implementation of these plans - see news and projects on the CFCF website at www.caribbeanfinecocoaforum.org.     

Transforming the Caribbean Fine Cocoa Sector - JAMAICA

I was recently asked on a radio interview by its presenter:

   "What went wrong with the Cocoa Sector in Jamaica that led to its long term decline?".

To which I replied:

  "In a single word - NEGLECT!!"

This is the story across most of the Caribbean, but for different reasons in each country. The Fine Cocoa Sector has been in decline in the Caribbean for about 20 years and has reached a critical cross-roads in some of these countries as to whether it will practically survive or not.

The Cocoa Industry Model in each country of the Caribbean is different and in most cases it is now obsolete and not fit for purpose.

For example, in Jamaica it is such that the small cocoa farmers (numbering about 20 thousand) and the Government Cocoa Industry Board (CIB) are fully inter-dependent.

But as a further complication there are no genuine cocoa farmers in that country - there are farmers (mostly owning lands less than 5 acres in size) who grow cocoa as one of several crops on an inter-cropping basis.  For them it is optional to grow the cocoa - but if they did grow cocoa they had to sell it to the CIB  which had a buyers monopoly historically. (This has only changing slowly recently - since 2010 or so)

Over time the trust relationship between the small farmers and the CIB has deteriorated due to delays in payments, stagnant prices paid to farmers, probable abuse of monopoly, lack of re-investment in the CIB asset base and a general drifting out-of-touch with world cocoa market dynamics.  

This declining state of affairs was not in CIB's best interest either.

It had (and still has) massive Dryer / Fermentaries (only 2 of 4 survive in the country) which required huge volumes of wet cocoa bean supply to operate efficiently and yet the CIB did not grow much wet cocoa beans itself.

This considerable fixed-cost asset base and increasingly high cost of operating antiquated dryers (fuel oil fired and electric) meant that its operational profit came under pressure many years ago.  

 

And where are we now in 2012 - with a good world price for both bulk and fine cocoa prevailing?

Most Caribbean countries are unable to take advantage of the favourable market conditions and in fact have a cocoa sector that is stuck in a kind of time warp.

The challenge is how can the Caribbean Cocoa Sector be RADICALLY transformed to capitalise on a very favourable market trend  which is dislocating the traditional value-add cocoa derivative markets and cocoa processing industry globally.

A leader in this area is the Caribbean Fine Cocoa Forum (www.caribbeanfinecocoaforum.org) which hosts Annual International Fine Cocoa Conferences & Expos in the region.

For Jamaica, the key challenge is how to increase productivity across the value chain - yields of individual cocoa trees, performance of cocoa fields in aggregate, output of dried fermented beans from processing facilities, value-add in follow-on products derived from locally grown beans.

And how to increase  income to growers of the beans - the small farmers who grow cocoa as well as other crops? Through eco-tourism and/or cocoa derivatives and/or environmental value

And how to manage the liberalisation of the local market for buying and selling cocoa without MAJOR domestic disruption to farmers growing cocoa (i.e. avoid CHAOS) which has occurred in some African countries previously

All this in the context of a global paradigm shift in cocoa at the end of its traditional value chain - eating chocolates etc.

   - Bulk Cocoa may be a commodity but Fine Cocoa is NOT (if it ever was)!!

   - The top end of the Chocolate market is segmenting and fragmenting

   -  New micro-processors technology is facilitating major changes in production methods and new products and distribution channels are opening up

   - Some Chocolate and other cocoa derivatives are not perceived as a luxury sweet anymore but   as a health food and even a super-food to some.

   - Large emerging new consumer markets in Far East and elsewhere

In conclusion, as we currently look at things in 2012, the future market for fine cocoa looks very promising globally.

However the challenge is how to drive and manage the quantum-leap change now required in the Caribbean countries - who will do it? how will it be executed? when will the actions be coordinated?

The Caribbean Fine Cocoa Forum (www.caribbeanfinecocoaforum.org) has conceptualised some interesting projects and initiatives in this area which it is currently implementing with local partners.

These include the R.E.C.R.E.A.T.E project in Jamaica, the Mayan House of Cacao & Chocolate Museum in Belize and the Cocoa POP project in Trinidad.

  

Transforming Caribbean Rural Economies (Vocational Training)

TRANSFORMING CARIBBEAN RURAL ECONOMIES THROUGH VOCATIONAL TRAINING

So the World Trade Organisation's ruling on trade and global competition resulted eventually in Caribbean islands, led by Jamaica, ceasing most of their shipped export of bananas to Europe in the early 21st Century. And what followed, in part, was the assigning of a portion of the EU aid budgets to such Caribbean islands to assist with the expected economic dislocation to small rural farmers and their communities. 

Some dislocation of the banana sector did occur and one of the projects that was developed to assist mitigating the effects was conceived by Vernon Barrett (Newer Worlds) on behalf of its client Human Employment And Resource Training Trust - National Training Agency (HEART-Trust NTA).

However, a few years on, the dislocation was not as negative as could have occurred and indeed what is now likely to happen (2012 onwards) is that the demand for bananas locally will grow to perhaps exceed what is was before exports to the EU from Jamaica ceased!!

Ironic, but not surprising because what happened was that in the private sector the large player there - Jamaica Producers (JP) - aggressively pursued a value-add development of the local banana sector. JP ventured into making bananas chips and other food processed derivatives for both the local and export market. Value-add from bananas and other locally grown crops. Perfectly sensible if you compare what happens in western diets with the simple potato being turned into chips and crisps and other such stuff which then sells at multiples of its original cost. Not sure how healthy it will be for the consumers but that is another matter for another article...
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But back to the Jamaican project - conceived and managed by Newer Worlds - entitled "Banana Sector Retraining Project" which ran during 2008 and 2009.

(See  http://en.wikipedia.org/wiki/Banana_Sector_Retraining_Project for more details)

HEART-NTA was, and is, a well respected VOCATIONAL institution in Jamaica established in the 1980's - initially to help train and educate workers employed in the growing tourism sector. However that was some time ago and it was interesting, in the conduct of the project, to see how that Institution had changed over the intervening years to 2008 - some 30 years.

On the positive side the HEART had a Project Division (led by Ms Liz Terry) which was receptive to doing this, its first EU funded, innovative project valued at about 330,000 euros. It delivery would expose some of the shortcomings of the institution but yet provide it with more market intelligence and identify needs and opportunity in field of vocational education and training. In the process of the project it serviced a long neglected constituent of the Jamaican society. Following the outcome of the project HEART appears to have taken onboard some of the learning points below and addressed some of its shortcomings.

 

Some of the key ORGANISATIONAL CHANGE issues are outlined below and for further information do contact Newer Worlds on info@newerworlds.com.

WHO IS REALLY THE INSTITUTION'S CUSTOMER?

At the time HEART seemed to be struggling with keeping itself focused on the needs of its primary beneficiaries - the trainees and students at its facilities. It was more interested it seemed with the EMPLOYERS of such people and these companies' needs. This was potentially conflicting, particularly when it came to people who were learning skills so they could be self-employed and as an Institution they needed to reconcile this post-project. Understandably because the employers and companies pay the HEART Institution most of its income (in the form of a Government administered tax) there was this divided loyalty which needed airing and resolution.

Resolution: HEART needed to carefully assess its role in inadvertently perpetuating the SOLE mind-set of "becoming an employee" to people seeking to earn a livelihood. People do have other options - self-employment or starting a business and CREATING employment. Self-employment is not for everyone but people should be able to be assessed for such a capacity and be encouraged to think along those lines as well. Other younger organisations in Jamaica were also servicing such potential and actual young entrepreneurs, so collaboration with them by HEART was also required going forward - for joined up thinking an provision of service nationally.

 

CAN WE ACCESS THE BENEFICIARY?

Although HEART does have physical facilities in many parts of Jamaica its reach is still not, unsurprisingly,  universal. In fact it is leaning more towards urban people - those in main (usually capital) towns in Jamaican parishes. So really rural people who are economically constrained still cannot, for the most part, afford to get to the venues where classes are held - in these towns. The cost of the taxi or bus fare alone and the time off earning a living is prohibitive to them.  In the project a stipend was allocated to beneficiaries to assist with these costs of attending training sessions.

Resolution: To deliver training in remote locations, HEART and others could perhaps invest in mobile units that can be used to serve as delivery platforms to travel to remote rural locations to deliver resource for training sessions - probably at physical venues such as church halls, 4H locations etc in collaboration with third parties who owned these assets.

 

WHICH COMES FIRST - VOCATIONAL TRAINING OR LITERACY?

There was another major constraint (self-)imposed by HEART in its ability to help people become skilled in a vocation. The prospective trainees had to attain a Level 9 in basic literacy (Maths and English) and UNTIL and UNLESS they did so they could not attend training in a vocational skill. This was so against the primacy of the need for such beneficiaries especially as they tended to be middle aged or older trying to earn a living.

What was the point - isn't it more important that someone can learn to do something with their hands and then earn a living than to exclude them from economic activity because they need to go back to basics....

Resolution: Provide methods of training delivery that are mainly visual and verbal and rely less on the reading of published material (audio-visual training followed by on-site witnessed visual & verbal assessment / inspection). At least this will fast track training possibilities, in the short term, to a wider range of needy semi-literate or illiterate beneficiaries.

 

WHAT IS THE NAME OF THE GAME ANYWAYS?

Finally the common-place politics of Institution building revealed itself - when it came to working with other organisations and institutions to assist beneficiaries. Some unnecessary barriers were being erected that were detrimental to these beneficiaries.

Institutions in the same country of Jamaica did not respect/acknowledge each other's beneficiary literacy assessment system at the expense of the beneficiary. This was SO WRONG.

Also you got the feeling sometimes that some local organisations were dangerously pre-occupied proceeding down a road to become a conventional type of UNIVERSITY - primarily for the prestige and egos of its administration - and not staying focused on the needs of the beneficiary. This happened in the UK where many POLYTECHNICS in that country thought they should become re-branded as Universities in the 1980-90's primarily because the association with teaching VOCATIONS had a stigma of inferiority associated with it.

Let us hope the same doesn't happen in Jamaica or elsewhere in the Caribbean. We need people who can do things that are valued by their society to profitably make a livelihood and earn an honest living.

Ignorance is not caused by an absence of literacy

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EPILOGUE

Since this change in banana exports from the Caribbean occurred, the significant increased frequency of inferior quality bananas on sale in British supermarket multiples, like Sainsbury's, has been noticeable. Many of the bananas now on sale look poor quality and are poor quality and get left unsold in singles - a great waste of food, money and resources in general.

So yes sure, the price of these bananas from Central and South America are cheaper (than previous Caribbean banana exports) but the quality is poorer and the customer is worse off in terms of choice.

The only salvation to get a good banana these days in the UK is to get "FAIRTRADE" ones - which probably cost as much as the previously exported Caribbean bananas!!

Otherwise go to the Caribbean and taste a REAL BANANA

In the meantime eat the banana chips on sale at the same multiples - Sainsbury's et al.