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.