Trinidad Express
Trinidad Cocoa fetching $26,000 per tonne
but archaic state control of industry no incentive to boosting paltry 800-tonne production
By Raffique Shah
Wednesday, April 4th 2007
COCOA prices are soaring on the world market as global shortages loom large on a drought-stricken West Africa horizon. The International Cocoa Organisation projects a shortfall of 100,000 tonnes of the prized beans this year, although producers say it could be as much as 250,000 tonnes. A surge in demand for "dark" chocolate has fuelled prices that range from US$2,000 for "bulk cocoa" to US$4,200 per tonne for "fine" beans like those produced in Trinidad and Tobago and a few other countries. The premium "fine" cocoa comprises a mere five per cent of global cocoa production, and is used in the main for flavouring gourmet chocolates marketed at exorbitant prices to discerning consumers.
But this rise in demand for Trinidad and Tobago's much sought-after "Trinitario" brand has hardly benefited either local cocoa farmers or the country's coffers. If anything, the industry is stagnated. And blame for this has been placed on the archaic and very restrictive Cocoa and Coffee Act of 1962. This law created the Cocoa and Coffee Board which exercises tight control over all aspects of the industry, especially marketing the beans. Farmers can sell only to licensed agents, who in turn make commissions for merely drying wet beans. Also, of the four big cocoa farmers in the country, only one has had permission to sell his beans directly to a foreign chocolate manufacturer.
Sources at Board told Business Express that annual production of our premium cocoa stood at around 800 tonnes in 2006, with no increase forecasted for 2007. This is no more than what little Grenada produces. This country's revenue from cocoa exports in 2006 was estimated at TT$18 million. Potential earnings, if all existing plantations are fully rehabilitated, are estimated at between TT$60 million and $100 million. And with sugar cane in its final days, if conditions are right for farmers to switch to cocoa, overall revenues could be much higher with returns per acre more than three times what those in the sugar industry made.
"There are many reasons why cocoa production has declined this badly," said the Board official. "The Government, through the Agriculture and Food Production Ministry, has introduced many incentives to stimulate the industry. But for plantations that have been allowed to run down for many years, it's a tall order. Labour is problem number one. This adversely affects agriculture across the board, but no crop more so than cocoa. There are many instances in which farmers have abandoned their fields for lack of labour. People simply do not want to work on cocoa estates. We've had our share of adverse weather problems, too. Over the past few years the shifting weather patterns have been unkind to cocoa in particular. Bad husbandry does not help, and many farmers fail to inter-crop, missing the opportunity to increase their returns per acre. Also, for someone who wants to seriously enter the cocoa business, which includes drying and even roasting facilities, the capital costs could be high."
Still, there are a few individual farmers who are doing extremely well. A local industrialist who bought out the old Agostini Estate in Gran Couva and rehabilitated it has etched the central village's name on the gourmet chocolate market. Last week, in a Guardian (UK) article titled "Black Gold", it was stated: "Valrhona is a reticent French company that makes Grands Crus such as Guanaja, Manjari and Caraïbe, each a different blend of beans from countries including Venezuela, Madagascar and the Caribbean, and the 64 per cent vintage bars from named plantations in Venezuela, Madagascar and Trinidad." One such vintage brand is named "Gran Couva".
A Board official said while it oversees and growing, buying and marketing of the country's cocoa, individual farmers are being encouraged to link up with established chocolate manufacturers where their beans, once they maintain quality, fetch higher-than-premium prices. But he warned that there are counterfeit "Trinidad" chocolates on the world market. "Those in the business know that Trinidad cocoa, popularly known as 'Trinitario', grown mainly in some Caribbean and South American countries, commands premium prices, more than twice that of bulk cocoa. The main reason for this wide gap is that 'fine' or 'flavour' cocoa comprise a mere five per cent of world cocoa production. This 'black gold' is mixed with bulk cocoa to produce the more expensive brands of chocolates and cocoa beverages. We therefore have to guard against counterfeit cocoa being sold as originating in Trinidad in order to maintain our integrity."
The decline in production is worrying to the Ministry of Agriculture and the Cocoa and Coffee Board. Few farmers have struggled against the odds to rehabilitate abandoned estates or establish new ones. A major problem in rehabilitating old, sometimes abandoned estates is that the trees, especially those from old varieties, must be shaded by use of larger trees like the immortelle.
In new plantations, using new varieties developed locally, farmers use banana and cassava trees to provide shade until the cocoa plants are strong enough to stand on their own. The "shade" trees also provide the farmers with interim revenues as they wait for the cocoa trees to mature-usually in three to four years. New varieties developed by the Cocoa Research Unit (CRU), headed by Dr David Butler and falling under the aegis of the UWI, have fast-tracked their maturity, allowed for plants to be grown closer-around eight feet apart, yielding higher density than old farms in which trees were planted around 20 feet apart.
But control of buying beans by selected agents remains a disincentive, according to several farmers with whom Business Express spoke. "There seems to be no fixed basis on which beans are graded," they said. "Most of the beans we take to the agents are classified as Grade II, for which we receive less money. Also, because most cocoa farmers cultivate small acreages-five to ten-we do not have the capital or means to dry the beans. We therefore sell wet beans which fetch less than $4 per kilo. Properly dried beans, on the other hand, fetch between $10 and $18 per kilo. So we are at a serious disadvantage."
There are international standards set for grading beans. The International Cocoa Standards, according to a publication, require cocoa of merchantable quality to be fermented, thoroughly dry, free from smoky beans, free from abnormal or foreign odors and free from any evidence of adulteration. It must be reasonably free from living insects, broken beans, fragments and pieces of shell and foreign matter and reasonably uniform in size. Throughout the world the standards against which all cocoa is measured are those of Ghana cocoa. Cocoa is graded on the basis of the count of defective beans in the cut test. Defective beans should not exceed the following limits:
Grade I
- Mouldy beans, maximum 3%
by count;
- Slaty beans, maximum 3% by count;
- Insect-damaged, germinated or flat
beans, total maximum 3% by count.
Grade II
- Mouldy beans, maximum 4%
by count;
- Slaty beans, maximum 8% by count;
- Insect-damaged, germinated or flat
beans, total maximum 6% by count.
Cocoa production in this country, according to Ministry of Agriculture statistics, has fluctuated over the past few years. The table below shows total production, domestic exports and the value of exports for the years 1998-2002. See Table 1.
By 2006, production had declined to 800 tonnes, with a similar volume expected in 2007. Both the Board official and farmers who spoke with Business Express believe that if government and farmers can get their act together, this country stands to make significant earnings from the cocoa industry. Besides the rejuvenated Agostini Estate in Gran Couva, two other major, new estates are changing the face of the industry. CL Financial's head Lawrence Duprey, through Prism Agri Estates, has established a huge farm at Cumuto called La Louisa Estate. The company also bought La Maraquita Estate in Gran Couva, and two other estates in Moruga. Another Sangre Grande farmer currently has 35 acres under intensive production. "I have an additional 180 acres I can easily bring under cocoa production," said the Sangre Grande farmer. "But the restrictive laws that govern the industry are the major disincentive to people like me."
Asked to elaborate, he said he has installed two driers, one diesel-powered and the other electrical. "But I cannot offer the extra drying capacity I have to other farmers, according to law. In the classical case of the law being an ass, my equipment lie idle while small farmers are forced to take their wet beans to official 'agents', many of them shopkeepers of the old days. They simply buy the wet beans and dry them using sunlight, which itself is an archaic process. But they make commissions as 'middle men', while the farmers who toil in the estates get the dregs, literally. If government is serious about this industry, especially as sugar cane seems to be in demise, it must remove these restrictions-both the Act and the Board."
For the smaller farmers who sell their beans "wet" to agents, they fetch a mere TT$3.78 per kilo. This means from an acre of aged trees with little husbandry, farmers can hardly hope to earn more than $1,800. "There is no way we can survive on this pittance," said several small operators. "Government should facilitate us in becoming cooperatives and acquiring modern drying facilities. Only the agents and a few big farmers can afford those." Properly dried beans fetch between $10 per kilo (Grade II) and $18 (Grade I). The difference between selling wet beans and dry can mean, on a per acre basis, as much as $7,000. "That's a significant sum," said the smaller farmers.
But larger farmers, too, are crying out against controls the Board has over the growing, buying and selling of cocoa. They have found support in prominent agriculturist Professor John Spence, who thinks the Board is an anachronism in today's cocoa market. In a series of articles currently being featured in the Daily Express, Spence outlines the restrictions imposed on farmers by the Board, and argues: "Government intervention should have three objectives: (1) to provide a market of last resort to small growers (2) to monitor quality (particularly flavour that is not now considered) and (3) to provide research services through government agencies (in collaboration with CRU and including the continued creation of elite varieties). The Cocoa and Coffee Industry Act should be immediately repealed and replaced by new and less restrictive legislation (if necessary) that would achieve the above objectives."
The Sangre Grande farmer said new varieties he has focussed on, and which are available to those wanting to get into cocoa production, mature in as little as four years. "While the plants are growing, I use plantain and banana trees, as well as cassava, for shade. These crops give me good short-term revenues. After about four years I reap around 200 kilos per acre. But by year six I get as high as 1,000 kilos per acre. Since I have my own drying facilities, and I maintain good quality beans, I can gross around $18,000 per acre.
"If I add what I earn from inter-cropping, that's another $5,000 or so per acre. There is no other agricultural crop from which one can earn this type of returns. What turn me off from putting the remaining 150 acres into cocoa are the Government-imposed restrictions that make life for the cocoa farmer a rough one. If only they would free up the industry, control the quality of the beans to retain our integrity, but allow us to dry, roast and market our cocoa as we see fit, we can have a very thriving, very profitable export crop. Besides, there are immeasurable downstream prospects, as the Grenada Chocolate Company has shown."
