Taxes, middlemen, conflict cut into Ivorian cocoa farmers' earnings

Hacking his way through the lush forest with a machete, his rubber boots sinking into the moist earth, Lambert Kwame surveys the plot of land that his family has worked for over 30 years, harvesting cocoa.

"We know that the national price for cocoa is very high," Kwame says. "But the obstacles set up between the farmers and the harbour take all the profit that we could make from the crop."

Hundreds of beans from Kwame's cocoa crop lie drying in the sun on a modest wooden stand before his home, along the highway that leads to Abidjan. For this harvest he will be paid about 90 cents per kilogramme by middlemen who will sell it to international exporters in Abidjan.

Côte d'Ivoire is the world's largest producer of cocoa, a distinction that remained even during the political crisis that has engulfed this West African country over recent years (a 2002-2003 civil war sparked by political and economic instability, as well as tensions over regional discrimination and immigration, led to Côte d'Ivoire being split into government and rebel zones). The nation's crop currently accounts for nearly 40 percent of global cocoa production.

Cocoa is also Côte d'Ivoire's main export, representing some 35 percent of goods sent abroad. This translates into about 1.4 billion dollars of revenue annually in the south, controlled by the government of President Laurent Gbagbo, according to official figures. In the northern sector, overseen by the rebel New Forces (Forces Nouvelles, FN), yearly cocoa revenues are thought to hover around 30 million dollars.

In addition, up to four million of Côte d'Ivoire's 17 million inhabitants work in some aspect of the cocoa trade.

But concern been growing for several years as to how revenues generated by the crop are used by the maze of overlapping and often opaque organisations set up by both the government and rebels to manage cocoa. Following the installation of Gbagbo as head of state in 2000, the government established a quartet of institutions, in addition to an existing body, to regulate the cocoa trade and ostensibly support the country's cocoa farmers.

The multiplication of taxes levied on cocoa exports by these additional organisations has, however, cut deeply into the ability of Côte d'Ivoire's cocoa farmers to make a living. Dues in the south for the 2006-2007 harvest amounted to 10 cents per kilogramme, up sharply from three cents in 1999.

Far from improving the lives of farmers, cocoa profits have in fact gone elsewhere.

"On the government side, the national cocoa institutions, the majority of which were set up after President Gbagbo came to power in 2001, have directly contributed at least 10.6bn CFA (US$20.3m) to the war effort," notes a Jun. 8 report from Global Witness, a London-based grouping that seeks to demonstrate how natural resources are used to fund conflict.

The government has itself admitted as much. At the height of Côte d'Ivoire's civil war in December 2002, Gbagbo thanked the country's cocoa institutions for their 20.3 million dollar contribution to the government war effort.

The situation is scarcely more promising with revenues generated by cocoa harvested in the rebel-held north. Still forbidden from passing south, these yields are exported via Togo, Guinea and other neighboring countries -- with taxes being levied en route by members of the New Forces.

In addition to funding conflict, cocoa revenues are believed to have been defrauded for enrichment of persons in both the government and rebel camps.

The government's conduct in the cocoa sector also came under criticism in a 2004 financial audit of its new cocoa institutions by the European Union (EU) that was leaked to the French press in 2006. This noted with concern a refusal by Ivorian officials to explain in any meaningful way what the levies were being used for, and the ambiguous legal status of the institutions. As a result of the audit's findings, the EU declined to continue financing the country's cocoa and coffee sectors.

A French-Canadian journalist, Guy-André Kieffer, who had been investigating corruption in the cocoa sector, even disappeared in Abidjan in April 2004 -- and is now presumed dead.

Kieffer's inquiries dealt in particular with the Banque nationale divertissement (BNI), where some of the revenue from the country's major cocoa institutions is held. The sole shareholder of BNI is the Gbagbo government. Its director, Victor Jérôme Nembéléssini-Silué (himself a former cocoa executive) is also the chairman of Lev-Ci, a company which includes on its board Moshe Rothschild: an Israeli arms dealer wanted in Peru on corruption charges, and who negotiated the delivery of military helicopters to the Gbagbo government. The deal occurred just before United Nations Security Council Resolution 1572 imposed an arms embargo against the country's warring factions in November 2004.

Kieffer's personal computer was later found at the home of Gbagbo's brother-in-law, Michel Legré, the last person Kieffer was known to have had a meeting with.

Certain analysts have voiced concern that lack of transparency in the cocoa sector will undermine the fragile calm that has been established in Côte d'Ivoire through a power-sharing agreement reached between the government and the New Forces in Burkina Faso's capital, Ouagadougou, in March. New Forces leader Guillaume Soro is now prime minister in Gbagbo's administration.

"I think that economic motives in continuing this war will definitely play a role. People make money off this war by having no control, no transparency," says Arnim Langer, a researcher at the Centre for Research on Inequality, Human Security and Ethnicity, based at the University of Oxford in England. "There are a lot of incentives to keep the status quo."

The increasingly fraught nature of the Ivorian cocoa trade is also making itself felt among exporters of the commodity.

"It's more and more difficult to trade in an ethical way," said an executive of Cargill West Africa, in Abidjan. This firm is one of the top four exporters of cocoa from Côte d'Ivoire, and a subsidiary of the U.S-based multinational Cargill. "The informal sector is growing, thriving even, which is obviously a problem."

On a more optimistic note, in late October Gbagbo announced that his government had begun an investigation into possible corruption in the cocoa trade.

"We are asking companies for more transparency," Maria Lopez, the lead researcher for the Global Witness report, said. "Without setting up good transparent systems, the future of the cocoa sector, and Côte d'Ivoire, remain bleak."

IPS