Cocoa buyers, sellers, producers and other industry stakeholders are meeting this week in Accra, Ghana to discuss the future of cocoa business. In West Africa, where millions depend on the trade for their livelihoods, analysts say that important price fluctuations impoverish farmers and need to be controlled. Phillip Wellman reports from our West Africa bureau in Dakar.
The International Cocoa Organization says the three-day conference will focus on preserving the environment, improving production, and boosting prices paid to cocoa farmers.
West Africa produces about 70 percent of the world's cocoa, bringing in millions in revenue, but most farmers in the region remain poor.
Secretary general of the Lagos-based Cocoa Producers' Alliance Sona Ebai says he believes a special organization should be created through which West African farmers would sell their cocoa and receive fixed prices.
Now farmers in many countries sell to intermediary companies that then resell to cocoa processors for a profit. He says an organization would help farmers receive better prices and also spread sales throughout the year.
"Most of it [cocoa], at least 80 percent of it, comes out in the first cocoa quarter of the year: October to December," he said. "So definitely the market is flooded and prices cannot be good. But if we had a system where we could purchase the cocoa from the farmer and take care of his interests, and then supply the market regularly [it would be better]. Because when it comes to March, April, May, June, the market is getting stronger in price, but the producers do not have any cocoa to sell."
Ebai says that a similar system exists in Ghana, where the government helps negotiate prices cocoa processors pay to farmers. Experts say because of this system the average Ghanaian contract is higher than the contracts in most neighboring cocoa producing countries, where there is less state intervention.
One of those states is Ivory Coast, which produces roughly 40 percent of the world's cocoa.
The International Monetary Fund says that half of the country's population depends on the cocoa industry.
Spokesman for the Ivorian Farmers' Federation Gnan Fever says he believes Ivory Coast would benefit from a system like the one in Ghana. In 2002 the sector was semi-liberalized and five private bodies replaced a state-run cocoa board. The bodies have since been accused of fraud.
Fever says that creating a body to help sell farmers' cocoa directly to processing companies would make the country's cocoa industry more transparent. He says then farmers would know exactly what price their cocoa was being sold at and what percentage the government would be taking. He says fixed prices would make earnings more stable for farmers.
Maria Lopez of London-based Global Witness watchdog group says farmers in Ivory Coast make on average 50 cents a kilogram for their cocoa, which she says is much less than in Ghana. But she says establishing a growers group in Ivory Coast would be difficult.
"The way it looks, it is not very likely to happen quickly in Cote d'Ivoire because there is some legislation that forbids it, so unless they reverse legislation they will not be able to do it," she said.
In both Ivory Coast and Ghana, the cocoa industry rests mainly on small-scale farmers. Analysts say they have had little leeway in improving their work conditions, both in regards to powerful, private operators who buy their cocoa and governments who set the rules.
The International Cocoa Organization says it hopes this week's conference will help change this pattern.