ACCRA DECLARATION: Declaration of economic incompetence & mediocrity....

2nd ALL AFRICA COCOA SUMMIT
ACCRA, GHANA
03-06 OCTOBRE 2007

ACCRA DECLARATION

Declaration of economic incompetence & intellectual mediocrity

Below is the Accra Declaration made by the African cocoa producing countries attending the 2nd All Africa Cocoa Summit in Accra, Ghana from 03-04 September, 2007.

The official mission and objective of the Summit is to find an effective solution to stabilize cocoa prices at remunerative levels for both cocoa producing countries and millions of cocoa farmers across Africa.

I have added my own observations and comments with reference to each one of the Statements contained in the Accra Declaration.

I welcome your comments & feedback. Thank you.

ACCRA DECLARATION

1) ELIMINATE TARIFFS TO IMPROVE MARKET ACCESS

Personal observations:

Eliminating (escalating) tariffs in consuming countries will no doubt favor local-value addition in producing countries. However, it will not resolve the root economic cause leading to low, declining and un-remunerative prices of cocoa on the world market, namely the structural over supply of cocoa on the world market resulting from market imbalance between supply & demand.

Since over 90% of the cocoa in West Africa is currently exported raw, it is crucial to FIRST stabilize cocoa prices at remunerative levels to generate sufficient financial resources from cocoa exports required to build the infrastructure and the capacity to locally process the cocoa, thereby creating local employment, significantly increasing income and gradually breaking-free from the dictate and the vicious trap cycle of the commodities world market.

Assuming that cocoa producers were successful in eliminating escalating tariffs in cocoa/chocolate consuming countries (which is wishful dreaming since the cocoa & chocolate industry will obviously not dig its own economic grave by removing escalating tariffs on cocoa…) without FIRST stabilizing cocoa prices at remunerative levels, it will still not enable cocoa producing countries to export processed cocoa in consuming countries since cocoa producing nations will not be in a position to generate sufficient financial resources from its non-processed cocoa beans exports ( +90% of total annual production) to set up the processing infrastructure and the capacity to economically process cocoa locally.

This is obvious! You cannot put the cart in front of the horse!

2) EXAMINE THE IMPLICATIONS OF THE USE OF SUPPLY MANAGEMENT & OTHER MARKET INSTRUMENTS WITH THE VIEW TO ACHIEVING MARKET EQUILIBRIUM AND REMUNERATIVE PRICES.

Past ( Copals’ Gold Coast cocoa’s farmers’ strike in the 1940’s) & more recent failed supply management attempts ( Copal’s 2006 Libreville Declaration on Production Management Program) have all failed because Copal’s policies’ to stabilize cocoa prices at remunerative levels have failed to effectively identify, address and resolve the root economic cause leading to low, volatile, continuously declining and resulting un-remunerative cocoa prices on the world market.

Copal: A toothless and ineffective dog…

Furthermore, Copal members producers have repeatedly – since the creation of Copal more than 40 years ago- failed to respect and to implement the policies developed and prescribed by Copal to stabilize cocoa prices at remunerative levels, which seems to clearly indicate that Copal members’ are not disciplined and seems to suggest that they have no faith in the effectiveness of Copal’s economic policies.

The 2006 Abuja Declaration of the 1st All Africa Cocoa Summit held in Nigeria in 2006 ,has also brilliantly failed to effectively address & resolve the root cause leading to volatile, low, declining and un-remunerative prices of cocoa on the world market (structural over supply). Instead of using supply management instruments to address and resolve the structural over supply of cocoa on the world market, the Abuja Declaration has wrongly recommended and adopted the use of demand management market instruments ( local value-addition & promotion of local consumption) as a means to address the structural over supply of cocoa on the world market.

Copal & cocoa producers in Africa need to consider & adopt the cocoa cartel strategy which I have proposed as an effective solution to achieve market equilibrium between supply & demand to stabilize cocoa prices at remunerative levels ( see copy of Cocoa Cartel proposal on this blog.)

However, it is surprisingly depressing and disappointing to observe that Copal has not even considered or proposed this solution to African cocoa producing countries during the 2nd All Africa Cocoa Summit held in Accra and has not even mentioned it in its Accra Declaration.

As the following proverb rightly says: “God has put a limit to human intelligence, but he has put no limit to human stupidity…”

3) CALLED ON MEMBERS OF COPAL TO ENCOURAGE HARMONIZATION OF INTERNATIONAL QUALITY STANDARDS & PROCEDURES USED TO MEASURE QUALITY AND PROVIDE FINANCIAL RESOURCES TO BUILD HUMAN CAPACITY & TECHNOLOGICAL CAPACITY FOR QUALITY INSURANCE.

Personal observations:

A perfect example of sterile “intellectual masturbation” which clearly reveals the intellectual paralysis and incapacity of Copal and its members to identify, address and resolve the root economic cause plaguing the cocoa sector: (i.e. Structural over supply of cocoa resulting from market imbalance between supply & demand and leading to low, volatile, constantly declining real prices of cocoa resulting in *un-remunerative cocoa prices on the world market (i.e. *prices unrelated to **real cost of production (i.e. ** not taking into account inflation, currency depreciation, terms of trade, etc) , which naturally affects quality…!)

“Rectify one angle of the square and the other angles automatically rectify themselves…” Mahatma Gandhi.

4) PROMOTE DOMESTIC CONSUMPTION OF COCOA

Personal observations/comments

See above comments relating to 1) Removing tariffs to improve market access.

To promote domestic consumption – which both Copal & its members have brilliantly failed to do over the last 40 years – you need to develop and implement intelligent and coherent development policies to locally process the cocoa and other commodities; and to locally process cocoa, you need to generate sufficient financial resources to invest in the processing infrastructure and to build the capacity to locally process the cocoa and to promote and to develop local consumption of cocoa products. However, to generate the financial investment resources, you need to FIRST stabilize cocoa prices at remunerative levels since currently over 90% of the cocoa produced in West Africa is exported raw at un-remunerative prices and at a loss for cocoa farmers…!

Again, this is (or should be) self-evident!

5) PROVIDE FUNDING FOR RESEARCH

No further comment!!! Cannot respond repeatedly to unintelligent statements! Refer to above observations/comments.

6) RESOLVE TO ENHANCE DOWNSTREAM RESEARCH & DEVELOPMENT FOR VALUE ADDITION

How do you “enhance downstream research & development” for local value addition if your sector is bankrupt due to un-remunerative cocoa prices because you (Copal & its members) have been incapable to develop & to implement intelligent and coherent economic policies to (let alone even implement local value addition ) obtain and secure remunerative prices for their cocoa farmers…???

7) STRENGHTEN INTERNATIONAL COOPERATION AMONG AFRICAN COCOA PRODUCERS TO ENCOURAGE OTHER AFRICAN PRODUCERS TO JOIN COPAL.

COPAL is a toothless dog…as its +40 years history clearly testifies...In fact, Copal has brilliantly failed to identify, address and resolve the root economic cause leading to low, volatile, constantly declining and un-remunerative real prices of cocoa over the last +40 years since its creation…So do not waste declining, scarce and fast depleting cocoa financial resources…to pay incompetent bureaucrats…with the cocoa farmers’ hard earned (but not paid) income…!

8) “TOUCHED” ON CHILD LABOR… RESOLVED TO TAKE MEASURES TO ELIMINATE THE WORST FORMS OF CHILD LABOR ON COCOA FARMS.

Beyond the obvious commercial hypocrisy and lack of concern for the real issue of slave children working on cocoa plantations, the only effective “measure” to effectively eliminate child forced labor on cocoa plantations is to pay the cocoa farmers fair and remunerative prices so as to give them the financial means to hire labor on their cocoa farms. And to do so, market imbalance leading to structural over supply must be addressed and resolved. That is the only and most effective solution to resolve and eliminate the use of forced child labor on cocoa plantations.

The other currently widely and totally ineffective approach adopted by the cocoa industry is the use of deceitful propaganda preached by cocoa/chocolate industry-funded organizations such as the Cocoa Foundation, Cargill, etc…denying the existence and use of forced child labor and trying to cover the issue through deceitful propaganda and ineffective “cosmetic” social projects in cocoa growing countries…

9) IMPROVE PRODUCTIVITY THROUGH PLANTING OF DISEASE RESISTENT & HIGH YIELDING PLANTING MATERIAL…DELEGATES RESOLVED TO PROMOTE INTENSIFICATION OF PRODUCTION TO IMPROVE INCOME FOR FARMERS…AND TAKE MEASURES TO MAKE COCOA FARMING MORE ATTRACTIVE FOR YOUTHS.


Summum of stupidity…!!! Annual production surpluses over the last + 40 years have led to a structural over supply of cocoa on the world market ( 2006 world stocks levels= 1.5 million metric tons = 50% of annual demand = 6 months stocks!) leading to low, volatile, constantly decling and unremunerative cocoa prices on the world market. As a result, millions of cocoa farmers in Africa have been thrown deeper into poverty. Thus, by resolving to improve productivity and to promote intensification of production cocoa producers are actually digging their own economic graves and those of millions of cocoa farmers instead of “improving income for farmers…” The summum of stupidity has been reached through this Statement…!

9) DELEGATES NOTED THE ECONOMIC IMPORTANCE OF COCOA IN COCOA PRODUCING COUNTRIES IN AFRICA AND IN THE LIVEHOODS OF A LARGE PERCENTAGE OF ITS POPULATION AND NOTED THE DECLINE OF REAL PRICES OVER THE LAST TEN YEARS AND THE INEQUITABLE DISTRIBUTION OF INCOME AMONG STAKEHOLDERS.

Bravo!!! At least cocoa producing countries have realized the importance of cocoa in their economies and among a large portion of the farmers and the local inhabitants!!! They have also realized the decline in real prices…and the massive exploitation to which they are subjected!!! So the billion dollar question is: WHAT ARE YOU GOING TO DO ABOUT IT…?

Final reflections…

Beyond the unbelievably & limitless level of economic & intellectual mediocrity that the Accra Declaration reveals, what is crystal clear is that both Copal, its members and other cocoa producing nations in Africa have BRILLIANTLY failed to identify, address and resolve the root economic cause leading to low, volatile, constanly declining and un-remunerative cocoa prices on the world market for over half a century since so-called “independence”.

What is even more depressing and discouraging for me is that even after having written and explained in detail to both Copal’s General Secretary – Mr. Sona Hope Ebai – and to the Producers’ Representative/spokesperson at the ICCO - Mr. St-Cyr Djikou - the root economic cause leading to volatile, low, contantly declining and un-remunerative cocoa prices and proposed an effective policy and solution to stabilize cocoa prices at remunerative levels ( setting up a cocoa cartel), neither has acted upon it ( see copy of email exchanged between myself and Mr. Hope Ebai on this blog) In fact, to this day (+3 months since I wrote to him), Mr. St-Cyr Djikou has not even acknowledged nor responded to my letter…

With GREAT disappointment and despair for the fate of millions of exploited (cocoa) farmers accross Africa…

Truthfully,

Arya

« In a world surrounded by deceit, telling the Truth is a revolutionary act. » George Orwelll