Alex Assanvo urges World Cocoa Conference to reach for the moon
Alex Assanvo presenting at this year's World Cocoa Conference. Pic: Neill Barston
Alex Assanvo, of the Ivory Coast Ghana Cocoa Initiative urged assembled sector leaders at the World Cocoa Conference to ‘put our tools together’ to deliver on a long-held quest for a living income for farmers, reports Neill Barston.
The group’s executive secretary was among many speakers during the first two days of the event speaking directly to the headline theme of this year’s event that has honed in on ensuring sustainable production for key agricultural communities serving the sector.
As Confectionery Production discovered from speaking to a number of contributors to this year’s key event – which returned after a six-year absence due to the pandemic, there was a strong sense that the key issue of further raising financial standards is critical to the industry’s future.
For his part, Alex Assanvo, offered a passionate plea to the broader industry to work together in helping enable governments and companies to ensure that payment to farmers is brought further in step with the spiralling prices being commanded in New York and London commodities markets.
Significantly, Futures prices continued to surge upwards as we have reported over the past few months- with the latest figures now seeing cocoa trading at $12,000 a tonne. This is more than five times what the recently uprated amount of $2,470 a tonne.
“Ideas matter, and the very idea of a living income for farmers has gained incredible momentum over the last five years. What was a niche or considered by its contenders as a pipe dream of some idealistic NGOs, is becoming the mainstream agenda of companies and governments, said Alex Assanvo.
He added: “This is the new frontier, and this new frontier is getting closer. We all know, that from whatever position we’re seeing it from, we owe farmers a living income. We cannot shun our responsibilities and capabilities – because we know we can make it. So yes, things have changed tremendously, hence my nuance on “why we are stuck”. We are not stuck. We are in a dynamic process. The idea of a living income for farmers – has come to the centre of the conversation.”
As he went on to discuss, the introduction of the Living Income Differential several years ago was seen by soon as un unrealistic measure, leaving some to suggest ‘that you’re crazy, you cannot twist the arm of the market, it is all about supply and demand, there is excess cocoa that origins should acknowledge they are responsible for, until they do prices will remain low and there is nothing we can do about it.”
As he noted, minimum prices were being put forward in France by MEPs, aimed at supporting a minimum price for farmers, with the country’s agricultural community being subsidised by several billions a year.
Reflecting on the LID system, he described it as being ‘visionary’ and being ‘like a finger pointing to the moon, but critics mistook the finger for the moon.”
Market tipping point
Notably, he observed it had seemed like it had become a sport for some in the sector to attach blame to the other side of the market regarding pricing situations, and that it had felt like the market is at a tipping point.
He said that there had been resistance in some quarters of the industry for change, though there were others who have been progressive in their thinking, ‘striving to make this cocoa 2.0 world happen now.”
He added that plans were now being taken forward to build a traceability system where not only volumes, but prices would be traced.
Moreover, he asserted that one of the core goals was creating continued trust within the industry, with sustainability programmes showing how much firms are sourcing from each country, enabling greater transparency of operating.
“Our responsibility is to stick to our ambition and the means contemplated to achieve it. We need a predictable floor price, with a dedicated mechanism to deliver it irrespective of terminal market prices. History shows that commodity markets are prone to price falls as sudden as price rises – and sadly for farmers, falls are way longer than rises. So, we need to have the toolbox before prices will go down.”
