Posted by: Home Strange Home | February 18, 2011

Chocolate, dear?

Not so sweet

Consumers of late may be paying more attention to where their food comes from as they hear frequent news reports about the rise in global commodity prices and the agricultural shortages resulting from supply side shocks trickle through to their tables in the form of higher prices. Cocoa, a crop for which Africa accounts for 68% of global production according to the FAO, is yet another chapter in the recent story of commodity crises.

The political problems in Cote d’Ivoire are at the heart of the problem. Cote d’Ivoire is the world’s largest cocoa producer, accounting for 40-44% of world production; it is followed by its neighbour, Ghana, and then Indonesia in Asia. The Ivorian economy is highly dependent on the agricultural sector and the international community is attempting to use this as a lever to push Laurent Gbagbo out of power.

“President” Gbagbo has been in power since 2000, but lost in November elections last year to Alassane Ouattara, who garnered 54% of votes.  Although the international community (including the UN, the EU, and the African Union) recognizes Ouattara as the rightful winner, Gbagbo’s party cried fraud, asserted that Gbagbo won, and the stubborn incumbent has refused to step down. Since then, the world has been trying to find ways, political and economic, to squeeze Gbagbo out.

In late January, Ouattara called on the international community to support a month-long ban on cocoa exports, hoping to cut off the Gbagbo government from one of its main sources of income (the cocoa producers pay taxes on their exports to the government’s cocoa regulatory body) so that it can no longer pay civil servants and security forces, thereby eroding it support and power base. The EU and the US endorsed the ban, and exports from the country have slowed to a dribble.

But of course the cocoa farmers are stuck in the middle, even if they aren’t politically involved. Gbagbo is pushing them to pay taxes on their exports, even demanding advance tax payments on future shipments that may never get out of the country. And Ouattara and the rest of the world are stopping cocoa farmers from exporting by cutting off their international buyers, leaving with them huge cocoa stocks that cannot be processed domestically. And meanwhile people in Europe will see the price of their favourite treats rise, just as they are filling their Easter baskets.


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