Abidjan, Oct 23 - Top cocoa producer Ivory Coast is poised to re-regulate its agriculture sector in the coming months to try to reverse output declines that have put the country's main revenue generator at risk, government and opposition sources said on Friday.
The move could mark a return to a system abandoned a decade ago in the West African nation in which the government sells the lion's share of the nation's cocoa production forward onto the world market and fixes prices to farmers.
"It is not yet formalised by the president, but it is very likely that we will return to stabilisation of prices to guarantee a minimum price to growers," said a source with knowledge of the government cocoa reform committee's plans.
Analysts have said such a reform could encourage a revival in the country's slumping cocoa output by providing growers with a bigger share of the proceeds from their crops amid widespread complaints they are being underpaid.
In the current system, the government announces an official price during the season, but it is used only as a guideline and actual prices are determined by the domestic market.
A government official confirmed that plans to reform the cocoa sector were afoot, but did not give details.
"There will be a strong structure for controlling the many aspects of the sector," said Tito Tiehi, an official in President Laurent Gbagbo's agriculture programme. "We will implement a policy to defend Ivory Coast's place as top producer and even win back market share worldwide."
The country's cocoa industry, dogged by underinvestment in the wake of a 2002-03 civil war, recently closed the book on its worst harvest in at least five years, underpinning a rally in world prices to 30-year highs.
Farmers have said an inability to reap the benefits of high world market prices have led them to put off much-needed improvements to their plantations.
Gbagbo has said he thinks growers should be guaranteed at least half of the value of their crop.
RISK OF MISMANAGEMENT
If history is any guide, however, the planned re-regulation could fail to yield results.
Ivory Coast jettisoned its government-controlled system, dubbed "Caissestab", in 1999 in favour of liberalisation to cheers from the farming sector, which accused the bureaucracy of skimming proceeds from forward sales and leaving growers with a too-small share.
President Gbagbo's plans for re-regulation coincide with preparations for long-delayed elections, which he has said he hopes to hold by the end of this year.
But even if a poll is held and Gbagbo loses his bid for reelection, reform remains a likelihood as both top opposition candidates are also leaning toward re-regulation.
Alassane Ouattara, head of the opposition Republican party, plans to set up a government-controlled cocoa and coffee marketing system similar to that used in neighbouring Ghana, the world's No. 2 cocoa supplier.
"As soon as Outtara is elected, he will appoint a minister of agriculture to be immediately responsible for executing reforms in the coffee and cocoa industries," said Goussou Toure, director of Ouattara's Republican party.
"The structure will have the opportunity to combine spot sales and forward sales to maximize the profit on the market," he added. "The first step is that we will fix a guaranteed price that will never be less than 50 percent of the international price. This means that buyers will have to buy the beans at this price on pain of punishment."
The opposition Democratic Party headed by Henri Konan Bedie, meanwhile, has also said it plans to reform the sector to be managed by a single body like "Caissestab".
"Once Bedie is elected, we will immediately start up new measures for cocoa and coffee, that are pillars of the Ivorian economy," said Boniface Britto, the party's agriculture secretary. "We will return to a kind of minimal organization and management control."