Indebted Ivory Coast Cocoa Farmers Unable to Prepare for Next Season

(Nasdaq) – A wave of defaults by cocoa exporters in top producer Ivory Coast has left farmers with unsold beans, indebted and unable to purchase fertilizer and pesticides to prepare their plantations for next season’s harvest.

Cocoa has piled up at the ports for weeks and has been left to rot on trees as exporters, having wrongly speculated that world cocoa prices would extend years-long gains, declined to purchase beans to fill unprofitable contracts.

The stocking of beans, often in poor conditions, is already likely to have a negative impact on quality for the current harvest. But the financial pressure on farmers and cooperatives is set to have a knock-on effect for the 2017/18 season which will open in October.

“Right now I’m not interested in buying fertilizers or other products. I don’t even have 1,000 francs in my pocket in order to eat, so how could I think of that?” said Ali Diabate, 58, who farms six hectares near the town of Soubre in the southwest.

Of 23 farmers interviewed last week across Ivory Coast’s western cocoa heartland, none said they planned to invest in fertilizers or pesticides.

The Ivorian government introduced a forward sales system in 2012 allowing it to set a minimum price for farmers with the primary aim of encouraging growers to reinvest in their plantations. Farmer incomes had steadily risen in line with world prices.

However, as the system has broken down this season causing a glut of cocoa and fewer buyers, many farmers have failed to sell their crops while others have been forced to accept less than the 1,100 CFA francs ($1.79) per kg dictated by the government.

Many farmers are now saddled with debt, and farmer cooperatives, which typically distribute fertilizers and other products to their members, are struggling as well.

All 18 co-op directors interviewed by Reuters said they would be unable to help their members prepare their plantations for next season. “We don’t have any money.

We haven’t even paid for last year’s fertilizers because of this situation and our suppliers won’t take credit this year,” Germain Kabore, who manages a co-op near the town of Daloa, told Reuters.

Across western Ivory Coast, shops selling fertilizers and pesticides have largely closed due to a lack of customers.

“All the stock I’ve had from January is still there. I haven’t sold a single box or bag of fertilizers. It’s all still there. No one is coming to buy,” said Mamadou Keita, who runs a shop in the town of Soubre.