Chairman of the Grenada Cocoa Association (GCA), Pastor Christopher Williams has sounded a warning to farmers to be on the look-out as the Keith Mitchell-led government continues to forge ahead with plans for the two major commodity bodies on the island.
Pastor Williams addressed the issue Thursday at the Deluxe Cinema in Grenville, St. Andrew where cocoa producers held a General Meeting to discuss the affairs of the organisation.
High on the issue of the agenda was the presentation of the GCA 2019 annual report in which the Chairman gave an overview of the performance of the association.
THE NEW TODAY reproduces an edited version of the report from Pastor Williams:
Fellow farmers we are meeting under difficult conditions in difficult times … two issues will determine the existence of the GCA and, depending on how they are handled the result could be very disastrous for the Association.
COVID-19 pandemic affected the GCA in many ways, firstly, exportation was disrupted as a result of high infection rate in importing countries like France, secondly, and the imposition of a State of Emergency on the island limited the harvesting of cocoa for some time.
With regards to the chocolate factory, 60% of revenue was lost due to the effects of COVID-19. The Board believes that the real effect of the pandemic would be felt during the 2020/21 crop for this is the period when new contracts will be formulated.
The discussion of merger of GCA/GCNA once again takes center stage, but this instance is different in the sense that the initial intent of Government is to have a majority of the Board and liberalisation of the sector seems to be the main focus.
The idea of merger has extended beyond business into the domain of politics.
The GCA Board took a conscious decision to focus on the business of the merger and do not engage in politics. At its regular meeting the Board took a decision to engage the inputs of farmers to receive a proper mandate in moving forward.
Following a meeting in Grenville, farmers gave the Board authority to negotiate the merger with certain conditions attached. These two important issues (COVID-19 and merger) cause one to reflect on the value of an association like ours.
According to Dr. Reginald Buckmire, former Chairman of the GCA, “Grenada Nutmeg” and “Grenada Cocoa” owe their commercial value and existence to GCNA and GCA where there was centralised processing and the development of biochemical precursors that made our cocoa and nutmegs to be the strongest and best in the world.
In a profound way, Dr. Buckmire tells it all. The GCA exists to realize the economic, environmental and social needs of cocoa farmers and by extension Grenada. Being in business for more than 50 years, GCA has been successfully performing this role of improving the livelihood of cocoa farmers.
In fact, with 7,000 members and their families, it is often impossible to distinguish between the Association and the community, the continued commitment to the farming community guarantees another 50 years of service to Grenada.
By forming themselves into a Co-op, cocoa farmers were able to overcome critical problems that would otherwise be impossible if they decided to approach them individually. Elimination of competition amongst cocoa farmers and focused its resources on external markets to ensure that the best prices for dry cocoa was arguably the greatest achievement of the GCA.
Farmers got a fixed place to sell their wet Cocoa without the worries of when, who, where will cocoa be bought and above all what price they will receive for their cocoa. The GCA gave farmers peace of mind.
The GCA was able to utilise the findings of the Cocoa Improvement Scheme of the 1940s to manage the Cocoa nurseries at Boulogne, Ashenden and Maran thus ensuring Grenada’s cocoa varieties known as “Grenada Selection” was preserved. This important activity performed by GCA gave Grenada the prestigious ratings of 100% fine flavour Cocoa in the ranking of the ICCO.
GCA now consolidates raw cocoa from over 7,000 farmers and processes them in four Fermentaries resulting in the world renowned “Grenada Fine Estate Cocoa”. When fermentation is done in this manner, there is a greater degree of certainty that the cured Cocoa “live up to the reputation that Grenada is known for.
Apart from the Ministry of Agriculture, Grenada Cocoa Association is the only agricultural entity that offers an organised extension service to its members. Adopted in the 1980’s, GCA helped with information on best practices for the cultivation of Cocoa. A Farm Input Programme established around that period, provided pivotal support to farmers through the affordable and environmentally acceptable fertilisers and pesticides to its fanners.
The full extent to which the Association is of value to its fanners may never be known, but it must be etched in our minds that the Association pays a huge financial price for its social responsibility to farmers.
It is an established fact that GCA returns 80% of its income to farmers while operating and investing with 20% of the residual funds. Moreover, it is also true that GCNA will never refuse to accept cocoa from farmers even if our facilities are filled and our cash runs out… we don’t close the door on our farmers.
Despite its many benefits, the GCA remains a commodity exporter; invariably it is exposed to market risks that are not within its control. Market volatility, high bank interest rate, adverse weather and more recently the COVlD-19 pandemic can have serious effects on the Association.
Any of these events has the potential to destroy the very existence of the Industry. Let me make it very clear; these risks are not because of the cooperative structure of the GCA but because it trades in raw Cocoa beans.
To function effectively, prices on the commodity market must be falling and rising regularly, that is, there must be price volatility, when prices rise sharply the Association wins but when the reverse happens and prices drop sharp, Association stands to lose. It is therefore important to take all necessary steps to cushion the fall.
Production increase, improved efficiency and climate resilient projects, have been the key strategies against the systemic threats posed by market risks. Following the devastation of Hurricane Ivan, Cocoa production plummet to its lowest level since the formation of the Association.
Cocoa export averaged 100 thousand pounds in the two years following the hurricane, the lowest since 1787. With such low level of production during that period, industry became vulnerable and bordered on the brink of closing down.
In response to this concerning situation, GCA Board took the difficult task to increase prices to boost production. Working with its bankers, the Board set prices at 80% of sales. The result of this intervention proved to be successful, production grew exponentially to a level which surpassed Pre-Ivan level.
Price stabilisation brought a level of satisfaction to farmers but at a huge risk to the viability of the Association. Considering that only 20 cents on the dollar is spent to operate the industry it could be perceived as “bad management” but the true meaning of cooperatives will be realized when the members are satisfied.
Dr. (Stephen) Fletcher describes this as a huge “psychosocial responsibility” that is not seen neither will ever be seen in any other business model in Grenada. To operate a business with 20 cents to the dollar is a virtual impossibility, made possible by social value of our cocoa beans, price negotiation and improvement in overall efficiency, viz:
(1). Obtained Fairtrade Status since 2017
(2). Reinstating Grenada’s cocoa to 100% fine and flavour cocoa
(3). Direct selling of cocoa to end users.
(4). Solar Wall to replace diesel fuel at Mt. Home Cocoa Fermentary
(5). Maintain processing cost below $0.43 per pound
(6.) Maintain 5 permanent workers along with temporary labour
As it relates to Diamond Chocolate Factor (DCF), you don’t have to be an objective thinker to observe its potential as a climate resilient project, a serious foreign exchange income earner and a source of national pride for all Grenadians.
DCF is by no means a “little achievement”, firstly, this is a world class facility constructed with modem food safety system in mind. Secondly, it represents the microcosm of what the future cocoa Industry in Grenada will look like.
Indeed, it will be an industry which embodies a primary production system fueled by value addition and a bean to bar tourism experience. It will be an industry that brings social justice to all stake holders without permanent damage to the environment. It will be a business where all progress loving Grenadians will be proud to be a part of.
Fellow fanners, even as we speak. I am appointed to the Cabinet Oversight Merger committee to merge and deregulate the GCA. You should know that the first draft which reflected Government’s intention to control and liberalise the Cocoa Industry has been unanimously, rejected by the Committee.
I’ll say this once; the final draft must make farmers the “Centerpiece” of the merged entity. It was our collective conviction that the contents of the draft were not in the best interest of cocoa fanners; to this end a second draft has been circulated.
I cannot help asking, why in the midst of a global COVlD- 19 pandemic there is a move to undermine the Association under the disguise of merger with the GCNA. We say no to the intent of Government to control the Board oi Directors with the aim of assuming control of the assets of farmers, and to add insult to injuries, grant licenses to whom it wishes without consideration of farmers.
Cocoa farmers are unified on this matter, in its present form, the merger of GCA/GCNA proposed by Government is unacceptable and so a resolution has been adapted in a special meeting in Grenville authorising the Board to peruse merger on the following pre conditions:
(1.) The monopoly of the Association must be maintained.
(2.) The assets of both organisations must be vested in the members of both GCA and GCNA Farmers.
(3.) Allow GCA/GCNA to work together – functional cooperation and work towards eventual Merger.
(4) Merge both entities into one unit and keep the present structure as it is including the ratio 0f Government nominees to elected, i.e. 3 Government and 6 elected members. Additionally, a system of issuing shares must be included.
(5.) If the above cannot be done, proceed to form a Producer’s Co-operative and subsequently work towards merger so that farmers can obtain shares.
(6.) It was unanimously agreed in all meetings that whatever structure the entity maybe, GCA/GCNA farmers must be the “centerpiece” of the decision-making process.
I want you to know that you are not powerless in this matter, GCA still operates on democratic principles and you still have one vote which is protected in the Ordinance. You alone, no else, have the power to effect the change you need.
Anyone or institution who tries to do above your will, is working in futility. I know this because our reach extends beyond cocoa farming, we are the community, we survived strikes, market crashes hurricanes, revolution and more and guess what, we are still here, aren’t we?
As we await the results, GCA continue with its business as usual.
(a) We continue to work alongside the World Bank on the AGRICOM Project which result in increased low Cadmium cocoa production in St. David’s and a milk chocolate plant at Mt. Horne. We are thankful to the Government for their role in this area.
(b). Solar Energy for Chocolate Factory – we will pursue a project for solar energy for the chocolate factory.
(c) The restaurant at Diamond is completed and will be opened in the opportune time.
(d). Adverse weather conditions are becoming more prevalent and to this end we are in the final stage of negotiating a Crop Insurance scheme for farmers. We thank Government for the leadership in this area.
(e). We continue to seek out new end users while maintaining a level of high operational efficiency so that we can maintain farmers’ prices higher than the world market.
Finally, I want to remind you again that we are in extremely difficult times and still in the period of COVID-19. Most of us are in the vulnerable category; I urge you to be very careful and exercise caution in everything you do. You are a very important person in this country and produce a very important food and the nation needs you.
Adhere to the protocols established _
- Wear your mask in public
- Wash your hands regularly or use sanitizer
- Maintain social distancing
Do not let your guards down, so please ‘Be Safe’.
Thank You.