BBC: Cocoa and the State

Venezuelan cocoa sector fears state intervention.

Andres Herreras slashes through thick undergrowth in jungle just outside the town of Panaquire in eastern Venezuela, looking for ripe cocoa pods. He’s been harvesting these six hectares of land for over forty years using just his machete and his hands.

Thousands of farmers like Andres tend small cocoa plantations across Venezuela. Their output is small – around 15,000 tonnes a year which adds up to less than 1 percent of world production.

Yet Venezuela’s cocoa is supposedly the best to be had. It commands a premium of up to US$1000 per tonne above and beyond the general market price which surged to a record high of more than US$3400 in February after political turmoil in major producer Ivory Coast.

Venezuela’s native criollo beans are sought after by chocolatiers the world over for their lack of bitterness and their flavour. Aficionados say it contains hints of almonds, caramel and brown sugar.

Once the country’s main foreign currency earner, cocoa suffered neglect after Venezuela struck oil at the beginning of the 20th Century. Large haciendas were broken up or left to crumble and cultivation is now almost exclusively the work of small scale farmers.

They struggle to make a good living from the crop. “I usually have more help with the harvest but right now I’m struggling because the people who help me have been offered better jobs building a new dam nearby,” says Andres.

President Hugo Chavez wants to breathe new life into the cocoa industry and has declared it a “strategic product”. The government has started work on a cocoa processing plant in the east of the country thanks to funds from Cuba and has already completed a new chocolate factory and chocolate school.

But private cocoa and chocolate producers are wary of what the presidential decree could mean. They fear it could signal a state takeover of the entire industry and point to government involvement in the coffee sector as a warning sign. State price controls brought in for that commodity crop have made it almost impossible for growers to make money.

Small cocoa farmers say they welcome government assistance but want to be consulted on what that help should involve.

“If they don’t take our advice and input on what the industry needs, it will be like giving us food without a knife or fork to eat it with,” says Esteban Martinez from ASOPROCAVE, an association representing small cocoa farmers across Venezuela.

Others in the industry say they already know what is needed to turn around cocoa production in Venezuela and they’ve come up with a 15 year plan.

“It’s going to require investment in the order of US$500 million over that period of time,” says Jorge Redmond, president of the chocolate manufacturer El Rey.

Production could be increased to 70,000 tonnes a year, Redmond says, but only if yields are increased on existing plantations and 25,000 new hectares are found for the crop.

“Unfortunately until now we haven’t found any interface between the government and the private sector to do such a thing,” he adds.

Producers in all areas of the industry are unsure if they’ll be reaping the rewards of government investment or paying a high price for state involvement in the cocoa business.