National Export Strategy Cocoa Export Strategy

2 COCOA EXPORT STRATEGY 2014-2018 EXPORT PERFORMANCE In the face of significant constraints product diversifica- effective border controls, the cocoa stock being shipped tion is poor and the sector primarily exports only HS 1801 out of the Mano River Union region is a mix of beans from ( cocoa beans, whole or broken, raw or roasted ) through all around the subregion. This is primarily due to the fact international firms active in the country. Smallholder ex- that cocoa farmers sell their produce to markets that are ports are virtually non-existent. Liberia is a minor player closest to them, which may well be across the border. in the global market, accounting for only 0.3 % of global sales. In 2012 it was ranked 21st globally among cocoa exporters with exports of approximately 10,559 tons. The OPTIONS FOR FUTURE Netherlands, Spain and Germany were the top three mar- kets for Liberian cocoa in 2012. DEVELOPMENT In order to realize the export potential and increase the Informal cross-border trade remains an important com- export competitiveness of the Liberian cocoa sector, ponent of trade into and out of Liberia. In the absence of the following vision has been adopted : “ To become an agent of transformation in the cocoa sector, driving large scale sustainable job creation and augmenting ” access to economic empowerment opportunities for small entrepreneurs through increased exports. This vision will be realized by the following strategic and operational objectives, which are designed to compre- hensively address the overall weaknesses identified across the value chain. Strategic objective Operational objective • Undertake a comprehensive revitalization of the extension services division under MoA. • Strengthen the research base in the sector. • Ensure that the sector has access to a strong base of support service providers. • Improve the capacities of cooperatives and related associations of producers to cater Strengthen the overall trade to the needs of the sector. support network in the sector. • Ensure that key pending reforms in main policymaking institutions for the sector are completed. • Improve quality management infrastructure. • Improve access to finance for operators in the sector. Improve access to • Ensure adequate access to inputs at the production phase. infrastructure and services. • Improve centralized infrastructure for use by sector operators. • Improve the quality and efficiency of Licensed Buying Agents through an overhaul of their recruitment and training mechanisms. Comprehensively augment • Support cooperatives and Farmer Field Schools ( FFS ) in the cocoa sector to impart skills and the influx of best relevant training components to their constituents. practices and enable product • Use a variety of media to disseminate information on best practices. diversification in the sector. • Increase the level of organization in the sector. • Enable product diversification in the sector, especially in certified cocoa. • Ensure that adequate support for exporters exists, relative to key international Facilitate increased access markets. to, and strengthen the ability • Encourage involvement of diaspora networks towards investments and sector of enterprises to utilize, trade regeneration efforts. information. • Develop a strong Liberian cocoa brand – especially leveraging the future potential for exporting certified cocoa. EXECUTIVE SUMMARY 3 The envisioned future state of the sector has been devel- OPTIONS FOR FUTURE oped using a combination of consultations, surveys and analyses. This future state consists of two components DEVELOPMENT : ( both of which combine to form the future value chain ) : STRUCTURAL ƒƒ Structural changes to the value chain that result in ei- ADJUSTMENTS ther strengthening of linkages or introduction of new TO THE LIBERIAN COCOA linkages ; and ƒƒ A market-related component involving identification VALUE CHAIN of key markets in the short and medium to long terms for exporters. The projected structural changes to the sector are based on efficiency gains identified through the four gear analy- sis of the sector’s performance, and through the identifi- cation of opportunities for improving the sector’s capacity OPTIONS FOR FUTURE to acquire, add, create, retain and distribute value. DEVELOPMENT : MARKETS Examples of such structural adjustments include : in- In the short term ( 0–5 years ), existing trade relationships creased strategic partnerships with regional and global and bilateral geographical distances will form the ma- cocoa institutions; adoption of sustainable land manage- jor criteria determining the markets for Liberian cocoa ment practices ; improved sorting at the farm-gate lev- products. Market penetration in existing markets through el ; increased availability and adoption of input supplies multinational firms will be the main mode of market de- (high yielding varieties, fertilizers, pesticides, scales, etc.); velopment. In this regard the strategy will be consolidat- ­restructuring LPMC to suit its regulatory role as the Liberia ing rather than visionary in nature. Primary target markets Agricultural Commodities Regulatory Authority ( LACRA ) ; will include European Union ( EU ) markets with high de- increased integration of women in activities across the mand for cocoa used in processing ( the Netherlands, value chain ; and improvements in logistical infrastructure Germany, Belgium and France ) and emerging markets such as warehouses. with rapidly increasing processing capabilities, such as India and Malaysia. IMPLEMENTATION Over the medium to long term ( 5 + years ), it is expected that the evolving capacities of Liberian exporters – across MANAGEMENT multiple dimensions including quality management, sup- The broad range of activities, together with the complex ply capacities, product diversification, time to market ef- nature of integrated intervention, requires careful imple- ficiency, and marketing / branding, in conjunction with mentation that efficiently directs resources and monitors the improving business environment and export value results at both the micro and macro levels. To this end, a chain improvements effected by the NES and sector Plan Liberian Export Council ( LEC ) will be established in order of Action ( PoA ) implementations – will allow exporters to to facilitate the public-private partnership in elaborating, target other markets in the medium to long term which coordinating and implementing the NES. In particular, seem hard to penetrate now. LEC will be tasked with coordinating the implementation of activities in order to optimize the allocation of both re- It is expected that the Liberian cocoa sector will therefore sources and efforts across the wide spectrum of stake- simultaneously service current buyers ( discussed for the holders. Within this framework, implementation of the short-term options ), while constantly monitoring oppor- cocoa strategy will also fall within the purview of LEC. tunities to also serve other segments such as certified cocoa and processed cocoa products. Markets identified Such efforts will involve directing donor and private and as having potential for Liberian cocoa in this timeframe public sector organizations towards the various NES pri- include the Netherlands, Germany, Belgium, the United orities in order to avoid duplication and guarantee maxi- States of America, Canada and West Africa. mum impact. Responsibilities will also include monitoring the results of activities and outputs, while at the same time recommending policies that could serve to enhance realization of the strategic objectives. With a 360-degree view of progress, the Council will be best placed to man- age funding and provide regular reports to donors and stakeholders. Moreover, LEC will play a key role in recom- mending revisions and updates to the strategy so that it continues to evolve in alignment with the country’s evolv- ing needs. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

4 COCOA EXPORT STRATEGY 2014-2018 Source: jbdodane In addition to LEC, a variety of stakeholders will be critical CONCLUSION to the successful implementation of this strategy. These include public sector actors such as MoA ( including This sector export strategy represents a major step for- the extension services ), LPMC / LACRA, Cocoa Sector ward in realizing the export potential offered by Liberia’s Technical Working Group ( CSTWG ), the Cooperative cocoa sector. There is a clear need to transform Liberian Development Agency ( CDA ), MoCI and the Ministry of cocoa from its current status as a subsistence crop to a Foreign Affairs ( MoFA ), and also private sector / civil so- carefully planned, market engine of equitable growth and ciety organizations such as sector NGO ACDI / VOCA that value distribution. have a successful track record in the sector and are well positioned to assist. CURRENT CONTEXT 5 CURRENT CONTEXT The global market for cocoa products ( and derivatives ) Cocoa-based products can be broadly segregated into stood at US$ 40.7 billion in 2012. Chocolate and other food cocoa beans (HS 1801) and the other product groups that products containing cocoa ( HS 1806 ), and cocoa beans reflect processed ( and semi-processed ) cocoa products ( HS 1801 ) respectively constitute the top consumed ( HS 1802 through HS 1806 ).1 products, as indicated in the schematic below ( figure 1 ). Global consumption rates have been following a growth trend since 2008 and the individual markets for cocoa- based products ( except cocoa butter and cocoa waste 1. This strategy primarily works within the scope of HS 1801. However, products ) have reflected this. Overall, the global growth from the viewpoint of product diversification and for providing a broad rate has been 7 % annually between 2008 and 2012. overview, this section reviews the main sub-product groups. Figure 1 : Product map for cocoa global trade Imports value Imports quantity Annual Growth Rate (per cent) Top consumers (US$ billons) (Thousand tons) Top exporters (2008-2012) (Importers) 2012 2011 Germany, HS 18 US, Germany, Netherlands, Côte Cocoa and Cocoa Preparations 40.7 10,524 7 Netherlands d’Ivore, Belgium, France, UK France Netherlands, Côte d’Ivore, HS 1801 US, Ghana, cocoa beans, whole or broken, raw 8.3 3,301 4 Germany, Nigeria, or roasted Malaysia, Cameroon, Belgium Netherlands Singapore, Singapore, Netherlands, Netherlands, HS 1802 .05 98.3 -1 Poland, Spain, cocoa shells, husks, skins and other China Indonesia, cocoa waste Germany Germany Germany, Côte d’Ivore, US, Netherlands, HS 1803 833.9 17 France, Germany, 3.1 cocoa paste, defatted or not Netherlands, Indonesia, Spain France Germany, Côte d’Ivore, Netherlands, Malaysia, HS 1804 Belgium, France, 2.7 753.9 -11 cocoa butter, fat and oil US, Côte d’Ivore, France Indonesia US, Netherlands, Germany, Malaysia, HS 1805 France, cocoa powder, not sweetened 3.3 743.5 34 Germany, Netherlands, France, Spain China US, Germany, HS 1806 Germany, Belgium, chocolate & other food products France, Netherlands, 23 4.793 7 UK, containing cocoa Italy, France Netherlands, Source : Derived from ITC Trade Map. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

6 COCOA EXPORT STRATEGY 2014-2018 HS 1801 ( COCOA BEANS ) ƒƒ The bulk of the production of cocoa beans ( HS 1801 ) ƒƒ Cocoa bean imports are primarily concentrated in the is concentrated in developing countries as indicated European and North American markets, where the co- in Figure 2 below. Over 70 % 2 of the total volume origi- coa is further processed into products such as ground nates in Africa – primarily the West African countries cocoa, chocolate, cocoa butter etc. Multinational firms including Côte d’Ivoire, Ghana, and to a smaller extent such as ADM, Mars Chocolate etc. represent the main Cameroon and Liberia. The other major cocoa pro- corporate buyers in these markets, producing products ducing regions include south-east Asia ( Indonesia, for end consumers which may be consumed in country Malaysia, India and the Philippines), and Latin America or further exported. As indicated below, African mar- ( such as Brazil and Ecuador ). Latin America is known kets account for the lowest consumption levels despite for ‘fine flavoured cocoa beans used in premium and being the market leaders in production. single origin chocolates’.3 2. International Cocoa Organization ( ICCO ) projections. 3. Potts, J., van der Meer, J. and Daitchman, J. ( 2010 ). The State of Sustainability Initiatives Review 2010 : Sustainability and Transparency, p. 95. International Institute for Sustainable Development ( IISD ) and the International Institute for Environment and Development ( IIED ). Figure 2 : Cocoa production worldwide 2011-2012 Asia & Oceania: 15% (590,000 tonnes) Latin America: 14% (574,000 tonnes) Production thousand tonnes More than 400 100-400

10-100 Africa: 71%

1-10 (2.826 million tonnes) Less than 1 Figure 3 : Cocoa consumption worldwide 2011-2012 Europe and Russia: 40% (1.597 million tonnes) Asia & Oceania: 20% (813,000 tonnes) Americas: 21% (855,000 tonnes) Grindings thousand tonnes More than 400 100-400

10-100 Africa: 18%

1-10 (732,000 tonnes) Less than 1 Source : ICCO monthly reviews aggregate. CURRENT CONTEXT 7 HS 1802–1806 A few West African countries such as Ghana and Côte d’Ivoire have recently integrated related technologies ( SEMI-PROCESSED in their value chains. The multinational firms noted AND PROCESSED COCOA, above are the primary suppliers of semi-processed and processed cocoa. INCLUDING WASTE ) ƒƒ The market for processed/semi-processed cocoa products ( including ground cocoa ) is currently con- ƒƒ The supply base for semi-processed and processed centrated in just two areas of the world : Europe and cocoa ( HS 1802-1806 ) is led by the EU and the United the United States. More specifically, the United States, States. The cocoa grinding business is dominated Germany, France, the Russian Federation and the by EU countries ( notably the Netherlands, Germany, United Kingdom of Great Britain and Northern Ireland Belgium and France ), followed by Asia and Oceania, consume over 50 % of world chocolate production. the Americas and then Africa.4 Processed cocoa- Less than 20 % of all chocolate is consumed in the based products are brand and marketing driven and producing countries of Latin America, Africa and Asia. as such are dominated by a few companies, all of In the last decade Asian markets such as China, India, whom originate in Western markets. These players are Indonesia and Viet Nam have emerged as major mar- increasingly concentrating their marketing efforts in kets as well. These are expected to grow in the future emerging markets to reach end consumers. in line with rising disposable incomes and solidification of the premium segments in the markets. 4. World Cocoa Foundation ( 2012 ). Cocoa Market Update. Available from http ://worldcocoafoundation.org/wp-content/uploads/Cocoa- Market-Update-as-of-3.20.2012.pdf. Box 1 : Key figures in the global cocoa economy Parameter Value Global growth in output ( between 2002/2003 and 3.2 to 4 million tons * 2010/2011 ) Average annual growth rate of output ( between 3.3 % * 2002/2003 and 2010/2011 ) Africa 3.7 % * Americas 3.1 % * Asia and Oceania 1.5 % * Increase in Africa’s share between 2002/2003 and From 69 % to 75 % * 2010/2011 Top producers of cocoa West African countries ( Côte d’Ivoire, Ghana and Cameroon ), and Nigeria Top suppliers of raw cocoa ( HS 1801 ) Côte d’Ivoire, Ghana, Nigeria, Cameroon, Indonesia and the Netherlands ( re-exported cocoa ) Top consumers of raw cocoa ( HS 1801 ) The Netherlands, Nigeria, the United States, Germany, Malaysia and Belgium Top suppliers of cocoa-based products ( HS18 ) Germany, the Netherlands, Côte d’Ivoire, Belgium and France Top consumers of cocoa-based products ( HS18 ) The United States, Germany, the Netherlands, France, the United Kingdom and Belgium *Source : International Cocoa Organization ( 2012 ). The World Cocoa Economy, Past and Present, p. 1. Available from : http ://www.icco.org/about-us/international-cocoa-agreements/cat_view/30-related-documents/45-statistics-other-statistics.html. Trade based source : ITC Trade Map. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

8 COCOA EXPORT STRATEGY 2014-2018 Source: © ACDI / VOCA 2011. CURRENT CONTEXT turn, the rural economy of the tree crops belt of the coun- try. Cocoa production output dropped to near zero levels In Liberia, cocoa is an important cash crop whose export during the war. potential remains dormant as a result of 14 years of civil conflict that plagued the country from 1989 to 2003 and The civil war resulted in widespread destruction or aban- the largely ineffectual support that the sector has received donment of cocoa farms as well as the limited processing since the end of the conflict. infrastructure that existed in the country. Cocoa produc- tion output that stood at 10,000 tons in the 1970s dropped During the pre-war era of the 1970s and 1980s the gov- to near zero levels during the conflict. A MoA survey pub- ernment made active attempts to support the sector, pri- lished in 2002 6 noted that the number of cocoa farms op- marily through the erstwhile Liberia Coffee and Cocoa erating in 2001 had dropped to 38 % of the pre-war level Corporation. Apart from interventions aimed at the ( 1988 ), indicating the widespread impact. ­smallholder sector a few industrial scale plantations, main- ly in Lofa and Nimba counties, were set up and operated Since the end of the conflict in 2003, the government has by the Liberia Coffee and Cocoa Corporation.5 The sec- initiated steps to resuscitate the cocoa sector in a bid to tor played a vital role not only in foreign exchange earn- realize the potential offered by it in terms of export earn- ings but also in stimulating other sectors of the national ings, as well as socioeconomic contributions in the form economy. Across the supply chain, thousands of stake- of jobs. Tree crops in general, and the cocoa sector in holders are involved in trade, transport and export and particular, have an important socioeconomic dimension are dependent on cocoa for their livelihoods. However, due to the smallholder orientation of the sector. Coupled decades of underinvestment in the tree crop sector has with the potential for foreign exchange earnings, the de- severely affected the productive capacity of smallhold- velopment aspect has resulted in a strong business case ers – the major drivers of the cocoa subsector – and, in for the government to increase the pace of support to the sector. 5. Milbrandt, A. ( 2009 ). Assessment of Biomass Resources in Liberia, p. 8. Colorado : National Renewable Energy Laboratory. Available from : 6. Dand, R.J. ( 2008 ). Liberia – the Export Value Chain. www.nrel.gov/docs/fy09osti/44808.pdf. International Trade Centre. CURRENT CONTEXT 9 STRUCTURE OF THE SECTOR Guinea, while Nimba shares a border with Côte d’Ivoire and Lofa shares a border with Sierra Leone. Figure 5 indi- Cocoa production in Liberia has exhibited a gradual in- cates the main geographical regions of cocoa cultivation. crease since 2005, although yield levels are going down – indicating an increase in area under cocoa cultiva- The cocoa group primarily grows well in interior counties tion. Figure 4 indicates the production levels in tons ( bar with slightly higher altitudes, such as Grand Gedeh, River graph ) and yield levels ( line graph on secondary axis ) in Gee, Lofa, and Gbarpolu.7 hectogram / hectares. Three counties – Bong, Nimba, and Lofa – make up 90% of 7. Milbrandt, A. ( 2009 ). Assessment of Biomass Resources in Liberia, total cocoa production, and 80 % of the employment gen- p. 8. Colorado : National Renewable Energy Laboratory. Available from erated by the sector. All three counties share a border with www.nrel.gov/docs/fy09osti/44808.pdf. Figure 4 : Production ( tons ), yield levels ( hectogram / hectares ), and areas under cultivation related to cocoa farming in Liberia 2005-2011 8000 2500 7000 7000 6700 2000 1700 2000 1765 1704 1667 1718 6000 5000 4600 1500 4000 1547 4000 3000 1000 3000 2000 1700 1000 500 1000 0 0 2005 2006 2007 2008 2009 2010 2011 Area under cultivation ( ha ) Item ( x ) / Year ( y ) 2007 2008 2009 2010 2011 Cocoa beans 10 000 20 000 27 000 39 000 45 260 Source : FAOSTAT THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

10 COCOA EXPORT STRATEGY 2014-2018 Figure 5 : Major cultivation areas of cocoa in Liberia Source : International Fund for Agricultural Development ( 2011 ). The Republic of Liberia Smallholder Tree Crop Revitalization Support Project ( STCRSP ) Project Design Report. It is estimated by the International Cocoa Association Cocoa households are among the poorest in the country ( ICCO ) that 90 % of the world’s cocoa production comes and cocoa farmers are amongst the most food insecure from 3 million smallholders. In Africa, home to two of the populations in Liberia. Employment in the sector is spo- world’s largest producers – Côte d’Ivoire and Ghana – radic at best, with high seasonality and with the rainy sea- smallholder farmers are particularly dominant, with a mi- son being the longest continuous lean period. nority of larger farms making up the rest of production ( 5 % of total farms in Côte d’Ivoire are five hectares and Approximately 9,000 tons of beans are produced from above ; 1 % of cocoa farms in Ghana are above five hec- 25,000 ha 11 annually. The majority of this production tares).8 This contrasts with Brazil and Ecuador, where 10% ( estimated between 4,000 and 5,000 tons ) is exported and 13% of cocoa farms, respectively, are above five hec- across the border, mostly via the Guinea, Côte d’Ivoire, tares in size. and Sierra Leone routes, and onward via their respec- tive export networks into other international markets. This In Liberia too, this trend holds steady. The cocoa sector trade, though ( the Liberia national component ), is pre- is composed of approximately 30,000 smallholders, with dominantly informal and delivered entirely on the basis of average holding sizes of 1-3 ha.9 The cocoa sector ac- community / trader networks. Though informal ( as is most counts for as much as 12.6 %10 of total employment in the likely to happen in a post-conflict situation ), this channel agriculture sector. is an important, if not sole, source of income, especially in producing areas along the Guinea, Sierra Leone and Côte d’Ivoire borders. 8. International Cocoa Organization ( 2008 ). Annual Report, 2006-2007. Also : Potts, J., van der Meer, J. and Daitchman, J. ( 2010 ). The State of Owing to a variety of reasons that are discussed in detail in Sustainability Initiatives Review 2010 : Sustainability and Transparency, following sections, cocoa yields are very low in Liberia. They p. 95. International Institute for Sustainable Development ( IISD ) and the currently stand at 200 kg/ha, which is about 30 % of that International Institute for Environment and Development ( IIED ). obtained in other cocoa producing countries in the region. 9. Pipitone L. ( 2012 ). The Future of the World Cocoa Economy : Boom or Bust? Presentation given at the International Conference on Cocoa, Rome, 28-30 May. 10. LISGIS Agriculture Sector Update 2010. 11. Republic of Liberia, Ministry of Agriculture ( 2009 ). CURRENT CONTEXT 11 Figure 6 : Fishbone diagram indicating the main root causes of low yield levels of Liberian cocoa Inputs Stocks LIMITED variety AGEING stock available IRREGULAR and LACK of financing seasonal supply to replace stock HIGH costs of LOW quality of imports local seedlings Problem WEAK national WEAK extension Statement inputs supply services Low yield of Liberian cocoa WEAK extension WEAK extension services services INADEQUATE HIGH deficit in Research trained specialists WEAK access to OUTDATED TVET equipment Infrastructure POOR access to UNTRAINED credit - rural manpower POOR transport LIMITED sector infrastructure organization Infrastructure Human capital and Technology Machine Source: Sector Consultations. Source: jbdodane CURRENT SECTOR OPERATIONS Figure 7 : Current value chain and operations in the Liberian Cocoa sector Inputs Productions Transformation and processing Distribution Export markets Bagging Liberian Cross-border trader Abandoned farms Just in time harvesting - (hand Via. Ganta (Guinea)/Foya Cosmetics Drying/Fermentation (partially dried beans/ End consumer: Labour (25-35 years old) picking) (Sierra Leona)/Harper Manufacturer mouldy/semi-fermented Grinder in West Còte d’Ivoire, Gunea, beans) Cote d’Ivore) Trader/agent African market-local ans Sierra Leona / Local or TNC low end confectionary Rest of Africa implements Individual smallholders marker Organic Individual smallholders fertilizers Individual smallholders Futher Export of raw cocoa to other Village level African markets Scales buyer Individulual Manual Machinery smallholder farm Harvesting, transfer to Agent for Household buyer Buyer in Cocoa beans Smallholders buyer Buyer in main Manufacturing - (conventional/lower end): drying yard buying center/ Labour Nursery Management, planting, and FBOs (collecting buying center chocolate EU 27/Japan/emerging LBAs (conventional) agents) markets in Asia graded and International Buyer International Fuel Individual smallholders Farm Based Drying Sorting bagged in via. Local representative Final processing/ Diatributors/ Bagging Labelling Grinder: Manufacturing - Organization (FBO)/ packaging (box/ weeding Fermentation proper pureplay / Retailers/cateners/ Seeds and Semi- cosmetics Cooperative packaging FBOs Liberia exporter bags) boutiques IMPORTED saplings inhouse Household buyer (premium merchanized based in Monrovia Post-war set up with pruning, maintenance Harvesting, Segment): Packaging programme support transfer to EU 27/Japan/emerging material drying yard Large scale commercial plantations OR markets in Asia Manufacturing - FBOs misc products Pesticides International Component of Value Chain Fertilizers Large scale commercial plantation Primary Supporting Services Maintenance providers Pest and Disease Control Maintenance providers Customs- natl, or intl. Warehousing and storage Packaging suppliers Input providers Transport services Inputs financing / Export financing Trade information providers Research and development TVET providers Quality control and certification CDA + cooperatives Source: Sector Consultations and Desk Research. CURRENT SECTOR OPERATIONS 13 THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

14 COCOA EXPORT STRATEGY 2014-2018 INSTITUTIONAL LANDSCAPE FOR THE LIBERIAN COCOA SECTOR The overall trade support network for Liberian cocoa is MINISTRY OF COMMERCE considered for the Cocoa Sector Export Strategy as the aggregate institutional framework in the country, bring- AND INDUSTRY ing together those trade support institutions that have Policy issues and regulations related to export / import an interest in, or a bearing on, export development and activities fall under the mandate of MoCI. This is also the competitiveness of the cocoa sector. case for the cocoa sector. There is overall overlap in the different categories of in- stitutions in the country, whether institutions that provide CENTRAL BANK OF LIBERIA policy, trade or business support, and whether they form part of civil society players who play an important role in The credit and microfinance system for the private sec- sector development or other agencies. The current de- tor, including the cocoa sector, is very weak. The chal- bilitation of the institutional structure is in part a result of lenges are multidimensional and discussed in detail in the systematic destruction caused by the many years of the Access to Finance cross-sector strategy. In an effort violent civil conflict, and the financial / human capital / co- to alleviate these challenges, the Central Bank of Liberia ordination challenges that have succeeded it. The main ( CBL ) is preparing a microfinance system aimed at the institutions in the sector are as follows. agricultural sector, including the cocoa subsector. MINISTRY OF AGRICULTURE NATIONAL STANDARDS Policy issues related to agriculture sectors fall under the LABORATORY purview of MoA. MoA is also responsible for the imple- The National Standards Laboratory ( NSL ) is at an ad- mentation of the Liberia Agricultural Strategic Investment vanced stage of development with assistance from the Programme, which concentrates on cocoa, rice and oil United Nations Industrial Development Organization, and palm cultivation. currently offers services including food composition test- ing and metrology services. Right now the lab is unable to Through its mandate the Ministry has a high degree of offer certification services as it is still undergoing accredi- influence over cocoa sector stakeholders. In terms of co- tation. It is currently under observation by the International ordination and advocacy also, MoA ranks relatively well Organization for Standardization ( ISO ). among other ministries. There are, however, some gaps in the areas of human capital and financial sustainabil- ity. Inadequate staffing and training provided to staff- ers affects service delivery. Budgetary support is also a challenge. INSTITUTIONAL LANDSCAPE FOR THE LIBERIAN COCOA SECTOR 15 COOPERATIVE DEVELOPMENT ƒƒ Buying / selling of cocoa ( no longer the case – LPMC does not sell any cocoa and instead issues licenses AGENCY to exporters ) ; The Cooperative Development Agency ( CDA ) is the ƒƒ Setting recommended farm-gate prices ; main instrument of the government through which sup- ƒƒ Certifying LBAs ; port is provided to cooperatives in the country. The civil ƒƒ Assisting exporters in cleaning, grading, weighing and war mostly destroyed the CDA infrastructure, but work rebagging the product through the LPMC facility in the has resumed on rebuilding the infrastructure and other port area of Monrovia. capacities to pre-war levels. CDA is active in the main cocoa producing counties of Bong, Nimba and Lofa.12 LPMC’s scope is expected to change in the near future as it transitions to the role of a regulatory body to be known as LACRA. While MoA and MoCI will have overall respon- LPMC / LACRA sibility to set policy direction in agriculture and trade at the highest level, LPMC/LACRA has been handed the LPMC certifies Licensed Buying Agents ( LBAs ), who are responsibility, via Presidential decree, to play the role of the main collection sources of cocoa at the farm-gate policymaker at an operational level as well as fulfil discre- level. LPMC was originally set up as a marketing organi- tionary services. zation involved in : LACRA needs substantial assistance, both technical and financial, to fulfil this brief. In its new role, the current LPMC role of buying and selling of cocoa will be much more lim- ited and it will function more as a regulatory body. In this 12. Dand, R.J. ( 2008 ). Liberia – the Export Value Chain. p. 6. regard, LACRA is expected to play a key role in influenc- International Trade Centre. ing policy decisions in the sector. Box 2 : Support of the Government of Liberia to the cocoa sector 13 The initiatives carried out by the Government of Liberia in order to re-establish a strong cocoa sector include a directive ( 2009 ) to MoA, LACRA ( also known as LPMC ) and CDA to take the following actions : Abolish the $ 10,000 annual licence fees and set a standard on quality and quantity for all exporters, ( recommending ) that any export licence regime should consider applying volume-based incentives with qualifying benchmarks ; That LACRA work with MoA to create licensing and regulatory requirements for buying agents ; ( and that ) exportation of cocoa should be opened to all exporters, provided they meet the minimum requirements set by MoA and LACRA. The Government of Liberia has also, through the Economic Management Team, directed that LACRA should : • Define certain standards regarding required technical training for individuals to become LBAs – especially targeting university graduates, encouraging farmers’ groups and ensuring that individual candidates have the capacity to provide technical advice to farmers ; • That LACRA provide the Economic Management Team with annual updates on the quality and quantity of Liberian cocoa so that, in the future, an international grading system can be considered ; • That LACRA, with MoA, explore means to empower farmers to engage in the purchasing business without delay ; • That LACRA collaborate ‘…with the Cooperative Development Agency ( CDA ), immediately get involved in the process of initiating measures to keep farmers adequately and regularly informed of market information with respect to quality and prices, including airing farm-gate prices on community and national radio stations and posting in public places and major newspapers’ ; • That LACRA ‘… include as a qualifying requirement to be a Licensed Buying Agent ( LBA ) the provision of weighing scales subject to testing and approval.’ 13. International Institute of Tropical Agriculture ( 2009 ). Sustainable Tree Crops Program : A Proposed National Tree Cocoa Development Policy Framework ( draft ). THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

16 COCOA EXPORT STRATEGY 2014-2018 Source: jbdodane CENTRAL AGRICULTURAL ƒƒ Pre-harvest technology-under brushing, pruning, de- shading and the use of chemicals ; and, RESEARCH INSTITUTE ƒƒ post-harvest technology-harvesting, breaking of cocoa purse, fermentation, drying, packaging, storage and The Central Agricultural Research Institute (CARI) is man- transportation. dated with agronomic research that can be transplanted to the field through extension services and other mecha- CSTWG also works to ensure that good and improved nisms. CARI’s role will be very important in the context cocoa planting materials are available to, and affordable of elevating the research base for the sector, as well as by farmers and in this respect develops reference prices coordinating and collaborating with research centres / to make sure that local farmers receive a fair share of in- institutions in other countries. For instance, the potential ternational cocoa prices. for CARI to bring in new and improved varieties of cocoa crops from centres in Ghana has been widely explored and deemed high. However, this potential has not been BUSINESS SUPPORT / CIVIL realized because of the low capacities at the Institute. Additionally, there are currently very few resources dedi- SOCIETY / DEVELOPMENT cated to research on tree crops or in the production of NETWORKS tree crop planting materials. CARI’s infrastructure was destroyed during the Liberian civil war and the capacities Similarly, in the absence of a functional business sup- are still quite weak. port services network even in the capital region, the cocoa sector needs active everyday support to func- tion in a market-driven and professional manner ; to al- COCOA SECTOR TECHNICAL locate resources strategically ; to upgrade production and processing techniques ; and use better practices WORKING GROUP and technologies. Currently, this function is being per- The Cocoa Sector Technical Working Group comprises formed by various civil society alliances ( such as the of all stakeholders ( from farmers to exporters ) involved Sustainable Cocoa Enterprise Solutions for Smallholders in the coco industry in Liberia. It was established by the ( SUCCESS ) Alliance ), development institutions ( such as Ministry of Agriculture as a technical arm of the Agriculture the International Institute of Tropical Agriculture ( IITA ), Coordination Committee (ACC) which brings together ac- ACDI/VOCA ), or by programmes such the International tors operating in the agriculture sector. Fund for Agricultural Development Liberia – Smallholder Tree Crop Revitalization Support Project. The creation of The key role of the CSTWG is to promote the develop- a functional business support sector will require some ment of the cocoa industry. To achieve this objective, time – possibly between five and ten years. This, however, the group ensures that Liberian cocoa farmers, buyers is a process that must be managed so as to incentivize and exporters follow good agriculture practices. The fol- the formation of an ecosystem that can service the par- lowing training aspects are taught through farmer field ticular needs of the Liberian economy in practical and schools : result-oriented ways. DEVELOPMENT ACTIVITY IN THE SECTOR 17 DEVELOPMENT ACTIVITY IN THE SECTOR Development support to the cocoa sector commenced Table 1 is a list of important donor-related programmes soon after the end of the civil conflict. Led by the govern- that are directly or indirectly affecting the cocoa sector. ment, several international organizations, consulting firms / non-governmental organizations (NGOs) have engaged in a wide variety of interventions to the cocoa sector as part of support to the broader tree crop sector. NGOs have been providing free or subsidized services to offset gaps resulting from a weak extension service in the country. Source: jbdodane THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

18 COCOA EXPORT STRATEGY 2014-2018 Table 1 :Non-governmental programmes in support of the cocoa sector Programme Implementing agency Description The programme aims to support economic growth in agriculture, energy, infrastructure, and forestry ; and to distribute technology designed to halve production time and double output of tree crops ( palm oil and cocoa ) for smallholders, who also receive marketing assistance. The programme will Sustainable Tree Winrock International train farmers in improved agricultural techniques through FFS and farmer- Crops Programme – IITA to-farmer training and seed distribution. The expected outcome is to support farmer cooperatives in three counties, including wide uptake of the Freedom Mill ( hand operated oil mill that increases productivity by a factor of 200 ). The programme focuses on the following main areas of intervention : Comprehensive Comprehensive 1. Land and water development ; African Agricultural African Agricultural 2. Food and nutrition security ; Development Development Programme Programme 3. Competitive value chains and market linkages ; 4. Institutional development. The goal of this project is to invigorate the cocoa sector. It will provide training for 7,500 smallholder cocoa farmers, as well as seeds and Cocoa Livelihoods World Cocoa supplies, focusing on Bong, Nimba and Lofa counties. It is part of a five- Programme Foundation country programme targeting 200,000 cocoa growers in Cameroon, Côte d’Ivoire, Ghana, Liberia and Nigeria. Smallholders Tree This project will be active in cocoa, oil palm, rubber and coffee. It aims to Crop Rehabilitation World Bank empower farmers to build a stronger domestic value chain, thus increasing Support Project internal processing and selling their product directly to the market. ACDI/VOCA implemented an almost three year ( February 2008 to September 2010 ), US $ 3.9 million SUCCESS Alliance project funded by the United States Department of Agriculture that improved the livelihoods of 5,600 farmers. Livelihood ACDI/VOCA and its main partner IITA / Sustainable Tree Crops Programme Improvement ( STCP ) addressed the constraints in the cocoa value chain and mitigated for Farming ACDI/VOCA smallholders’ livelihood risk by encouraging the diversification of their Enterprises ( LIFE ) revenue sources. Phase 1 of the LIFE Project targeted Bong, Nimba and Phase 1 Lofa counties, which produce the bulk of Liberian cocoa. ACDI/VOCA and STCP implemented programme activities in Sanoyea, Zoegeh, Sacleapea, Voinjama, Kolahun, Quadu Bondi and Foya districts under Phase I, which ended in September 2010. LIFE, Phase 2 is a three year ( October 2010 to September 2013 ), approximately US $ 7 million SUCCESS Alliance project, also funded by the United States Department of Agriculture, that seeks to improve the livelihoods of 10,600 cocoa farmers in Bong, Nimba, Lofa, Gbarpolu, Grand Gedeh and River Gee counties, and is implementing the following activities : • Farmer Training : training smallholder farmers in cocoa production, crop diversification, pest management, post-harvest handling, marketing and Livelihood ACDI/VOCA’s signature Farming as a Business curriculum ; Improvement • Nursery Establishment and Tree Renewal : supporting the production for Farming ACDI/VOCA and distribution of cocoa seedlings through the establishment of Enterprises ( LIFE ) nurseries and rehabilitation of cocoa trees ; Phase 2 • Empowering New and Existing Farmer Organizations : strengthening farmer organizations to function as profitable commercial enterprises ; introducing farmer organization concepts to individual farmers with the objective of forming new farmer groups ; and improving farmers’ access to markets ; • Improving Access to Capital : promoting improved access to capital for cocoa farmers by fostering development of locally based solutions, training farmers in loan requirements and farmer responsibilities, and providing facilitation with financial institutions. DEVELOPMENT ACTIVITY IN THE SECTOR 19 Box 3 : Liberia Cocoa Corporation ( LCC ) LCC is a privately owned farming initiative that will undertake leasing and development of a 6,000 ha of nucleus cocoa plantations with complementary out grower farms and a smallholder programme. The initiative employs some 400 Liberians and has also made improvements to the road and bridge infrastructure. The plantation is located in Sazanor town, Quardu-Gboni district in Lofa county 20 kilometres from Voinjama, the county’s capital, and 414 kilometres from Monrovia, the nation’s capital. The project is valued at US $ 3.9 million and is 25 % Liberian owned. In the long term it is expected that the nucleus estate will be a key driver of a revived and regenerated Liberian cocoa industry. The soil and topography of Quardu-Gboni, where the project is situated, have been scientifically validated to possess good characteristics for cocoa cultivation. Two types of soils are characteristic of this area : namely, clay loam and sandy loam. With adequate rainfall and good soil management practices, both soil regimes can support the establishment and development of cocoa trees. Information from local farmers in the area indicates that the Quardu-Gboni region has been contributing significantly to Lofa county’s share of Liberian cocoa production, even in the pre-war period. The LCC has, as of July 2010, cultivated 60 ha with two varieties. The varieties were identified as stocks from Ghana and Côte d’Ivoire. These two varieties have a short gestation period of between 18 and 24 months. They are said to yield better than varieties which have been grown in the two countries previously. Information from the cocoa research institutes of these two countries indicates that the varieties can yield up to 2.3 tons per hectare. In any case, yield will be lower in the first and last few years of production ( i.e. estimated at between 1.6 and 1.9 tons/ ha in the first three years and the last five years, respectively ). The planting trees per hectare or stand per hectare is given at 1,122 trees. The cocoa seedlings at the LCC plantation have been intercropped with either banana or plantain crops. Nearly 10 % of the banana and plantain trees have reached physiological maturity and thus need harvesting. The banana and plantains appear to be well adapted to the soil regimes, although there is a foliar infection of black Sigatoka disease probably caused by the fungus Mycosphaerella fijiensis. The LCC management plans to plant and manage 447 ha, including the 60 ha already cultivated. As a result of this objective a seedlings nursery amounting to about 480,000 seedlings has been developed. Besides the cocoa operation, the investors have also been involved in road building and maintenance as well as bridge building to ensure that residents move from one area to the next without problems. In the foreseeable future, developers plan to build schools, clinics and freshwater points and get local farmers involved in skill development and management training. Source : John Zubah ( 2010 ). Lofa : US $ 30m Cocoa Project Underway. New Dawn Newspaper Liberia, 14 July. Available from : http ://www.thenewdawnliberia.com/index.php?option=com_contentandview=articleandid=1018 : lofa-us30m-cocoa-project-underwayandcatid=29 :rural-newsandItemid=61 THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

20 COCOA EXPORT STRATEGY 2014-2018 Box 4 : Typical cocoa supply chain14 A typical cocoa supply chain consists of a number of distinct steps, from initial production to primary and secondary processing and eventual manufacture into a wide variety of food and non-food products. Initial processing – fermentation and drying – starts on the farm after harvest and is carried out by the producer or a cooperative. Beans are then sold to traders, or directly to processors, for export to roasting and grinding plants, the majority of which are in located in consumer countries. Of all global cocoa production, 90 % is used for chocolate, while 10 % is used for flavourings, beverages and cosmetics. The main by-products of cocoa beans are husks and shells that are used as organic mulch, soil conditioner and poultry feed. 14. Potts, J., van der Meer, J. and Daitchman, J. ( 2010 ). The State of Sustainability Initiatives Review 2010 : Sustainability and Transparency, p. 95. International Institute for Sustainable Development ( IISD ) and the International Institute for Environment and Development ( IIED ). INPUT SUPPLY PRODUCTION Major production inputs for cocoa smallholder farmers In the case of abandoned farms, there is little or no tend- include planting material ( seeds / saplings ), polythene ing. ‘Just in time’ harvesting is practiced and produce is bags ( for use in nurseries ), fungicides, fertilizers, prun- handpicked. The main production phases for the other ing equipment, weighing scales, jute bags and moisture three establishment types can be divided as follows.17 meters.15 The supply chain for inputs is currently heavily dominated by imports and domestic production is weak. 1. Farm / plantation establishment : Apart from the increased costs to producers, the depend- –– Land shading and preparation ; ency on imported inputs also adds uncertainty, given the –– Shade planting ( or selection of ideal shade trees ) ; irregular supply. –– Nursery construction ; –– Planting of improved cocoa beans and or seedlings; There are primarily four types of production establish- ments for cocoa production in Liberia : 2. Maintenance of young cocoa plants. –– Maintenance of mature farms : 1. Abandoned farms : these cultivation areas – 25 to –– Weed control ( mainly under brushing ) ; 35 years old – were abandoned during the war and –– Pest and disease control ; have remained untended ever since. The crop ac- –– Shade management ; counts for the lowest quality cocoa and is harvested –– Fertilizer applications. by hand-picking ; 2. Individual smallholder farms : these are individually 3. Harvesting :18 owned by smallholders and average 1-3 hectares in –– Pod plucking – pods are removed using various size ; forms of knives, cutlasses and hooks ; 3. Farmer-based organizations ( FBOs ) such as coop- –– Pod opening – extracting of cocoa beans from the eratives : most of these were set up after the end of pod by hitting them against each other, a stone or the conflict with programming support from various a stick ; NGOs and international actors ; –– Preparation of fermentation containers ( baskets, 4. Commercial plantations : these use the highest lev- boxes or heaps ) ; els of mechanization and are large scale plantations –– Transportation of beans for fermentation. primarily for export purposes. There are few of these plantations, LCC 16 being one example. 17. Main stages and activities derived from CSTWG ( 21 April 2009 ). Outline for Liberia Cocoa Sector Strategic Plan ( draft ), and NES analysis. 15. CSTWG ( 21 April 2009 ). Outline for Liberia Cocoa Sector Strategic 18. Smallholder farmers primarily engage in manual harvesting, Plan ( draft ). while FBOs and large scale commercial plantations use greater 16. See box 3 for more details. mechanization levels. CURRENT SECTOR OPERATIONS 21 TRANSFORMATION AND PROCESSING Foya, Ganta and Harper border crossings respectively. Although informal, this distribution activity is highly organ- In Liberia, the transformation and processing activities ized and prevalent. for the cocoa value chain are limited to fermentation and drying. The key activities include : Individual smallholder farmers interface with a variety of intermediaries – either with individual LBAs ; sub-agents / Selection of proper fermentation containers ; middlemen ( collecting agents ) of LBAs ; or village level buyers who then sell to the sub-agents, the agents or di- ƒƒ Proper mixing of cocoa beans in the fermentation rectly to buyers in main buying centres. Smallholders also container ; approach the Liberian cross-border traders mentioned ƒƒ Careful obser vation of fermentation process above. Local buying centres transport their accumulated ( stages for 6-7 days ) ; cocoa to regional buying centres ( typically by the LBAs ) ƒƒ Proper drying of beans ; where it is assembled, loaded and transported directly ƒƒ Sorting out foreign matter from the dried cocoa beans to exporters. and measurement of moisture content ; ƒƒ Grading of cocoa beans and separation according FBOs either sell the cocoa to LBAs ( or their sub-agents ), to grade type ; to buyers in main buying centres, or even directly to ƒƒ Bagging cocoa beans in jute bags, weighing and Liberian and international exporters. Large scale com- stacking them properly ; and mercial plantations ( such as LCC ) sell the cocoa to inter- ƒƒ Proper labelling. national / Liberian exporters directly. As discussed above, Liberian and international exporters DISTRIBUTION source cocoa either directly from FBOs and commercial plantations or from main buying centres. While the cocoa In the case of abandoned farms, distribution is primarily ‘form’ remains the same as it travels upstream, the levels undertaken by Liberian cross-border traders who trade of aggregation increase as iterations of buyers accumu- via either informal or formal mechanisms across borders late cocoa from various sources. into Sierra Leone, Guinea and Côte d’Ivoire through the Box 5 : Licensed Buying Agents LBAs are individuals with no required formal training who tend to monopolize the intermediation business. They are usually the only contact smallholders have with the market and effectively cut off the end producer from the rest of the value chain. They dominate collection, sorting, storage and delivery to LPMC or to exporters directly. Once the cocoa has been secured from the farmer, it may pass through several agents before it arrives at the port for final conditioning and export. Though form does not change, some upstream agents perform tasks that may add value such as additional drying and sorting of the beans. LPMC is responsible for licensing and monitoring the work of LBAs. As a routine practice, LBAs subcontract to sub-agents who may not be licensed. Licensed LBAs are typically given access rights to procure cocoa by area. LBAs are expected to renew their licence with LPMC annually at a cost of US $ 300, although this may occur less frequently than expected given the low enforcement capabilities of LPMC. Collectively, these agents are typically concerned only with volumes and therefore routinely mix A grade beans and aggregate quantities of cocoa with lower grades to make up the volumes as they move downstream. This mixing inevitably reduces the price that the cocoa can fetch. Storage facilities are grossly inadequate and tend to not be compliant with even the most basic hygiene requirements. In recent years exporters have begun to ignore LBAs and procure cocoa directly from individual smallholders and farmer groups as a means of regulating quality levels. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

22 COCOA EXPORT STRATEGY 2014-2018 Source: jbdodane EXPORT TO MARKETS ƒƒ Liberia Marketing International ; ƒƒ Georgia Enterprises, Inc. ; Cross-border traders export the cocoa ( originating from ƒƒ Agriculture Products Processing Company ; the abandoned farms ) to bordering countries such as ƒƒ Liberia Commodity Export Company – currently Côte d’Ivoire, Guinea and Sierra Leone. Some of the co- the largest local exporter of Liberian cocoa ; coa is re-exported to neighbouring countries while the ƒƒ Sea+Land Traders International ( currently controls majority it is either sold to grinders, who further sell the Liberia Marketing International ) ; product to cosmetics manufacturers, or to low end con- ƒƒ Transmar Commodity Company, Ltd ; fectionary manufacturers. ƒƒ OLAM Industries ; ƒƒ Cadbury Ltd ; International and Liberian exporters sell the product to in- ƒƒ Amajaro Commodity Company ; ternational grinders in foreign markets that include the EU, ƒƒ Other European buyers / chocolate makers North America, and Asia. Exporters are required to pay – traditional international buyers of Liberian cocoa. US $ 1,000 a year for their export licence to LPMC,19 plus other fees to MoCI and other relevant ministries. The cocoa is processed into products such as choco- late, cocoa butter, cosmetics, etc. Post processing / pack- There are between 10 and 20 exporters of cocoa in aging, the final product is distributed to end consumers Liberia. Liberia Marketing International’s exports consti- in both conventional and premium segments in the EU, tute 60 % of the total exports ( formal ) from Liberia. The the United States, Japan and emerging markets such as main ‘pure-play’ cocoa exporters in Liberia are : India. 19. Ibid. GLOBAL MARKETS – A SNAPSHOT 23 GLOBAL MARKETS – A SNAPSHOT Figure 8 : Forecast cocoa demand and supply 9000 16000 Forecast 8000 14000 7000 12000 6000 10000 (thousand tonnes) (US$ per tonne) 5000 8000 4000 6000 3000 4000 2000 2000 1000 0 000 1960/61 1963/64 1966/67 1969/70 1972/73 1975/76 1978/79 1981/82 1984/85 1987/88 1990/91 1993/94 1996/97 1999/00 2002/03 2005/2006 2008/2009 2011/2012 2014/2015 2017/2018 2020/2021 2023/2024 2026/2027 2029/2030 2032/2033 2035/2036 Global stocks of cocoa beans Net production Grindings Cocoa bean price (real terms) - right scale Source : Pipitone, L. ( 2012 ). The Future of the World Cocoa Economy : Boom or Bust? Presentation given at the International Conference on Cocoa, Rome, 28-30 May. Global trends Figure 8 23 provides an overview of the current and fore- cast global cocoa market trends. Buyers in the main co- Between 2002/2003 and 2011/2012 the global production coa-purchasing multinationals estimate that demand for of cocoa increased, with annual rates that fluctuated be- cocoa will continue to increase at least until 2030 and that tween -10 % and 18 %.20 Grindings have grown at a slow- this will cause the value of cocoa to rise as well. Indeed, er ( albeit steady ) pace, ranging between 2 % and 7 %21 they estimate that demand will surpass supply by 2020 increases in annual growth rates, with the exception of and, if efforts are not put in place to expand supply, the the 2008 / 2009 season which was affected by the global chocolate industry ( and other downstream industries ) financial crisis. As an indication of the large fluctuation will likely face a major shortage after 2020. International typical of the sector, three seasons during this period ex- Cocoa Organization ( ICCO ) expects a sharp increase in perienced a large production surplus, while two seasons price between 2013 and 2025. The situation should stabi- experienced a significant production deficit.22 lize in 2026 up to 2036, when supply is expected to stead- ily surpass demand and prices will decrease. 20. International Cocoa Organization ( 2012 ). The World Cocoa Economy, Past and Present, p. 1. Available from http ://www.icco. org/about-us/international-cocoa-agreements/cat_view/30-related- 23. The green line reports the international price of cocoa beans in documents/45-statistics-other-statistics.html. real terms ( right scale ), while the blue and red lines report respectively 21. Ibid. the worldwide supply and the demand of cocoa. The bar graph tracks 22. Ibid. worldwide stocks. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

24 COCOA EXPORT STRATEGY 2014-2018 MAJOR IMPORTERS International trade of cocoa is fundamental to ensure worldwide supply because the main consumers do not The world market for cocoa stood at US $ 8.2 billion in directly produce this commodity. The growth rate of 2012, reflecting an annual growth rate of 4 % between consumption over the last five years was 2 % per year in 2008 and 2012 ( although the sector saw a drop of 22 % Europe, 3 % per year in the United States, over 6 % per between 2011 and 2012 ). Eight of the top 10 importers year in the newly emerging markets and over 12 % in the are from Europe ( including Turkey ) and together absorb high premium quality segment. World consumption of co- approximately 56 % ( by value ) of the total imported value. coa is expected to rise by 1%-2% per annum over the next few years, especially in in Brazil, the Russian Federation, Figure 9 indicates the regional distribution of worldwide India, Japan and China. Cocoa Consumption. Consumer demand in Europe and the United States is driven by a preference for specialty chocolate products, Figure 9 : World consumption of cocoa beans with a high content of cocoa from specific countries. Latin America 9% Asia & Oceania North America 15% 24% Africa 3% Other Europe European 11% Union 38% Source : ICCO. Source: © ACDI / VOCA 2011. Table 2 : Main importing markets for cocoa HS 1801, 2012 Value imported Annual growth in Annual growth in Share of world Rank Importers in 2012 value 2008–2012 (  % ) value 2011–2012 (  % ) imports (  % ) ( US $ thousands ) World 8 260 838 4 -22 100

1 Netherlands 1 664 314 7 -23 20.1

2 United States of America 1 034 221 4 -30 12.5

3 Germany 917 604 6 -32 11.1

4 Malaysia 877 534 -3 -13 10.6

5 Belgium 596 973 10 -17 7.2

6 France 382 465 -2 -22 4.6

7 Italy 283 213 15 -16 3.4

8 United Kingdom 281 322 -3 -27 3.4

9 Turkey 243 183 14 -12 2.9

10 Spain 237 750 1 -15 2.9 Source : ITC Trade Map. GLOBAL MARKETS – A SNAPSHOT 25 Table 3 : Major exporters in the sector Value exported in Annual growth in Annual growth in Share of world Rank Exporters 2012 value 2008–2012 value 2011–2012 exports (  % ) ( US $ thousands ) (  % ) (  % ) World 8 438 809 8 -18 100

1 Côte d’Ivoire 2 937 128 8 -20 34.8

2 Ghana 1 971 660 23 -5 23.4

3 Nigeria 540 461 2 -38 6.4

4 Cameroon 424 106 1 -23 5

5 Netherlands 417 124 38 -22 4.9

6 Indonesia 384 830 -19 -37 4.6

7 Belgium 340 604 1 16 4

8 Ecuador 339 558 13 -28 4

9 Dominican Republic 178 456 12 8 2.1

10 Estonia 158 715 17 -13 1.9 ... … … … … …

21 Liberia 24 267 28 -14 0.3 Source : ITC Trade Map. MAJOR EXPORTERS tariff of 0.04 % compared to the tariff of 0.3 % on its non- agricultural exports.24 Global cocoa supply is dominated by West African coun- tries. Among the top ten exporters, three West African As a member of the Economic Community of West African states – Côte d’Ivoire, Ghana, and Cameroon – alone con- States ( ECOWAS ), Liberia has generally committed to trol 63.2 % of global exports. Another African exporter, adopting its Common External Tariff and to a phased re- Nigeria, accounts for 6.4 %. Africa is projected to remain duction and gradual elimination of tariffs and nontariff the foremost cocoa producer globally at least for the near barriers on products of community origin. It currently has future. tariffs ranging from 0 % to 25 %, but with the adoption of the Common External Tariff the maximum tariff will be In recent years, Asian and Central / Latin American pro- reduced to 20 %.25 ducers have increased production levels and now figure as leading exporters. For instance, Indonesia, Ecuador, Aided by sustained government and donor support, and the Dominican Republic were all among the top ten Liberian cocoa exports have been steadily on the rise global exporters of cocoa in 2012. since the end of the civil war. This is indicated by the high annual growth rate of 28 % between 2008 and 2012. The Netherlands, Belgium and Estonia are not growers, Approximately 10,559 tons were exported in from Liberia only resellers of cocoa and derived products such as in 2012. As indicated in Table 3, Liberia is a minor player chocolate and cocoa butter. currently in the global market, accounting for only 0.3 % of global sales. In 2012 it was ranked 21st globally among cocoa exporters. LIBERIAN EXPORTS As indicated in Table 4, the Netherlands, Spain and PERFORMANCE Germany were the top three markets for Liberian cocoa The weighted average rest of the world tariff imposed on in 2012. Liberia’s exports is a low 0.3 %, indicating favourable ac- cess conditions relative to the averages of 3.5% and 3.9% for sub-Saharan Africa and Least Developed Country 24. World Bank ( 2010 ). World Trade Indicators 2009/10 : Liberia comparators, respectively. The country’s agricultural ex- Trade Brief. Washington, DC : World Bank. Available from http ://info. ports have easier access to international markets with a worldbank.org/etools/wti/docs/Liberia_brief.pdf. 25. Ibid. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

26 COCOA EXPORT STRATEGY 2014-2018 Figure 10 : Market access map for Liberia’s exports of cocoa ( HS 1801 ) Level of Greenland Protection 0-5% 6-10% 11-15% Norway Russian Federation 16-20% Canada 21-30% 31-40% 41-50% Ukraine Mongolia >50% Kazakhstan United States of America Italy Turkey China Iraq Algeria Egypt Mexico India Mali Niger Sudan Peru Brazil Australia Source : ITC Market Access Map 2012. Table 4 : Top current importers of Liberian cocoa HS 1801, 2012 Value Share of Quantity Share of Annual growth Annual growth Export exported in Liberia’s exported in Liberia’s in value in value market 2012 ( US $ exports (  % ) 2012 ( tons ) exports (  % ) 2008–2012 (  % ) 2011–2012 (  % ) thousands ) Total 24 267 10 559 100 28 -14

1 Netherlands 13 212 54.4 5 871 54.4 --

2 Spain 4 178 17.2 1 918 17.2 59 62

3 Germany 3 240 13.4 1 155 13.4 -17 -75

4 Malaysia 2 803 11.6 1 184 11.6 --

5 Canada 388 1.6 249 1.6 -- 454

6 Estonia 288 1.2 120 1.2 -- -89

7 Belgium 144 0.6 58 0.6 -- -98

8 France 14 0.1 4 0.1 -- -95 Source : ITC Trade Map 2012. Although Estonia represents a top importer of cocoa, the In 2012 Liberian cocoa exports to Estonia amounted to bulk of imported cocoa is re-exported to countries such US $ 288,000, which reflects a sharp dip from 2011 im- as the Russian Federation – in 2011, nearly 90,000 tons26 ports of US $ 2.6 million. In this sense, Estonia is not a true of imported cocoa transited through to external markets. importer but more of a transit waypoint. 26. Estonian Review ( 2012 ). Among Grains, Estonia Mainly Exported Barley in 2011, 6 November. Available from http ://www.vm.ee/?q=en/ node/15840. GLOBAL MARKETS – A SNAPSHOT 27 MAIN TRENDS IN LIBERIAN Côte d’Ivoire, there is also reverse flow of cocoa ( for instance from Côte d’Ivoire ) into Liberia and out via COCOA EXPORTS various routes. ƒƒ The survival rate of export relationships is low. As ƒƒ Informal cross-border trade remains an important indicated below, the probability of survival of an export component of trade into and out of Liberia. In the relationship goes down to about 50% after the first year absence of effective border controls, the cocoa stock and then dramatically falls to a little less than 40 % by being shipped out of the Mano River Union region is a the end of the second year. By the end of the third and mix of beans from all around the subregion. This is pri- fourth years the probability of survival is around 20 %. marily due to the fact that cocoa farmers sell produce This trend indicates the fragility of export relationships to markets that are closest to them, which may well be and the challenges that exporters face in sustaining across the border. While the current level of informal these relationships. cross-border trade is still high, it has improved to an ƒƒ An analysis of the decomposition of export growth in extent from the situation right after the war when nearly the sector confirms that growth primarily took place two-thirds of Liberian cocoa was being exported to through existing relationships ( existing products to international destinations via neighbouring countries. existing markets ), and to a smaller extent through ex- ƒƒ Liberia is both an exporter and importer in cross- ports ( of cocoa beans ) exported to new markets. This border trade terms – meaning that while there is indicates that some market diversification did occur a substantial amount of Liberian cocoa reaching between 2002 and 2012 . However, it is much smaller international markets via neighbouring Guinea and than expected. Figure 11 : Survival rate of cocoa sector exports between 2002 and 2012 Export Relationships - Priority Sector Cocoa Survival Rate 2002-12 1 8 Probability of Survival 6 4 2 0 0 5 10 Year Source : ITC calculations based on 4-Digit Comtrade HS 2002 data. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

28 COCOA EXPORT STRATEGY 2014-2018 Figure 12 : Decomposition of export growth in the cocoa sector between 2002 and 2012 Decomposition of Export Growth Cocoa sector LBR, HS2 2002-12 0.85 0.80 0.60 % 0.40 0.16 0.20 0.00 -0.00 -0.00 Old Prods to Old Mkts New Prods to New Mkts Fall Old Prods to Old Mkts Extinct Source : ITC calculations based on 4-Digit Comtrade HS 2002 data. Figure 13: Product diversification in Côte d’Ivoire and Ghana IVORY COAST IVORY COAST GHANA GHANA Product Product Amount (in ons Amount (in of tons of Top Top importing countries importing countries Product Product Amount (in ons Amount (in of tons ofTop Top importing countries importing countries semi-processed semi-processed semi-processed semi-processed products products products products Cocoa total total Cocoa 1.176,877 1.176,877 Netherlands (29.75%), Netherlands US US (22.38%), (29.75%), (22.38%), Cocoa total total Cocoa 760,192 760,192 Netherlands (30.75%), Netherlands Malaysia (30.75%), (7.78%), Malaysia (7.78%), Estonia (8.55%) Estonia (8.55%) UK (6.49%) UK (6.49%) Cocoa beans, whole or Cocoa beans, Cocoa whole or beans, whole or 685,482 685,482 Netherlands (32.09%), Netherlands Malaysia (32.09%), (8.61%), Malaysia (8.61%), Cocoa beans, whole or 925,129 925,129 Netherlands (29%), Netherlands US US (25,26%), (29%), (25,26%), broken, raw or roasted broken, raw or broken, roasted raw or roasted UK UK (6.85%) (6.85%) broken, raw or roasted Estonia (8,94%) Estonia (8,94%) Cocoa powder, Cocoa not not powder, 239 239 SpainSpain (41.33%), Netherlands (41.33%), (41.87%) Netherlands (41.87%) Cocoa powder, Cocoa not not powder, 31,983 31,983 Netherlands (35.92%),Estonia (24,92%), Netherlands (35.92%),Estonia (24,92%), containing addedadded containing sugar or sugar or containing addedadded containing sugar or sugar or US US (12,27%) (12,27%) otherother sweetening matter sweetening matter otherother sweetening matter sweetening matter Cocoa paste,paste, not not defatted Netherlands (34.84%), US US (18.91%), Cocoa paste,paste, Cocoa not not defatted defatted56,668 56,668 SpainSpain (16.37%), Germany (16.37%), (14.89%), Germany (14.89%), Cocoa defatted 112,401 112,401 Netherlands (34.84%), (18.91%), (liquor) US US (8.33%) (liquor) and and (liquor) wholly or partly wholly or partly Netherlands (13.60%) Netherlands (13.60%) (liquor) (8.33%) deffated (cocoa deffated cake)cake) (cocoa Cocoa butter, Cocoa fat and butter, fat oil and oil 60,23660,236 Netherlands (37.51%), Netherlands France (37.51%), (20.27%), France (20.27%), Cocoa butter, Cocoa fat and butter, fat oil and oil 13,90213,902 Netherlands (30.07%), Netherlands France (30.07%), (19.42%), France (19.42%), Poland (12.97%) Poland (12.97%) UK UK (17.01%) (17.01%) Cocoa shells, Cocoa husk,husk, shells, skinsskins 47,126 47,126 US US (32.57%), France (32.57%), (18.80%), France (18.80%), Cocoa shells, Cocoa husk,husk, shells, skinsskins3,9003,900 Netherlands (45.28%), Netherlands SpainSpain (45.28%), (32.93%) (32.93%) and and otherother cocoacocoa wastewaste Netherlands (18.20%) Netherlands (18.20%) and and otherother cocoacocoa wastewaste Source: Capelle, J. ( 2009 ). Towards a Sustainable Cocoa Chain, pp. 10-11. Oxfam International Research Report. COMPETITION IN TARGET MARKETS clude cocoa beans (dried and fermented), cocoa powder, Figure 13 above provides an overview of the variety of cocoa paste with fat, defatted cocoa butter, and cocoa products being developed by regional competitors Côte waste ( residue biomass ). d’Ivoire and Ghana. West Africa is the primary global hub of cocoa production. Three West African countries Nigeria is also a strong emerging exporter of cocoa beans – Côte d’Ivoire, Ghana and Cameroon – together account and has been steadily strengthening export relationships for 63.5% of the world’s cocoa production.27 The five main in the EU and North America. Nigeria has also started to forms of cocoa being exported from these countries in- make strides in product diversification. Overall, Liberia’s regional competitors not only have a steady foothold in exports of cocoa beans but have also recently started 27. International Cocoa Organization ( 2013 ). to build processing capabilities, indicated in the rising Production – Latest figures from the Quarterly Bulletin of Cocoa Statistics: trends of exports from this sector. In this regard, Liberian 2012/2013 forecasts. Available from http ://www.icco.org/about-us/ international-cocoa-agreements/cat_view/30-related-documents/46- cocoa faces significant challenges in catching up with its statistics-production.html. key competitors. COMPETITIVENESS CONSTRAINTS 29 COMPETITIVENESS CONSTRAINTS The four gears framework presented below determines Addressing these above categories would exhaustively re- the major constraints – within the country as well as out- solve most major competitiveness bottlenecks. However, side – to export development and ways to overcome them. for an export strategy to be sustainable, it out to make the greatest socioeconomic impact. Issues that have a pro- ƒƒ Supply-side issues affect production capacity and found impact on people’s lives need to be addressed in include challenges in areas such as availability of the NES design initiative. appropriate skills and competencies ; diversification capacity; technology and low-value addition in the sec- ƒƒ Social and economic concerns include poverty reduc- tor’s products. This group of issues is also referred to tion, gender equity, youth development, environmental as the border-in gear. sustainability and regional integration. These develop- mental concerns form the development gear. ƒƒ The quality of the business environment includes issues that influence transaction costs, such as reg- Border-In Issues Border Issues ulatory environment; export procedures and documen- tation ; infrastructure bottlenecks; certification costs; Internet access and cost of export credit insurance. Capacity Cost of These constraints are grouped together and classified Development Doing Business as the border gear. d ls an kil hip re rm g s rs Di Ca ctu efo ini neu ve pa tru R Fa Trad lop re rs ci cil e ve rep ifi ty es r y ita ca ra ato tio De Ent tio n Inf egul n d ƒƒ Market entry issues include questions of competitive- an R ness that are essentially external to the country ( but may also be manifested internally ), such as market access ; market development ; market diversification Poverty Alleviation Market Access and export promotion. These are referred to as the and Gender Issues and Policy Reform border-out gear. nt me E Su nvir tio n Tra lop mo eve ion s o d Cli taina nme ro ing Se e Su l D rat ma bi nta l P nd r vi pp na eg te lity l na ra ce or t gio Int Ch an tio d B s R e and an d ge Na an Development Issues Border-Out Issues THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

30 COCOA EXPORT STRATEGY 2014-2018 Box 6 : The border-in gear (supply-side issues) • The absence of a reliable, functioning inputs market exerts logistical challenges and creates increases in operating costs. • An ageing stock of cocoa trees is contributing to low yield and productivity levels. • Poor quality management at the farm-gate level affects prices and competitiveness of Liberian cocoa beans in external markets. • A shortage of scales leads to volume discrepancies across the value chain. • The impoverished and outdated skills base contributes to the overall weak supply consistency and quality levels. • Weak organization levels in the cocoa sector inhibit benefits to be gained from networking and collaboration at the producer level. • Traditional succession practices have led to the fragmentation of land. • Weak processing infrastructure results in weak quality and volume levels. • Demographic trends indicate a diminishing workforce in the cocoa sector. • The unreliability of cocoa supply affects the operations of exporters. The absence of a reliable, functioning inputs Poor quality management at the farm-gate market exerts logistical challenges and creates level affect prices and competitiveness of increases in operating costs Liberian beans in external markets The majority of inputs used in the cocoa sector, including Rudimentary quality management infrastructure is caus- saplings and fertilizers, are imported from neighbouring ing substantial losses to the sector. A large proportion of countries, including Côte d’Ivoire and Ghana. The ab- the cocoa beans sold by cocoa farmers at the farm-gate sence of a functioning inputs market in Liberia translates level has a high percentage of moisture and mould, which into increased operating costs and logistical challeng- makes the produce unviable in export markets. es ( especially in the rainy season ) for cocoa farmers. As an example, a package of chemical fertilizers and pes- Additionally, Liberian ‘A’ grade beans are routinely mixed ticides imported from Ghana costs about US $ 400 / ton. with lower grade beans due to poor handling practices As a generalization, cocoa smallholder farmers cannot by both collection agents ( including LBAs ) as well as the afford these. Additionally, crucial quality inputs such as producers that are selling the product. At a general level, replacement tree stocks, fertilizers, etc. are all imported neither are well-versed or disciplined regarding the im- and in short supply. portance of segregating cocoa by grades. An ageing stock of cocoa trees is contributing A shortage of scales leads to volume to low yield and productivity levels discrepancies across the value chain The major constraint for cocoa production lies in the old The shortage of scales at the village level ( where the ma- age of trees. No significant replanting activities have been jority of cocoa is collected by LBAs / intermediaries ) is conducted for the last 25 years due to the war and the lack another important challenge. The consequence of this of improved planting material for refilling and replanting. shortage has been sales being by estimated quantity, ei- As a consequence of long years of neglect, cocoa planta- ther by bucketload or sack,28 rather than proper weights. tions have degenerated into secondary forest. These estimations lead to incorrect payments and prob- lems of weight correlation further downstream in the value chain. In addition to the shortage of scales, there is a need to reinforce the necessity of discipline when it comes to using scales ( by both producers and LBAs ) when they are available. 28. Dand, R.J. ( 2008 ). Liberia – the Export Value Chain. p. 12. International Trade Centre. COMPETITIVENESS CONSTRAINTS 31 The impoverished and outdated skills generations. Per capita land holdings have become small- base contributes to the overall weak supply er over time, effectively reducing efficiency gains and pro- consistency and quality levels ductivity levels. The small unit size of most land holdings reduces the potential to increase productivity and invest- The skills base in the cocoa sector is extremely weak, the ment in the sector. It is therefore imperative to increase result of the conflict and inadequate development of the the levels of organization among smallholder farmers so technical and vocational education and training ( TVET ) that they are able to benefit from the economies of scale sector in general. that larger players enjoy. ƒƒ There is a paucity of capacity – technical and manage- rial – in the sector. Weak processing infrastructure results ƒƒ Farming techniques used by cocoa farmers are ba- in weak quality and volume levels sic and unsophisticated, resulting in low productivity yields. There is an overall lack of understanding of, The current capacity of cocoa producers for developing and expertise with, sustainable land management products with high value addition is low because of the techniques and best practices such as Global Good lack of secondary infrastructure in key production areas. Agricultural Practices ( GAP ). The vast majority of Liberian cocoa is therefore exported ƒƒ The Liberian entrepreneurship culture, which is highly in raw form. pervasive in the society, has been effectively under- mined by decades of forced inaction. The sector also requires investments in secondary infra- structure such as shared warehouses, buying stations, drying / sorting yards and covered solar dryers. Some Weak organization levels in the cocoa sector progress has been made in introducing solar dryers and inhibit benefits to be gained from networking scales ; however, these need to be made available more and collaboration at the producer level widely all over the cocoa belt. Organization of farmers and intermediary entities into Processing practices, fermentation and drying are not ‘effective and non-exploitative’ cooperatives is an im- conducted properly, hampering the quality of the cocoa perative. At the local level, FBOs and community-based beans. In spite of extension programmes 30 under vari- organizations have limited organizational capacities. This ous agricultural development projects in the past, yields affects the negotiating ability of the farmers, who would and quality have remained low. Processing facilities are otherwise benefit from stronger negotiating power as a very rudimentary, consisting mainly of bamboo mats for group. Although there are some instances of cooperatives the drying of cocoa. As a result of all these factors sector pooling together efforts for joint procurement, there are operators have low capacity for developing products with no other services such as trainings, information on best medium-high value addition. practices etc. being provided by cooperatives. Greater organization will also help in the promulgation of Demographic trends indicate a diminishing best practices and higher quality yields, especially rel- workforce in the cocoa sector evant in the context of the weak extension services in the country. The experience of ACDI/VOCA demonstrates Demographic and migration trends paint a pessimistic that properly organized FBOs and cooperative associa- picture of the agriculture sector in general, including the tions who sold bulked and graded cocoa realized a more cocoa sector. On one hand, the rapidly ageing workforce than 100 % increase in price received. 29 The increased in the country means that the labour base needs to be organization levels also help farmers negotiate on better augmented. Young Liberians are increasingly opting to terms with LBAs. move to the cities given the persistently high poverty lev- els in rural areas, and therefore their participation in the overall agricultural value chain remains limited. Traditional succession practices have led to the fragmentation of land Traditional succession practices, coupled with Liberia’s high birth rate 5.16 in 2011, have an important bearing on the fragmentation of agricultural land among several 30. There are exceptions though. LIFE-sponsored associations, 29. International Fund for Agricultural Development ( 2011 ). developed with support from ACDI/VOCA, all have solar dryers The Republic of Liberia Smallholder Tree Crop Revitalization Support in addition to other equipment and are producing a large proportion Project ( STCRSP ) Project Design Report. of Grade 1 cocoa. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

32 COCOA EXPORT STRATEGY 2014-2018 The unreliability of cocoa supply affects the operations of exporters Even the larger companies that procure cocoa from local producers have to contend with a multitude of challenges, among which the unreliability of the local supply is an important one. The unreliability leads to challenges both in aggregating the procured cocoa to levels that would make shipping economical, and in managing customer commitments adequately. Box 7 : The border gear (business environment issues) • Poor technical support from extension services results in negligible application of new agricultural knowledge in the sector. • Weak institutional quality management infrastructure. • The LBA model is in urgent need of an overhaul. • Lower margins to farmers are a cumulative result of a variety of factors. • There is a need to fast-track ICCO membership. • Weak TVET infrastructure. • Artificial cocoa standards are impeding development of competitiveness in the sector and need to be replaced with international standards. • There is a need to restructure the role of LPMC from a marketing to a regulatory one ( LACRA ). • Infrastructure in the form of road networks inhibits operations and results in delays and increased costs to operators. • Irregular electricity supply inhibits processing operations. • Access to finance is challenging for smallholder farmers. Poor technical support from extension services support identified for cocoa producers in Liberia as noted results in negligible application of new below : agricultural knowledge in the sector 1. Making available new plant material in a form most Extension services – typically the bridge between the re- likely to succeed ; search base, and the field – are largely absent in Liberia. 2. Advice on maintaining plantations and post-harvest Extension services across the agriculture sector are weak processing of the beans. and very little technical coverage is available in the rural parts of the country. MoA has extension coordinators rep- For smallholders, access to quality management ser- resenting the Ministry at the county level ; however, these vices, to techniques and to basic equipment is directly coordinators lack hard-core staff who are adequately related to the availability and affordability of a functional trained in extension techniques. extension support network / system. The lack of an exten- sion system responsible for training, advisory services, Traditional varieties of seeds used in Liberia are not test- facilitating improved input supply and providing planting ed for their yield potential, quality and pest resistance. materials has resulted in inadequate knowledge of farm- New varieties from Ghana and Côte d’Ivoire are being ers on proper maintenance of plantations and processing. introduced ; however the promulgation among farmers remains slow. There are two broad areas 31 of extension 31. Dand, R.J. ( 2008 ). Liberia – the Export Value Chain. p. 19. International Trade Centre. COMPETITIVENESS CONSTRAINTS 33 Box 8 : Quality management in Liberia In terms of compliance, quality management is largely voluntary among Liberian micro, small and medium size enterprises due to a lack of capacity on their end and due to official oversight and regulatory deficits. Quality regulations as they currently exist on paper are yet to be accepted as a way of life on a daily basis and this has a negative impact on the quality of Liberian exports. Consequently, enterprises are unable to compete in international markets and instead operate primarily in the domestic area. This culture needs to be modified through a process of change management and through a structured introduction of comprehensive regulatory reforms and implementation of monitoring mechanisms on the ground. This change management process must also include information dissemination campaigns to increase awareness of quality management. On-site training programmes and the development of community radio programmes are needed to address awareness on how to change processing and growing practices. Weak institutional quality management infrastructure NES sectors and consequently Liberian enterprises cater primarily to the domestic markets. Liberia’s quality infrastructure was almost completely de- stroyed during the country’s 14 year civil war. While prin- The NSL is currently under observation by ISO and is ciples of quality management have gradually evolved at not able to issue certificates for quality. It also suffers the policy level in post-conflict Liberia, implementation from severe human capital and technical weaknesses. on the ground has stagnated due to financial, technical Warehousing facilities are inadequate and tend to not be and human capital constraints. These constraints have compliant with even the most basic hygiene requirements consistently prevented standardization and growth of the as laid out by best practices. Box 9 : International cocoa grading standards Following are the international grading standards that Liberian cocoa should ideally adhere to.* Grade I (Grade A) – thoroughly dry, free from foreign matter, smoky beans and any evidence of adulteration and which contains not more than three per cent ( 3 % ) by count of all other defects : • Mouldy beans, maximum three per cent ( 3 % ) by count ; • Slaty beans, maximum three per cent ( 3 % ) by count ; and • Insect damage, germinated or flat beans, total maximum three per cent ( 3 % ) by count. Grade II (Grade B) – thoroughly dry, free from foreign matter, smoky beans, and any evidence of adulteration and which contains not more than four per cent ( 4 % ) by count of mouldy beans, not more than eight per cent ( 8 % ) by count of slaty beans and not more than six per cent ( 6 % ) of all other defects : • Mouldy beans, maximum four per cent ( 4 % ) by count ; • Slaty beans, maximum eight per cent ( 8 % ) by count ; and • Insect damage, germinated or flat beans, total maximum six per cent ( 6 % ) by count. *CSTWG (21 April 2009). Outline for Liberia Cocoa Sector Strategic Plan (draft). THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

34 COCOA EXPORT STRATEGY 2014-2018 The LBA model is in urgent need of an overhaul Weak TVET infrastructure As discussed in previous sections, LBAs are the main The curricula of universities and polytechnics is outdated actors responsible for sourcing cocoa at the farm-gate and not in line with the needs of cocoa producers, pro- level. LBAs may hire middlemen / sub-agents ( collection cessors and exporters. This is in line with the rest of the agents ) who procure the cocoa on behalf of the LBA. The country’s TVET infrastructure that was destroyed during LBA model suffers from a variety of problems : the conflict and there is an important need to revitalize this base. Research institutions such as CARI and universi- ƒƒ It is quite possible that the majority of collection agents ties alike are struggling in terms of scarcity of resources are unlicensed ( by the LPMC ), since LPMC does not – ­financial and human capital as well as technical. have the resources for monitoring and enforcing this annual requirement. Apart from the loss of revenue to LPMC, a major consequence is that the untrained Artificial cocoa standards are impeding collection agents are unable to sort the cocoa grains development of competitiveness in the sector properly at the farm-gate by grade. The mixed grades and need to be replaced with international severely diminish quality levels and reduce the prob- standards ability of exports right at the source. ƒƒ Even LBAs who pay the annual licensing fees are sus- LPMC publishes two quality standards for cocoa, Grade 1 pect due to LPMC’s weak enforcement capabilities. and Grade 2, neither of which are realistically adhered to ƒƒ The pull factor for young graduates to become LBAs or controlled. Buying agents pay one price for cocoa irre- is weak due to perceptions of a difficult work environ- spective of quality, as there is an overall lack of knowledge ment, and possibly weak compensation levels among across the value chain of how to grade the quality levels.32 potential candidates. There is a need to make this criti- cal role an attractive career proposition for graduates. There is an urgent need to remove these artificial grades because they are preventing potential cocoa exporters Lower margins to farmers are a cumulative from realistically developing export competitiveness lev- result of a variety of factors els. In the context of an already weak monitoring frame- work, artificial subsidization of the grading standards Weak organization in the sector inhibits the benefits to be is causing regression in the value chain. There is wide- gained through group negotiations. The poor road infra- spread consensus that the Liberian standards issued for structure, combined with costly transportation options, cocoa should be brought in line with the prevailing inter- hampers access to import and export markets. Producers national grading standards. have to depend on the transportation owned / arranged by buyers, who treat transportation costs as variable costs. As a consequence, farmers receive lower farm- There is a need to restructure the role of LPMC gate prices. from a marketing to a regulatory one ( LACRA ) Also, the recommended cocoa farm-gate prices issued There is widespread consensus on the need to restructure by LPMC on a quarterly basis are not adhered to by either LPMC’s mandate from its current role of buying, process- farmers or the collection agents. In the case of the former, ing and exporting cocoa to more of a regulatory role. The the lack of awareness of these price lists is the main fac- transition of LPMC to LACRA needs to be speeded up. tor, while the latter group ignores the list to a large extent. LPMC’s mandate and capacities have both been under the microscope since the end of the conflict, during which the LPMC physical and human capital infrastructure was There is a need to fast track ICCO membership near completely destroyed. With the recognized need for a national regulatory agency for cocoa, and also consid- There is an urgent need to fast-track Liberia’s ICCO mem- ering the weak service delivery of LPMC in its current role, bership given that Liberian beans garner an automatic there is widespread consensus that LPMC’s role should discount of £ 100 per ton on the international market as a transition to that of a regulatory body. result of Liberia’s non-membership. By some estimates Liberian producers and exporters have lost up to US $ 2 As LPMC transitions from a marketing role to a regula- million in previous years as a result of this discount. tory role ( LACRA ) involving multiple commodities, it will be important to ensure that its monitoring and enforce- ment capabilities increase as well. This includes trained 32. Dand, R.J. ( 2008 ). Liberia – the Export Value Chain. p. 19. International Trade Centre. COMPETITIVENESS CONSTRAINTS 35 officers and other human capital requirements that will be Access to finance is challenging for smallholder addressed through the strategy. farmers The existing network of commercial banks is limited to the Infrastructure in the form of road networks Monrovia region, which leaves out smallholders in the rest inhibits operations and results in delays of the country. Banks are also unwilling to accept land in and increased costs to operators rural areas as collateral due to liability issues in case there is a need for foreclosure of defaulting accounts. Even in Infrastructure remains one of the biggest challenges that Monrovia, access is also restricted for smaller players who the industrial and agricultural sectors face in Liberia. From are often unable to meet minimum collateral requirements a purely logistical standpoint, the state of roads in Liberia or demonstrate creditworthiness. Commercial banks are is quite poor, and the situation becomes worse in the rainy also hesitant to issue loans spanning 10-15 years, which season. The existing networks neglect smallholders who is the typical amount requested by agricultural operators. are still disconnected by the road networks. The damaged roads also cause high post-harvest losses and have an The financial requirements to enter the cocoa trade busi- adverse effect on the quality of the beans during trans- ness have proved inhibitive for small scale Liberian co- portation, in turn generating a diminished added value. coa traders. Throughout the agriculture sector, there is a paucity of credit instruments for micro, small and medium Additionally, the cost of transport from centres of produc- enterprise actors. The shortage of such products in the tion / processing hubs to the port is significant for many formal market has made producers dependent on private parts of the country. There is currently only one main road actors who might be willing to advance cash at any stage connecting the main cocoa growing counties to the port of the production cycle as a means to secure funds for in Monrovia. This road is most suitable for container traf- operational management. fic from Gbarnga ( the capital city of Bong county ), while transport from Lofa and Nimba ( the other main cocoa Depending on the type of lender approached, the costs producing counties ) is much more difficult.33 of borrowing vary. Microfinance institutions, who are ac- tive in rural areas, are able to lend at lower standardized rates, while other private party lenders can be exploita- Irregular electricity supply inhibits processing tive, providing loans at exorbitant rates. Most farmers rely operations on ad hoc financial mechanisms provided by marketing agents ( merchants ). The lack of a reliable energy infrastructure directly affects the level of secondary processing that takes place in the Access to credit is not just a supply-side issue. Enterprises country. For the cocoa sector the main energy need lies seeking credit in the cocoa sector are unable to demon- in rural processing and warehousing hubs, exactly the strate adequate levels of creditworthiness due to reasons locations where the supply is weak. Therefore, extending both within and outside their control. Small scale export- the national electricity grid to rural areas is vital. ers are unable to secure firm orders from clients that they can present to banks. Additionally, the historic distrust of the banking system has prevented the majority of rural Liberians from opening a bank account, which further prevents lending officers from gauging the risk levels as- 33. Ibid. p. 12. sociated with the loan application. Box 10 : The border-out gear (market entry issues) • High competition levels from neighbouring countries. • Leakage of value in the form of informal sales is widely prevalent. • There is a need to improve marketing levels. • Lack of access to trade information in the sector. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

36 COCOA EXPORT STRATEGY 2014-2018 High competition levels from neighbouring available markets, as well as transactions driven by rea- countries sons of sustenance ( in turn driven by pervasive high pov- erty levels ). Other countries in the region are already world leaders in cocoa production and have ambitious expansion plans and plans for significantly increasing value added activ- There is a need to improve marketing levels ity. It is relatively simpler for established players like Côte d’Ivoire and Ghana to add capacity to service additional Market entry in markets such as chocolates / confection- demand. Both these countries have established brand dif- aries or cosmetics ( where there is use of cocoa butter ), ferentiators, the former known globally for supply consist- which are heavily marketed and brand driven, is skewed ency and the latter with a growing reputation for quality. in favour of countries / companies that have substantial Additionally, emerging entrants like India, which have the depth in terms of marketing management and communi- capacity to self-finance mega projects, also plan to ramp up cations planning and execution. In Liberia, marketing is production and processing significantly in the near future. at a minimum due to the bulk sale nature of raw cocoa. As the abilities in the sector to produce higher value add- Leakage of value in the form of informal sales ed goods increases over time, marketing will play an im- portant role in promoting Liberian cocoa in target markets. It is estimated that over half of the cocoa produced in This is made especially relevant by Liberia’s geographical Liberia annually is shipped to international markets location in West Africa where competitors already have through informal networks in neighbouring countries. This established reputations and brand differentiators. represents leakage in the value chain since the price of cocoa sold through informal networks is much less than if it was sold through formal mechanisms via ports to in- Lack of access to trade information in the sector ternational buyers. There is a comprehensive lack of trade information within One of the key root causes for this leakage is the weak the Liberian cocoa exporting base. Smallholder produc- logistical infrastructure in the country. Roads, transport ers typically sell on an individual basis, mostly via LBAs or networks, availability of transport and cumbersome trade to the local markets. Along with the logistical and financial facilitation processes have contributed to the increased challenges that prevent them from expanding the scope preference of producers to export through informal net- to international markets, another is that they lack reliable works. Other reasons include the proximity to readily and timely trade information. Box 11 : The development gear (development issues) • Relatively low involvement levels of women in the cocoa value chain. Relatively low involvement levels of women in the cocoa value chain When compared to other crop sectors, women are rela- crop production ( rice, plantains and cassava ) or other tively less involved in the cocoa value chain. This is partly smaller income-generating activities such as petty trad- attributable to the prevailing focus on tending food crops ing or micro-scale poultry farming. rather than cash crops like cocoa. In the cocoa belt women, owing to persistent poverty and food insecurity, tend not involve themselves in cash crop production, preferring instead sporadic employment, food COMPETITIVENESS CONSTRAINTS 37 Box 12 : Factors influencing growth / decline of cocoa production over the last decade The last ten years have witnessed an increasing geographical concentration in cocoa growing, with the African region firmly established as the top supplier. The increase in demand was met by expansion in production, mainly in the major West African cocoa producing countries. The excellent regional weather conditions of the last season were a one-off, with the current year being more typical of the usual trend. However, a global output of nearly four million tons is still expected for the current cocoa year. The sustained increase in production of over one million tons during the review period ( 2002 / 2003 to 2010 / 2011 ) was assisted by a number of factors, including officially sponsored programmes such as that in Ghana where enhanced farming techniques and better disease control, aided by excellent weather conditions, pushed production to in excess of the million tons mark in 2010/2011, representing an all-time record high. However, in Indonesia, although a massive replanting and rehabilitation programme to replace ageing trees and to boost production got underway, growth was hampered as a result of adverse weather conditions and the spread of pests and diseases. In the Latin American region, the establishment of new farms with higher yields, in particular the planting of the CCN- 51 cocoa tree variety in Ecuador, helped to boost production. By contrast the lack of investment combined with low use of fertilizers, pesticides and fungicides in cocoa farming has negatively affected cocoa output in some countries. Cocoa pests and diseases are a major constraint to sustainable cocoa production as they account for about 40 % of annual global losses of cocoa production. With faster communications and travel, trade links and the relatively free movement of people and commodities all over the world, the risk of major cocoa pests and pathogens spreading from one region to another, or even from one continent to another, is very real. Over the past decade weather-related conditions, namely El Niño and La Niña, have also had a significant effect on countries such as Indonesia, Papua New Guinea, Ecuador and Peru, with El Niño events reducing global cocoa output by 2.4 % according to a study conducted by ICCO ( cf. document EX / 142 / 7 ), whereas West African countries have suffered from the dry harmattan weather conditions. Regional and country production has, in addition, been influenced by economic variables such as farm-gate prices and the price of other crops competing with cocoa in terms of land availability. Source : International Cocoa Organization ( 2012 ). The World Cocoa Economy, Past and Present, p. 14. Available from : http ://www.icco.org/about-us/international-cocoa-agreements/cat_view/30-related-documents/45-statistics-other-statistics.html. Source: jbdodane WHERE WE WANT TO GO 39 WHERE WE WANT TO GO The following vision has been developed towards the goal of increasing the export competitiveness in the Liberian cocoa sector : “ To become an agent of transformation in the cocoa sector, driving large scale sustainable job creation and augmenting ” access to economic empowerment opportunities for small entrepreneurs through increased exports. The vision statement for the sector was developed as a result of in-depth consultations with a wide range of MARKET AND STRATEGIC stakeholders representing the Government of Liberia, in- OPTIONS ternational buyers, exporters, smallholder representatives and providers of other critical support services. This vi- As indicated in the introduction, the envisioned future sion reflects the comprehensive scope of the strategy and state of the sector has been developed using a combi- its strategic intent to transform the sector such that it will nation of consultations, surveys and analyses. This future be an engine of inclusive growth, a vehicle for greater re- state consists of two components : gional integration, and a promoter of the Made in Liberia brand in markets. ƒƒ Structural changes to the value chain that result in ei- ther strengthening of linkages or introduction of new The scope for improvements in the cocoa sector is im- structural linkages ; and mense and extends along the value chain. In some cases ƒƒ A market-related component involving identification it involves strengthening existing linkages, while in other of key markets in the short and medium to long terms areas structural modifications to the sector are required. for exporters. Both these types of improvements must lead to market penetration (increasing exports in existing markets), prod- The market identification was based on a combination of uct development ( increasing exports of new products in trade analysis conducted by ITC for identifying potential existing markets ), market development ( increasing ex- target markets and consultations with sector enterprises. ports of existing products in new markets ), and full di- Both short-term and medium-to-long-term target market versification ( increasing exports of new products in new options are assessed. markets ). The projected structural changes to the sector are based This envisaged future state of the cocoa sector is dis- on efficiency gains identified through the four gear analy- cussed in greater detail below. sis of the sector’s performance, and through the identifi- cation of opportunities for improving the sector’s capacity to acquire, add, create, retain and distribute value. The proposed future state is presented in Figure 14 be- low through a future value chain, which captures both the selected key market and strategic options. 40 Figure 14 : Future value chain 5 6 9 8 Inputs Productions Transformation and processing Distribution Export markets 1 7 Bagging Liberian Cross-border trader Abandoned farms Just in time harvesting - (hand Cosmetics Labour Drying/Fermentation (partially dried beans/ Via. Ganta (Guinea)/Foya End consumer: (25-35 years old) picking) Manufacturer mouldy/semi-fermented (Sierra Leona)/Harper Grinder in West Còte d’Ivoire, Gunea, beans) Cote d’Ivore) Trader/agent African market-local ans Sierra Leona / Local implements or TNC low end confectionary Rest of Africa Individual smallholders marker Organic Individual smallholders fertilizers Individual smallholders

2 Futher Export of raw cocoa to other Village level African markets Scales buyer 12

3 Individulual Manual smallholder farm Harvesting, Household buyer THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY Machinery Agent for Buyer in transfer to (conventional/lower end): Cocoa beans Smallholders buyer Buyer in main Manufacturing - drying yard buying center/ EU 27/Japan/emerging (collecting buying center Nursery Management, planting, and FBOs LBAs chocolate Labour (conventional) agents) markets in Asia International Buyer graded and Individual smallholders International Fuel Farm Based Drying Sorting Bagging via. Local representative Final processing/ Diatributors/ Labelling bagged in Grinder: Manufacturing - packaging (box/ weeding Organization (FBO)/ Fermentation pureplay / Retailers/cateners/

4 Semi- proper cosmetics Cooperative FBOs Liberia exporter bags) boutiques Seeds and merchanized packaging inhouse Household buyer (premium based in Monrovia saplings Harvesting, Segment): Post-war set up with pruning, maintenance EU 27/Japan/emerging programme support transfer to Large scale commercial plantations OR Packaging markets in Asia drying yard FBOs Manufacturing - material misc products Pesticides IMPORTED + PROCURED DOMESTICALLY Large scale commercial 5 Fertilizers plantation Liberian Grinding/Processing Packaging exporters International Component of Value Chain Liberian grinders/Manufacturers Primary Supporting Services COCOA EXPORT STRATEGY 2014-2018 Maintenance providers Pest and Disease Control Maintenance providers Customs- natl, or intl. Warehousing and storage Packaging suppliers Input providers 11 Transport services Inputs financing / Export financing Trade information providers

13 Research and development TVET providers

10 Quality control and certification 14 ICCO Support 15 CDA + cooperatives Source: Sector Consultations. WHERE WE WANT TO GO 41 STRUCTURAL ADJUSTMENTS –– Develop an efficient supply chain of imported scales (from regional suppliers in Ghana and Côte d’Ivoire). TO THE VALUE CHAIN To make the scales affordable to producers, the costs can be partially offset by donors. 1. Speed up efforts to rehabilitate cocoa farms aban- –– Leverage cooperatives to pool resources and house doned during the civil war, and organize farm op- scales at co-op premises. erations better. –– Educate cooperatives and community-based or- In order to get annual production volumes up there ganizations on the proper use of scales so as to is significant work required in terms of upgrading and increase adoption rates. Additionally, LBAs would rehabilitating the mass of cocoa farms that were aban- also be trained on using the scales and adopting doned during the war. The cocoa is handpicked and them as part of their mandatory workflow. traded across the border largely through informal net- –– Simultaneously with 1, 2, and 3, develop local exper- works. The strategic PoA will provide impetus to reha- tise on scale development. This could be achieved bilitation efforts ongoing in the sector with the support in the form of a joint venture with an international of NGOs and national actors. scale manufacturer, or in the form of a pilot donor initiative aimed at developing the scale manufactur- 2. Improved land management practices – aligned ing ability of local manufacturers. with Global GAP and Good Management Practices (GMP) standards – especially at the smallholder and 4. High quality saplings / seedlings used through col- cooperative level. laboration with research institutes in Côte d’Ivoire, –– There is a serious need for improved sorting at the Ghana and the United Kingdom, among other farm-gate level by producers and producer groups. countries. Improved sorting of Grade A and lower grades at Previous ITC analysis related to the cocoa sector the farm level is a best practice that will result in has indicated potential for collaboration between the significant gains. This will be addressed through University of Reading in the United Kingdom – a lead- trainings conducted at the smallholder and the co- ing cocoa research institution, and the only temper- operative level. ate zone quarantine station in the world. Additionally, –– Interventions will be designed to sensitize produc- recent collaboration between research institutes in ers and producer associations to the processes and Liberia with research institutes in Côte d’Ivoire and best practices involved in cocoa cultivation and col- Ghana has resulted in improved varieties of sap- lateralization of their assets to be able to enter into lings / seedlings being available in Liberia. This collab- commercial deals involving investors, banks and oration will be strengthened. Improvements over the other implementing partners. long term will also cover increased capability of local –– Radio programmes are one of the two main modes of research institutes and suppliers to provide saplings. information dissemination in Liberia, the other being newspapers. As a means of effective dissemination 5. Increased levels of mechanization within the pro- of best practices, support to existing and new initia- duction / ‘transformation and processing’ portions tives based on radio programmes / broadcasts will in the value chain, leading to increased capabili- be provided and recommended in the morning and ties of sector stakeholders in transformation and evening, which are the main downtimes for farmers. processing. Since 2002 cocoa processing has generally fol- 3. Increase availability of inputs by development of a lowed an upward trend, growing at an average of 2.9% locally manufactured supply chain of inputs, as well per annum. In this context, a trend of increased grind- as improving access to imported inputs. ing at origin has gathered shape. Between 2002 / 2003 As discussed in the four gears section, the lack of and 2011 / 2012, the share of Europe and the Americas availability of scales at the farm-gate level has led to in cocoa processing activities fell from 43% to 26% re- cocoa beans typically measured by volume 34 rather spectively to 40 % and 21 % respectively. The share of than by weight, which is the best practice. This cre- processing under African and Asian regions increased ates variance of expected and actual weights across from 14 % and 16 % in 2002 / 2003 to 18 % and 20 % re- the value chain, and also creates price discrepancies spectively in 2011 / 2012. Côte d’Ivoire is currently the given that prices quoted are in dollars / kg. In this re- third largest global cocoa processor, while Malaysia gard, an initiative aimed at increasing the availability is the fifth largest ( and the first in Asia ). Other major and adoption of scales will be launched and will com- cocoa producing countries such as Brazil, Ghana and prise the following components : Indonesia also have emerged as important process- ing countries. 34. Usually a bucket or a polypropylene woven bag – known locally as a ‘balawala’ bag. Source : Dand, R.J. ( 2008 ). Liberia – the Export Value Chain. p. 19. International Trade Centre. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

42 COCOA EXPORT STRATEGY 2014-2018 In Liberia, development of local grinding capacity is an marketing / trade promotion activities is either very thin important requirement within the sector that will help or non-existent. sector stakeholders reach the next level of value ad- dition. As capacity of Liberian producers to develop 9. Develop centralized warehousing infrastructure in grade 1 cocoa is improved over time, development Gbarnga. of a parallel processing capability for Grades 2 and 3 As a long-term initiative, centralized warehousing will help retain value at multiple levels. This is by far infrastructure in Gbarnga ( in the centre of the coun- a medium-long term goal given that the processing try ) will be developed to serve both the processing capability of Liberian cocoa operators is currently vir- infrastructure in the country and ports. Processing in- tually non-existent. Also, regional technology trans- frastructure is currently virtually non-existent in Liberia fer / networking initiatives between Liberia and other but it is expected that it will grow in line with other ca- West African countries will be strengthened. pabilities. The centralized location of Gbarnga has been deemed viable for servicing future processing 6. Better trained LBAs engaging in best practices and infrastructure, and also to act as a collection point for ensuring they are maintained at the farm-gate level. transport to the port. LBAs are in a strong position to effect proper qual- Currently there is a working supply route for con- ity management at the farm-gate level by adhering tainers to reach Gbarnga where rubber is suitably to proper grading / selection of cocoa beans and fair processed and then shipped to the port. This helps negotiations with producers based on the prevail- to avoid unnecessary costs at the port itself, and is ing / recommended market rate and quality of the co- therefore efficient from a perspective of cost as well coa beans. This has thus far not been the case – LBAs as time, especially given that the port infrastructure have been quite lax in terms of assessing the qual- itself is weak. There is merit in replicating this for the ity / fair price of the beans. Much of this is based on cocoa sector given that Gbarnga is ideally located in lack of awareness as well as lack of training, both of the heart of the cocoa production area. which the strategy aims to address. 10. Quality management (control and certification) pro- 7. Increased support to women cross-border trad- viders capable of providing certification services ers (and other female groups / actors active in the of a significant scale. sector) in mentoring, improved negotiation skills, Support initiatives in terms of quality management technical support, and access to efficient grievance will include : mechanisms. –– Enhancement NSL capabilities and certification by ISO; Significant potential currently lies unrealized in terms –– Development of a network of NSL subsidiaries in of the role that women can play in the cocoa sector the country, or development of a network of private / value chain. In other crop sectors women are already public metrology / calibration / testing labs that are heavily involved all stages, ranging from post-har- internationally accredited and capable of certify- vest to business development to distribution ( albeit ing Liberian cocoa and production / processing through informal distribution channels ). This can be facilities. leveraged to involve women in multiple roles within the cocoa sector value chain. 11. Improvement in availability and service delivery An increased role of women (especially the younger of transport services. generation ) will be encouraged to allow them to take Support will be provided to the various organized up non-traditional roles in the cocoa value chain such groups that are involved in providing transportation as in quality management, semi-skilled / skilled jobs services to the cocoa sector. These include the mo- in cocoa processing, cocoa intermediation and other torcycle union and the truckers union. Support initia- administrative occupations. tives will focus on streamlining agro-logistics process flows, and other initiatives based on identified needs 8. In-market support / national promotion branding. and requirements. In order to enhance export Liberia’s export perfor- mance in key target markets, the sector will have to 12. Ability to penetrate new markets due to product receive in-market support from specific institutions diversification (including certification) and improve- and initiatives of national promotion and branding. ments in supply / consistency levels. The trade support offices in Washington and the mis- Demand for certified varieties of cocoa is expect- sions in key EU capitals such as London, Brussels, ed to rise significantly in international markets in the Berlin and other capitals such as Beijing are best future. This offers a compelling business case for placed to carry out these targeted support interven- adopting best practices such as Global GAP as well tions. Currently, however, support has been large- as other sustainable land management practices. ly limited to the trade support hub in Philadelphia The use of chemical inputs such as fertilizers and and to investment promotion. Capacity to carry out pesticides is negligible in the cocoa sector and currently WHERE WE WANT TO GO 43 the tree crops are considered de facto organic as a result of non-use of agro-chemicals. Traditionally, cocoa production in Liberia has used organic rath- er than non-organic fertilizers, which bodes well for developing organic certified cocoa and cocoa prod- ucts in Liberia. This is relevant in the context of rising global demand for organic cocoa products. Many in- ternational buyers, such as Mars ( currently active in Liberia ) have made commitments in terms of sourc- ing of sustainable cocoa. Mars has made a commit- ment for sourcing 100 % of cocoa supply sustainably by 2020. For the Liberian cocoa export value chain, this is an opportunity that is non-optional. this commit- ment aligns with how cocoa is already being produced in Liberia and thus the opportunity is within easy reach and must be seized. Additionally, in the high volume American and European markets there is a significant consumer shift towards certified cocoa products. To align with this shift, several major brands of chocolate manufacturers have made public commitments to increase their pro- portion of cocoa purchases to certified cocoa. For a Source: © ACDI / VOCA 2011. relatively new and unsophisticated entrant like Liberia, this is a realizable opportunity that must be seized. Certification is a relatively long process that takes discounts of Liberian cocoa in the international mar- between three and five years to complete and also ket of up to £ 100 per ton. Upon admittance, Liberia involves certain costs. This is a medium-to-long-term would transition from a Category E to a Category D approach that will exhibit benefits towards the end ICCO country. While the process involving filing of pa- of the period. It is therefore all the more important to perwork and dues is ongoing, there is an urgent need initiate the certification process as soon as possible. to fast-track it. It is strongly recommended that Liberia joins ICCO, 13. Regional technology transfer / networking initiatives as have neighbouring Sierra Leone and Côte d’Ivoire. between Liberia and other West African countries. Liberia could derive immediate benefits from tech- Technology transfer initiatives within the West Africa nology transfer and shared experience through more region can help offset the technology gap that con- regular and intensive communications with neighbour- tinues to restrict the Liberian cocoa sector in terms ing cocoa producers. The country could also benefit of processing capabilities and increases in produc- from participating in an organization that embraces tion yields. The recently concluded Memorandum of consumer countries which are able to provide financial Understanding ( MoU ) between Ghana and Liberia, support for activities in the cocoa sector. through which the countries will exchange knowhow and skills in cocoa and rubber, is a good example. 15. Increased support to CDA and cooperatives. Increased cooperation with the private sector and Support to cooperatives in the cocoa sector will be research institutions in Côte d’Ivoire also offers high expanded on a priority basis with the following focus potential for development. Similarly, increased col- areas in mind : laboration with cocoa sector value chain actors in –– Financial, technical and human capital support to Indonesia will be promoted. CDA, which is the main cooperative development / Technology transfer initiatives will also be facilitated certification agency in the country ; through volunteer programmes involving experienced –– Direct organizational support to cooperatives in col- professionals with regional and international expertise. laboration with CDA. Such efforts – led and managed by leading interna- tional NGOs such as ACDI / VOCA and TechnoServe – Interventions will be aimed at selected cooperatives have proven to be successes in other African contexts to enhance their ability to: identify their own constraints and could be implemented or strengthened ( in the dynamically in response to changes in the world com- case of existing initiatives ) in Liberia with relative ease. modities environment; demand specific services from government and other support institutions that will di- 14. Joining ICCO. rectly affect their bottom and top lines ; and find ways As discussed in the four gears section, the de- to make them fee-based or otherwise subsidized to lay in re-admittance of Liberia to ICCO is leading to ensure sustainability. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

44 COCOA EXPORT STRATEGY 2014-2018 Table 5 : Short-term target markets Liberian cocoa Annual growth Proposed distribution Target imports exports to of sector imports Product channel / market market market 2012 (  % ) ( all suppliers ) segment ( US $ thousands ) 2008–2012 Netherlands HS 1801 – Cocoa beans, whole or International firms*** / 13 212 7 broken, raw or roasted grinders and processors Spain HS 1801 – Cocoa beans, whole or International firms*** / 4 178 1 broken, raw or roasted grinders and processors India HS 1801 – Cocoa beans, whole or International firms*** 3 496** 42 broken, raw or roasted + Indian diaspora exporters / grinders and processors Germany HS 1801 – Cocoa beans, whole or International firms*** / 3 240 6 broken, raw or roasted grinders and processors Malaysia HS 1801 – Cocoa beans, whole or International firms*** / 2 803 -3 broken, raw or roasted grinders and processors Belgium HS 1801 – Cocoa beans, whole or International firms*** / 144 10 broken, raw or roasted grinders and processors France HS 1801 – Cocoa beans, whole or International firms*** / 14 -2 broken, raw or roasted grinders and processors Source : ITC calculations based on Comtrade data. Growth rate based on International Monetary Fund estimates. *2008–2012 ** 2011 figures *** International firms based in Liberia MARKET IDENTIFICATION EU MARKETS The following analysis is divided into two broad phases : The EU markets are characterized by grinding and pro- one related to the immediate, short-term perspective and cessing processes, and all cocoa is imported. As indi- the other related to the medium-to-long-term outlook, by cated in table 5 above, demand for cocoa beans in most which time it is expected that a significant portion of the of the EU markets is increasing. The long-standing re- NES and the cocoa sector PoAs will have been imple- lationship of Liberian cocoa with EU markets, especial- mented. This phased approach is aimed at staging inter- ly the Netherlands, Spain and Germany, will be further ventions in alignment with the evolving capacities of the strengthened. sector’s trade support institutions and sector enterprises as the NES implementation moves forward. NETHERLANDS Note : The products listed under the short-term section will also hold export potential in the me- Liberia is in the advantageous position of already being a dium to long term, unless specifically mentioned. supplier to the Netherlands, which is the world’s biggest importer / trader of cocoa. Recent consumption trends in the Dutch market have reflected a healthy annual growth SHORT-TERM PHASE ( 0-5 YEARS ) rate of 7 % and, with the presence of major cocoa proces- sors such as ADM in the country, it is expected that this In the short to medium term, existing trade relationships growth rate will continue on an upwards trajectory at least and bilateral geographical distances will form the major for the next decade. criteria determining the markets for Liberian cocoa prod- ucts. Market penetration in existing markets will be the main mode of market entry. In this regard, the strategy will be consolidating rather than visionary in nature. WHERE WE WANT TO GO 45 GERMANY BELGIUM Germany is the second largest grinder of cocoa in the EU More than 99 % of Belgian imports of cocoa are sourced and commands a market share of 29 %.35 Between 2008 from developing countries, primarily Côte d’Ivoire ( 34 % ), and 2012 imports grew at an annual rate of 6 %. Cocoa Ghana ( 25 % ), Nigeria ( 11 % ), and Togo ( 9.2 % ).39 As in the sourced from developing countries constitutes 57 % of case of Netherlands, it hosts some of the biggest proces- German cocoa imports, with Côte d’Ivoire ( 18 % ), Togo sors of cocoa such as Cargill and ADM. Import growth (12%), Nigeria (7.9%), Ecuador (4.4% ) and Ghana (4.3%) rates of 10 % indicate that the cocoa market is growing the main suppliers.36 ( as a result of increased processing, re-exports and do- mestic consumption ). The port of Antwerp is one of the German cocoa demand is driven by a large chocolate major cocoa hubs and therefore an important entry point market ( the largest EU market for chocolate confection- to Belgium and the rest of Europe. ary ), close linkages with the Netherlands cocoa industry and the presence of the port of Hamburg as an entry A hallmark of Belgian chocolate is its sophistication in point to Europe and a hub for grinders and processors. terms of taste and quality, and Belgian chocolatiers gen- Germany is one of the top 10 importers of Liberian cocoa erally exhibit a high degree of willingness to innovate and there is significant potential to strengthen existing and experiment – including through new ingredients and trade relationships. sourcing opportunities. In the context of the latter, there is potential for Liberian cocoa to gain a stronger foothold in the market. SPAIN The demand for cocoa in Spain stems primarily from the FRANCE domestic market, and the country constitutes a medium- sized market ( amounting to 5.6 % 37 of the EU market ). France is the third largest cocoa grinder in the EU, ac- Demand has decreased somewhat in recent years and counting for 8.4 % of the total bean imports in the EU and amounted to 1 % annual growth between 2008 and 2012 11 % of all EU grindings. Developing countries accounted ( as indicated in table 5 ). As in the case of Netherlands, for 68 % of France’s cocoa bean imports, with the main the Spanish processors market is quite concentrated suppliers being Ghana ( 33 % ), Côte d’Ivoire ( 25 % ) and – Nestlé, Nutrexpa, Milka, Kraft Foods and Lacasa alone Nigeria (5.6%). Liberia’s cocoa exports to France are quite cover 60 %38 of the market. limited, with only US $ 14,000 exported in 2012. However, there is still potential to develop export relationships given According to a report by the Ministry of Foreign Affairs that France has the EU’s largest confectionary sector and of the Netherlands, 89 % ( of Spain’s cocoa imports ) was is one of the leading grinders and processors as well. directly sourced in developing countries. Leading sup- pliers were Côte d’Ivoire ( 22 % ), Ghana ( 17 % ), Nigeria ( 16 % ) and Cameroon ( 11 % ). Imports from Côte d’Ivoire INDIA declined, while imports from the other countries expe- rienced growth between 2006 and 2010. Fast-growing Indian cocoa imports grew at an annual rate of 42 % be- suppliers were Uganda, the Dominican Republic and the tween 2008 and 2012. While available bilateral data is United Republic of Tanzania, which are yet to conquer a sparse for recent years, it was reported that India import- significant share of the Spanish market. ed US $ 3.4 million from Liberia in 2011. Considering the widespread entrepreneurial activity of the Indian diaspora Liberia’s cocoa exports to Spain have been steadily grow- ( or people of Indian origin ) in Liberia, there is significant ing and Spain is currently the second largest market for scope of leveraging this connection to increase Liberian Liberian cocoa. Exports have grown from US $ 2.4 mil- cocoa exports to India. lion in 2010 to US $ 4.2 million in 2012. There is potential to capitalize on this trend and expand Liberian exports. MALAYSIA Along with Indonesia, Malaysia has become one of the 35. Ministry of Foreign Affairs of the Netherlands ( 2013 ). Cocoa Beans leading producers of cocoa beans as well as a processor. in Germany. Available from www.cbi.eu/system/files/marketintel/2011_ The cocoa grinding industry in Malaysia started in 1973 Cocoa_beans_in_Germany.pdf. and expanded rapidly in the 1980s. Both Côte d’Ivoire and 36. Ibid. 37. Ministry of Foreign Affairs of the Netherlands ( 2013 ). Cocoa Beans in Spain. Available from www.cbi.eu/system/files/marketintel/2011_ 39. Ministry of Foreign Affairs of the Netherlands ( 2013 ). Cocoa Beans Cocoa_beans_in_Spain.pdf. in Belgium. Available from www.cbi.eu/system/files/marketintel/2011_ 38. Ibid. Cocoa_beans_in_Belgium.pdf. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

46 COCOA EXPORT STRATEGY 2014-2018 Ghana are major suppliers to Malaysia. Côte d’Ivoire has simultaneously service the current buyers ( discussed for the advantage of being able to supply high volumes and the short term options ), while constantly monitoring op- Ghana is renowned for quality. portunities to also serve other segments, such as certified cocoa, directly. Liberian cocoa exports to Malaysia amounted to US $ 2.6 million in 2012, making Malaysia the fifth largest custom- However, an important caveat to consider is that, even er for Liberian cocoa. As Malaysia’s grinding / process- considering the best case scenario, it will take at least a ing industry expands, there is potential to capitalize and decade if not more for the Liberian cocoa sector to improve strengthen existing trade relationships. quality and supply capacities to a degree comparable to middle tier exporters. This is due to the very low supply and quality base at which the sector currently stands. MEDIUM TO LONG TERM PHASE ( 5 + YEARS ) Additionally, the sector faces stiff competition from its West African neighbours, especially Côte d’Ivoire and In the longer term, it is expected that the evolving ca- Ghana, each of whom have developed capabilities in pacities of Liberian exporters – across multiple dimen- specific niches – supply capacities in the case of Côte sions including quality management, supply capacities, d’Ivoire, and quality consistency in the case of Ghana. product diversification, time to market efficiency, and marketing / branding, in conjunction with the improving The medium-to-long-term market scope can be divided business environment and export value chain improve- into three broad scenarios : best case, average case, ments affected by the NES and sector PoA implementa- and worst case. Due to the uncertainty associated with tions – will allow exporters to target other markets in the issuing long term forecasts and the number of assump- medium to long term which seem hard to penetrate now. tions that have to be considered, the scenarios outlined It is expected that the Liberian cocoa sector will therefore in table 6 are indicative. Table 6 : Indicative scenarios for assessing long-term markets Average case Indicators Best case scenario Worst case scenario scenario Percentage of short term interventions At least 75 % Between 25 % and Less than 25 % of the cocoa strategy that have been 75 % successfully implemented. Progress of the broader national Progressing at the Progressing at an Progressing at a weak development agenda. planned / forecast rate average pace pace Fluctuations in the global cocoa market No major fluctuations Minor fluctuations Major fluctuations that can adversely impact prices and buyers. Quality and supply consistency of Liberian Improvement better Quality and supply Quality and supply cocoa. than expected consistency remains consistency has gone the same down Improvements in cocoa sector trade support Surpassed Progressed at an Progressed at a weak network infrastructure. expectations average pace pace Capability of sector firms to produce certified Significantly improved Capabilities remain Capabilities remain cocoa. capabilities the same the same The following markets and options, segmented by best / average / worst case scenarios, are identified as potential markets for the Liberian cocoa sector. WHERE WE WANT TO GO 47 Table 7 : Long-term target markets distribution channel / market Best Average Worst Target market Product segment case case case The Netherlands, Certified – organic – cocoa International firms / grinders X Germany, Belgium, ( HS 1801 ) and processors United States, Canada United States HS 1801 ( cocoa beans, whole International firms* or X X or broken, raw or roasted ), wholesalers or distributors / HS 1803 ( cocoa paste ), grinders and processors HS 1804 ( cocoa butter ), HS 1805 ( cocoa powder ) United States HS 1806 ( chocolate and other Wholesalers or distributors / X food preparations ) consumers ( primarily diaspora ) Netherlands HS 1806 ( chocolate and other Wholesalers or distributors / X X food preparations ) consumers West Africa HS 1806 ( chocolate and other Wholesalers or distributors / X X food preparations ) consumers Canada HS 1801 – cocoa beans, whole International firms / grinders X or broken, raw or roasted and processors Canada HS 1806 ( chocolate and other International firms X food preparations ) ALL markets noted X X X in short term options UNITED STATES WEST AFRICA In the medium to long term, high quality cocoa beans With the rise in processing capability, Liberian proces- (grade 1) produced in Liberia would theoretically open up sors could start manufacturing and supplying chocolate the large American market. The presence of the Liberia to West African wholesalers and distributors aimed at trade and investment office in Philadelphia provides a end consumers. The chocolate manufacturing capability strong opportunity for building export relationships given could be developed in country as a result of joint ventures that the city is the hub of many cocoa processors such with international chocolate firms. as Mars chocolate, Cargill etc. The city also acts as a dis- tribution hub for cocoa to be transported to other parts of As demand for cocoa in higher income countries shifts North America. This is especially relevant as it could be- towards certified and sustainable products, some coun- come a stepping stone for scaling up exports to not only tries have been quicker in adjusting their production to other parts of the United States, but also Canada (through exploit this new business opportunity. Box 9 shows the both land and water routes ). distribution of the production of different types of certi- fied cocoa among Latin America, Africa and Asia and Cocoa beans, paste, powder, and butter (HS 1801 – 1805) Oceania. could be supplied to grinders and processors through distribution channels including international firms based on Liberia, or through Liberian exporters to wholesalers CERTIFIED LIBERIAN COCOA TO THE EU and distributors in the United States. On a relatively mi- ( THE NETHERLANDS, GERMANY nor scale, Liberian exporters could also start exporting AND BELGIUM ) AND NORTH AMERICA chocolate to wholesalers and distributors aimed at end ( THE UNITED STATES AND CANADA ) consumers, which would include the large Liberian dias- pora in the United States. The global cocoa and chocolate industry is fast mov- ing towards certification, and markets such as Germany, Belgium, France, the United Kingdom and the United CANADA States pay high premiums for certified cocoa : As discussed above, the Canadian market could become ƒƒ Germany is the largest consumer of organic produce in more accessible for Liberian cocoa once exports to the the EU and among the top four consumers of organic United States market have scaled up. chocolate within the EU ; THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

48 COCOA EXPORT STRATEGY 2014-2018 Source: jbdodane ƒƒ The Netherlands is also a significant consumer of certi- As certification levels in neighbouring competitors such fied cocoa-based products ; as Ghana and Côte d’Ivoire are still ramping up, devel- ƒƒ The Belgian market has exhibited impressive growth oping a strong reputation as a supplier of certified cocoa trends in terms of consumption of organic and fair (be it organic, Rainforest Alliance, UTZ or fair trade ) would trade chocolate products ; allow Liberian cocoa to develop a strong differentiating ƒƒ Growing awareness and demand for certified cocoa in attribute against its regional competitors. the large United States and Canadian markets. Additionally, certification in the cocoa sector is quickly Liberian cocoa is de facto organic due to the lack of taking the shape of a necessary requirement rather than chemical fertilizers and pesticides used. It is expected a value driver. For instance, Mars chocolate ( operational that once the overall quality levels increase, marketing this in Liberia) has announced that it will only procure certified cocoa to international markets would be feasible, how- beans after 2020. As indicated in Box 9, other manufac- ever this is dependent on a high degree of value chain turers are following suit. improvements taking place. This presents an opportunity – to be realized over the me- dium-long term – for Liberian exporters to keep engaged with existing market segments and gradually start to pen- etrate the certified cocoa segment in the country. WHERE WE WANT TO GO 49 Box 13 : Trends of growth in sustainable production • As demand for cocoa in higher income countries shifts towards certified and sustainable products, some countries have been quicker in adjusting their production to exploit this new business opportunity. • The figures of sustainable production stand in stark contrast to the overall supply of conventional cocoa on the global market, of which 70 % is produced in Africa. Both Rainforest Alliance and organic cocoa have driven this trend with 76.2 % and 75.7 %, respectively, of their total supply provided by Latin America. Fair trade represents the exception to this rule, being predominantly supplied by African producers. • The trend for sourcing is likely to change, not only as the field for certified cocoa is fairly new, but also as West African producers start to certify their production. Organic cocoa is the only sustainable cocoa with sourcing ( 4.9 % ) from Asia. Figure 15 : Regional distribution of cocoa production by production system 2008-2009 Conventional Production for Export Organic (IFOAM) Rainforest Alliance Fairtrade Latin America UTZ Certified Africa Asia & Oceania Source: FLO Annual Report, 2008-2009; 0% 25% 50% 75% 100% Rainforest Alliance personal communication with Petra Tanos, 6 April 2010; ICCO, 2006; Liu, 2008; FAO, 2010; UTZ Certified Annual Report, 2009. Source of text below : Hütz-Adams, F. and Fountain, A.C. ( 2012 ). Cocoa Barometer 2012. • The following are the certification commitments of major chocolate makers : • Cadbury was the first major chocolate company to start using certified cocoa, for their Dairy Milk chocolate in 2008. • In 2009, Mars was the first major global chocolate company to commit to using 100 % certified cocoa for their entire range by 2020. They are following this up with regular public disclosure on progress. • Ferrero will source 100 % of their cocoa ‘sustainably’ by 2020, and have released a timeline, but it does not specify comprehensively what level of assurance the sustainability will be measured to. • Nestlé does not name a specific date when all their cocoa will be compliant to renowned standards, although in certain countries and on certain sub-brands they have now committed to 100 % certified sourcing, communicating future targets only at regional level. • Hershey has made a commitment to 100 % certification by 2010, although there is some doubt over the mechanisms for backing up this commitment. Source : Potts, J., van der Meer, J. and Daitchman, J. ( 2010 ). The State of Sustainability Initiatives Review 2010 : Sustainability and Transparency, p. 100. International Institute for Sustainable Development ( IISD ) and the International Institute for Environment and Development ( IIED ). THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

50 COCOA EXPORT STRATEGY 2014-2018 HOW TO GET THERE Strategic objective Operational objective The first strategic objective is • Undertake a comprehensive revitalization of the extension services division to strengthen the overall trade under MoA. support network in the sector. • Strengthen the research base in the sector. • Ensure that the sector has access to a strong base of support service providers. • Improve the capacities of cooperatives and related associations of producers to cater to the needs of the sector. • Ensure that key pending reforms in the main policymaking institutions for the sector are completed. • Improve the quality management infrastructure. • Improve access to finance for operators in the sector. The second strategic objective is • Ensure adequate access to inputs at the production phase. to improve access to infrastructure • Improve centralized infrastructure for use by sector operators. and services. The third strategic objective is to • Improve the quality and efficiency of LBAs through an overhaul of their comprehensively augment skills recruitment and training mechanisms. and influx of best practices, and • Support cooperatives and FFS in the cocoa sector to impart relevant training enable product diversification in components to their constituents. the sector. • Use a variety of media to disseminate information on best practices. • Increase the level of organization in the sector. • Enable product diversification in the sector, especially in certified cocoa. The fourth strategic objective is to • Ensure that adequate support for exporters exists, relative to key international facilitate increased access to, and markets. strengthen the ability of enterprises • Encourage involvement of diaspora networks towards investment and sector to utilize, trade information. regeneration efforts. • Develop a strong Liberian cocoa brand – especially leveraging the future potential for exporting certified cocoa. STRATEGIC OBJECTIVES coordinating, and implementing the NES. In particular, LEC will be tasked with coordinating the implementation Four strategic objectives are considered necessary for of activities in order to optimize the allocation of both re- realization of the sector vision. Accompanying each of sources and efforts across the wide spectrum of stake- the strategic objectives are operational objectives that holders. Within this framework, implementation of the will support the realization of the strategic objective and cocoa strategy also falls within the purview of LEC. the overall vision. Such efforts will involve directing donor, private, and pub- lic sector organizations towards the various NES priorities IMPORTANCE OF in order to avoid duplication and guarantee maximum impact. Responsibilities will also include monitoring the COORDINATED results of activities and outputs, while at the same time IMPLEMENTATION recommending policies that could serve to enhance re- alization of the strategic objectives. With a 360 degree The broad range of activities, together with the complex view of progress the Council will be best placed to man- nature of integrated intervention, requires careful imple- age funding and provide regular reports to donors and mentation that efficiently directs resources and monitors stakeholders. Moreover, LEC will play a key role in recom- results at both the micro and macro levels. To this end, a mending revisions and updates to the strategy so that it Liberian Export Council ( LEC ) will be established in order continues to evolve in alignment with the country’s evolv- to facilitate the public-private partnership in elaborating, ing needs. CONCLUSION 51 Source: jbdodane IMPLEMENTATION PARTNERS – LEADING AND CONCLUSION SUPPORTING INSTITUTIONS In addition to LEC, a variety of stakeholders will be critical This sector export strategy represents a major step for- to the successful implementation of this strategy. These ward in realizing the export potential offered by Liberia’s include public sector actors such as MoA ( including the cocoa sector. There is a clear need to transform Liberian extension services ), LPMC/LACRA, CSTWG, CDA, MoCI cocoa from the subsistence crop that it is currently, to a and MoFA, and also private sector / civil society organi- carefully planned, market engine of equitable growth and zations such as ACDI/VOCA that have a successful track value distribution. record in the sector and are well positioned to assist. Source: jbdodane THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY STRATEGIC PLAN OF ACTION LIBERIA 54 Strategic objective 1 : Strengthen the overall trade support network in the sector. Operational Activities Priority Entry point of Primary Target measures Leading Supporting Estimated objectives 1=low intervention beneficiaries implementing implementing costs 2=med ( immediate, partners partners ( High, 3=high medium term, Medium, long term ) Low ) 1.1 Undertake a 1.1.1 Undertake a comprehensive gap assessment of the 3 Immediate MoA – extension Gap assessment completed by MoA,LPMC CARI, CSTWG, L comprehensive extension services division in MoA in the technical, financial and services mid-2014 IITA,WCF revitalization of human capital dimensions. Based on the identified gaps, develop Strategic roadmap / action plan the extension a strategic roadmap for the development of these services. for extension services developed services division by the end of 2014 under MoA. 1.1.2 Conduct a gap analysis of the extension services required 3 Immediate Producers Needs assessment completed MoA, LPMC CARI, CSTWG, IITA, M in the main cocoa producing and processing counties, on topics by end of 2014 WCF such as the number of extension officers required and the type of services needed in the division. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY 1.1.3 Launch a recruitment campaign to hire and impart training 3 Immediate MoA – extension Initial batch of 50 to 100 MoA, LPMC CARI, CSTWG, MoCI M ( through fast-track courses ) to extension service officers on services, private extension officers trained and key aspects of GAP, GMP and other best practices related to the sector deployed by end 2014. cocoa value chain, in order to offset the significant shortage of Targets to be revised in early extension service officers ( in the short term ). 2015. 1.1.4 Establish and strengthen linkages between extension 2 Medium term CARI, MoA – Quarterly meetings starting early MoA / CARI, CSTWG L services and national research institutions such as CARI by extension services, 2014 LPMC regularizing knowledge sharing sessions and establishing a two private sector way feedback loop between identified needs in the field and research updates. 1.2 Strengthen 1.2.1 Develop infrastructure for grafting and cloning at CARI, in 2 Immediate CARI / entire value MoU signed in early 2014 CARI / University CSTWG, IITA, MoA , H COCOA EXPORT STRATEGY 2014-2018 the research collaboration with the university of reading ( United Kingdom ) : chain Site visits / modalities of of Reading LPMC, ACDI/VOCA base in the »»Transplantation of clean plant material from University of collaboration finalized by end sector. Reading ( the only temperate zone quarantine station in the 2013 world ), Active collaboration to start »»Collection and verification of cocoa planting materials mid-2014 »»Development of local capacity ( CARI ) in developing high yield varieties. 1.2.2 Set up a cocoa TVET centre as a centre of excellence 2 Medium term Entire value chain Terms of Reference for centre CARI/IITA, LPMC MoA, IITA, CSTWG H in cocoa-related vocational trades and related skills, in completed by end 2014 and other relevant close collaboration with international buyers ( grinders and Centre developed and national and manufacturers ). operational by the end of 2015 international partners 1.2.3 Develop educational instruments aimed at increasing cocoa 3 Medium term Entire value chain Working group set up, or CSTWG, LPMC MoA / MoCI / H specialization in Liberia : alternatively CSTWG expanded University of »»Inclusion of major universities within CSTWG or a separate by mid-2014 Liberia / Tubman working group to discuss TVET needs of the sector including Degree programmes set up and University / World curricula overhaul etc. ; recognized by the end of 2014 Cocoa Foundation »»Develop educational programmes ( masters and postgraduate with curricula details / instructor and other national certificate levels ) in collaboration with Liberian universities requirements identified and international as well as potential international partners in the Netherlands, educational or Ghana and Côte d’Ivoire. research institutions Strategic objective 1 : Strengthen the overall trade support network in the sector. Operational Activities Priority Entry point of Primary Target measures Leading Supporting Estimated objectives 1=low intervention beneficiaries implementing implementing costs 2=med ( immediate, partners partners ( High, 3=high medium term, Medium, long term ) Low ) 1.2 Strengthen 1.2.4 Develop a volunteer programme for regional and 2 Medium term Entire value chain First round of volunteer intake International agro- MoA, CSTWG, WCF M the research international experts to engage with the Liberian cocoa sector, with initial batch of 20 experts based NGOs such base in the and in the process transfer and increase adoption of best initiated by the end of 2014 as ACDI/VOCA, sector. practices among sector operators. TechnoServe 1.2.5 Draft MoUs for technology transfer initiatives between 2 Immediate/ Entire value chain MoU finalized by the end of 2014 MoA CARI, IITA, WCF L Liberian research Institutes, and regional ( Côte d’Ivoire, Ghana ) Ongoing and international partners ( including international cocoa firms in Liberia ). 1.3 Ensure that 1.3.1 Develop a supply base of service providers who will cater to 2 Medium term Entire national value Deliverables for a - d to be MoA, MoCI, Liberia Chamber of H the sector has the cocoa sector : chain finalized by mid-2014 Liberia Better Commerce ( LCC ), access to a 1. Establish a cocoa business services support programme ; e – Incubator programme Business Forum Liberia Business strong base of 2. Compile a cocoa business services providers directory ; launched by end 2014, first ( LBBF ) Registry, CSTWG, support service 3. Establish a cocoa business services providers association ; batch of agribusinesses inducted CDA providers. 4. Train business service providers to create business plans in early 2015 based on revenue forecasts and signed contracts so as to be able to borrow against receivables and booked orders ; 5. Establish an incubator programme for agribusinesses that will provide services related to : »»Extension services ; »»Pest management ; »»Nursery services ; and »»Seed management. 1.3.2 Support increased access to and use of light-medium level 2 Medium term Producers Equipment leasing schemes CDA, MoA MoCI, National M farm based implements : active / expanded in the major Investment Council »»Introduce ( and increase access to ) modern farm implements at cocoa producing counties ( NIC ), LPMC/LACRA, a cooperative level to enable enhancements at the production CSTWG and post-harvest stages. Specific focus will be on sorting, grading and bagging processes ; »»Develop equipment leasing options led by the private sector and supported by the government ; »»Impart training to producer groups on light / medium mechanization to ensure optimal use of farm and post-harvest equipment. 1.3.3 Establish a sorting and grading fee-based service ( run 3 Immediate Producers / Sorting and grading fee- CDA, LPMC/ MoA M by cooperatives ) that will immediately enhance the profitability cooperatives and based services set up in five LACRA of farmers / cooperatives by eliminating the losses caused by other FBOs cooperatives / FBOs on a pilot unnecessary downgrading of superior quality beans because of basis by mid-2014 mixing. 1.3.4 Promote local expertise on scale manufacturing through a 2 Long term Producers / Identify production ready firms MVTC, BWI MoA, LPMC/LACRA, M pilot donor initiative aimed at developing the scale manufacturing cooperatives and by mid-2014, after which MoCI, CDA ability of local manufacturers. other FBOs production targets will be set Production of scales to begin STRATEGIC PLAN OF ACTION post mid-2014 55 56 Strategic objective 1 : Strengthen the overall trade support network in the sector. Operational Activities Priority Entry point of Primary Target measures Leading Supporting Estimated objectives 1=low intervention beneficiaries implementing implementing costs 2=med ( immediate, partners partners ( High, 3=high medium term, Medium, long term ) Low ) 1.3 Ensure that 1.3.5 Train truckers / motorcycle union members and other 2 Immediate Truckers / Initial study ( gap analysis, needs MoT, Transport MoA, MoCI, CDA, L the sector has transport and logistics service providers on issues related to motorcycles and assessment ) Unions LPMC/LACRA access to a efficient supply chain management and leveraging opportunities other unions strong base of for integrating agro-logistics in the sector. support service providers. 1.4 Improve the 1.4.1 Develop and implement a multiyear support programme for 3 Immediate CDA Support programme developed CDA, MoA MoCI, IITA, LPMC/ H capacities of CDA based on the following components : by the end of 2014 LACRA, CSTWG cooperatives »»Financial, technical and human capital support to the CDA, THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY and related which is the main cooperative development / certification associations agency in the country ; of producers »»Establish a cocoa cooperatives and associations support unit to cater to the at the CDA ; needs of the »»Develop CDA capacity to provide advisory services to sector. cooperatives and other farmer-based organizations related to : »»Adoption of GAP, best practices ; »»Assistance with certification ( organic, UTZ, Rainforest Alliance, fair trade ). 1.4.2 Develop a programme to train the administrative staff 3 Immediate Cooperatives and Curriculum developed and CDA MoA, MoCI, LPMC M of cooperatives / FBOs in improving their technical and other FBOs programme set up by mid-2014 administrative abilities. First batch of training sessions conducted between middle and COCOA EXPORT STRATEGY 2014-2018 end of 2014 1.4.3 Develop and launch a train-the-trainers programme 3 Immediate Cooperatives and Train-the-trainers programme CDA, LPMC MoA – extension L for focal points at selected cooperatives in the main cocoa other FBOs developed and launched in mid- services, CSTWG producing counties. Main thrust of the trainings will be on 2014. production ( GAP ) and post-harvest ( GAP and GMP ) techniques. Recommend 8–12 week In addition to the trainings, case studies and guidebooks will be programme sessions with also developed and disseminated. batches of 20–30 trainers 1.5 Ensure that 1.5.1 Support the ongoing initiative to restructure LPMC to 3 Immediate LPMC/LACRA Ongoing LPMC to LACRA MoA, LPMC MoCI, CSTWG M key pending LACRA ( possibly through consulting services support to LPMC restructuring is completed by and other relevant reforms in and MoA ) : mid-2015 ministries the main »»Rationalize mandates and internal organizational structure policymaking based on the new role ; institutions for »»Establish guidelines on various aspects including standards the sector are for exporting Liberian agricultural goods ; pricing in line with completed. international trends ; and licensing of agents / exporters in cocoa and other agricultural commodities ; »»Establish a monitoring and enforcement section within LACRA when it is established ; »»Formulate, together with industrial buyers and smallholder representatives, an integrated operational response to institutional support needs of the sector ; »»Reinforce enforcement and monitoring capacities of LACRA through recruitment and training of monitoring and enforcement staff. Strategic objective 1 : Strengthen the overall trade support network in the sector. Operational Activities Priority Entry point of Primary Target measures Leading Supporting Estimated objectives 1=low intervention beneficiaries implementing implementing costs 2=med ( immediate, partners partners ( High, 3=high medium term, Medium, long term ) Low ) 1.5 Ensure that 1.5.2 Provide support for strengthening and transforming CSTWG 2 Immediate CSTWG Strategic multiyear plan for MoA, CSTWG MoCI and other M key pending into a permanent and sustainable body : CSTWG developed by the end relevant ministries reforms in »»Support to the development of the CSTWG strategic multiyear of 2014. the main plan, including resource mobilization and human capital re- Delineation of responsibilities policymaking quirements ; complete by the end of 2014. institutions for »»Strengthen the cocoa working group with broader representa- Permanent secretariat set up by the sector are tion across the value chain, including buyers and investors ; the end of 2014. completed. »»Support setting up a permanent secretariat for CSTWG ; »»Delineate a well-defined division of responsibilities within LPMC/LACRA. 1.5.3 Reduce tax paid on cocoa exports to help offset the cost of ex- 2 Medium term Producers Tax regime simplified by the end MoA, LPMC/ MoCI, ACDI/VOCA L panding production, primarily grown by individual farmers on small of 2014 LACRA plots that need upgrading after years of neglect. By improving the price that can be paid to farmers, along with current efforts to raise quality through proper processing, the measures will increase in- come at the farm level. (Originally an ACDI-VOCA suggestion.) 1.5.4 Fast-track ICCO membership for Liberia, and strengthen the 3 Immediate Entire value chain ICCO membership completed in ICCO, MoA CSTWG, MoCI, L relationship with ICCO. early 2014 LPMC/LACRA Areas of proposed collaboration / ideas deliberated upon and finalized by mid-2014 1.5.5 Review and negotiate import agreements among all Mano 2 Medium term Entire value chain Finalize / refine import MoCI, MoA, LPMC/LACRA L River Union countries to facilitate ease of seeds imports. agreements by the end of 2014 Mano River Union representatives 1.6 Improve 1.6.1 On the basis of studies already conducted by NSL in 2012, 3 Immediate NSL / entire value Go live for NSL capabilities in NSL, MoCI, MoA CARI, LPMC/LACRA M the quality develop the capacities of the NSL to test and certify cocoa based chain testing and certifying cocoa management on international standards. based on international standards infrastructure. by mid-2015 1.6.2 Expand the network of testing labs in the country through : 3 Medium term Entire value chain Network expanded based on set NSL, MoA LPMC/LACRA, H 1. Expansion of players already present in the country ; targets BIVAC/SGS, MoCI, 2. Development of local capacity and a network of testing / CSTWG calibration / metrology labs. 1.6.3 Ensure that previous directives to harmonize Liberian 1 Immediate Producers / LBAs, Harmonization is complete and LPMC/LACRA MoA, MoCI, CSTWG L quality standards and requirements based on international quality Exporters verified through audits standards are being followed. 1.7 Improve ac- 1.7.1 Develop a provision at lending institutions for extending 2 Medium term Entire value chain Tangible increase in credit CBL Financial institutions L cess to finance lines of credit based on demand notes issues by exporters. extended based on demand dealing with agro- for operators in notes. sectors the sector. 1.7.2 Extend agri-specific credit lines for facilitating greater 2 Medium term Producers New agri-credit lines reaching a CBL Financial institutions M access to inputs for producers based on existing support wider spectrum of cocoa value dealing with agro- STRATEGIC PLAN OF ACTION provided by CBL to lending institutions. Also, assess the extent chain stakeholders seeking sectors to which support is being used and whether additional financial funding resources are required. 57 58 Strategic objective 2 : Improve access to infrastructure and services. Operational Activities Priority Entry point of Primary Target measures Leading Supporting Estimated objectives 1=low intervention beneficiaries implementing implementing costs 2=med ( immediate, partners partners ( High, 3=high medium term, Medium, long term ) Low ) 2.1 Ensure 2.1.1 Develop seedling distribution supply chain originating from 2 Long term Producers Efficient supply chain set up by mid- CARI / MoA- Liberia Institute M adequate access CARI ( and private institutions developing seed gardens ) to cocoa 2015. Survey to be administered extension of Statistics and to inputs at farmers. thereafter to gauge efficacy. services, private Geo-Information the production sector based Services ( LISGIS ), phase. suppliers CDA, CSTWG 2.1.2 Increase access to packaging material – especially export 2 Medium term Producers / Efficient and ready access to packaging MoCI, MoA LISGIS, LPMC/ M quality bags – through identification of promising suppliers and LBAs material by the end of 2015. Survey to LACRA provision of financial and technical support. be administered thereafter to gauge efficacy. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY 2.1.3 Assist in the development an efficient supply chain of 2 Medium term Producers / Efficient supply chain setup by the end MoCI, regional LISGIS,, LPMC/ M imported scales ( from regional suppliers in Ghana and Côte LBAs as well of 2014 through contracted regional suppliers LACRA, MoA d’Ivoire ). To make the scales affordable to producers, the costs as downstream suppliers of scales. can be partially offset by donors. actors in the Survey to be administered thereafter to value chain gauge efficacy. 2.2 Improve 2.2.1 Speed up rehabilitation efforts on abandoned cocoa farms, 3 Immediate/ Entire value Rehabilitation completed by 2017 MoA CARI, LISGIS, H centralized specifically in terms of old stand replacement : ongoing chain MoCI, CSTWG infrastructure »»As a first step, determine the scope of rehabilitation ; for use by sector »»Develop a phased plan of initiating rehabilitation efforts ; operators. »»Contract partners to launch rehabilitation efforts. 2.2.2 Develop a pilot programme for developing processing 2 Long term Entire national Pilot processing hub set up in Nimba MoA, LPMC/ LISGIS, MoCI, H COCOA EXPORT STRATEGY 2014-2018 ability in the sector aimed at product diversification. This will be value chain and Lofa ( as well as other major cocoa LACRA CSTWG, IITA, achieved through a two pronged approach : producing counties ) by the end of 2016 ICCO »»Setting up of a pilot processing hub for grinding Grade A Incubation programme deployed and Liberian cocoa. This will be accompanied by an outreach running by the end of 2017 programme to ensure wide participation and use of pilot facilities. Nimba and Lofa are primary candidates and potential product options are black soap, coca dust and cocoa butter. »»Incubation programme at the cooperative level involving identified and already well-positioned cooperatives. Over time, the technology and expertise will flow to individual operators. 2.2.3 Refurbish Lofa ( and others ) seed bank and develop new 3 Immediate Producers Annual increase in Lofa seed bank MoA, CARI CSTWG, research M local seed banks and nurseries of the hybrid varieties now being reserve of 15 % annually between 2014 partners in Côte imported from Ghana and Cote d’Ivoire. and 2018 d’Ivoire and Ghana 2.2.4 Develop a centralized warehousing infrastructure in 2 Medium term Producers / Centralized warehouses setup in MoA, MoCI IITA, MoCI, LPMC/ M Gbarnga for storing beans, accompanied by infrastructure for processors Gbarnga by the end of 2016 LACRA, ICCO basic processing and packaging of cocoa beans. 2.2.5 Establish processing infrastructure in major cocoa 2 Long term Producers/ Establish processing plants in major MoA IITA, MoCI, LPMC, M producing counties for storing beans, accompanies by processors cocoa producing counties by the end ICCO infrastructure for basic processing and packaging of cocoa of 2016 beans 2.2.6 Create new, or upgrading existing, networks of local and 2 Medium term Producers / Significantly improved network set up LPMC/LACRA, MoCI, CDA, H regional buying stations / centres. New buying centres will be set LBAs by mid-2015 MoA CSTWG up in regions of the country where the network is weak. Strategic objective 3 : Comprehensively augment skills and the influx of best practices and enable product diversification in the sector. Operational Activities Priority Entry point of Primary Target measures Leading Supporting Estimated objectives 1=low intervention beneficiaries implementing implementing partners costs 2=med ( immediate, partners ( High, 3=high medium term, Medium, long term ) Low ) 3.1 Improve 3.1.1 Perform a comprehensive review of the salary and benefits 3 Immediate LBAs Review conducted by mid- MoA, LPMC/ MoCI, CSTWG L the quality and package offered to LBAs in a bid to incentivize and attract talent. 2014 LACRA efficiency of Support LPMC to set standards for selection and operationalization LBAs through of LBAs. an overhaul of their recruitment 3.1.2 Develop an outreach programme to attract fresh graduates to 3 Immediate LBAs Outreach / recruitment MoA, LPMC/ MoCI L and training become LBAs. programme begins in mid- LACRA mechanisms. 2014 3.1.3 Launch a recruitment campaign to attract new graduates from 3 Immediate LBAs Outreach / recruitment MoA, LPMC/ MoCI, universities and L Liberian universities. programme begins in mid- LACRA training institutes 2014 3.1.4 Overhaul curriculum and training for LBAs provided by MoA- 3 Immediate LBAs Curriculum development / MoA-extension MoCI, universities and L extension services, and LPMC/LACRA staff. overhaul completed by the end services, LPMC/ training institutes, CARI of 2014 LACRA Training loop initiated by early 2015 3.1.5 Implement strict initial and interim testing as well as 3 Immediate LBAs Regular testing loop integrated MoA, LPMC/ MoCI L certification for LBAs to ensure compliance and quality of services. in operational practices of LACRA LPMC/LACRA 3.2 Support 3.2.1 Training will be conducted focusing on the following 3 Immediate Producers / Progress gauged based on CDA, MoA- FFS, cooperatives, M cooperatives and components : LBAs initial / multidimensional extension LPMC/LACRA, MoCI, FFS in the cocoa »»Improved sorting at the farm-gate level ; targets set prior to services, BIVAC/SGS, CSTWG, sector to impart »»Improved negotiation skills based on ability to gauge cocoa bean commencement of international and relevant training grade levels, interpret international cocoa prices and recommended programme. national civil society components LPMC price list ; Bi-annual surveys actors active in the field to their »»Conservation, as well as hygienic handling methods during the administered to participants constituents. harvest and post-harvest seasons ; and recipients of programme »»Pest management ( including organic pest management ) during support pre- and post-harvest processes to avoid any inadvertent losses ; »»Hold trainings related to GMP ( strategic goal setting, and general operational management, financial management, record keeping, good labour practices ) ; »»Training producers on sustainable land use principles / techniques and incorporate curriculum within FFS interventions across the board ; »»Providing technical assistance with certification ( organic, UTZ, Rainforest Alliance, fair trade ). 3.2.2 Increase adoption rates of scales at the farm-gate level by : 3 Immediate Producers / Programme initiated in mid- LPMC/LACRA, MoA, FFS, M »»Leveraging cooperatives to pool resources and house scales at co- LBAs 2014 CDA cooperatives, MoCI op premises ; Increase in scale usage by »»Educate cooperatives and community-based organizations on the 30 % at the end of 2014 proper use of scales so as to increase adoption rates. The role of cooperatives will be especially important in this regard ; STRATEGIC PLAN OF ACTION »»Train LBAs on mandatory usage of scales and incorporate into their workflow. 59 60 Strategic objective 3 : Comprehensively augment skills and the influx of best practices and enable product diversification in the sector. Operational Activities Priority Entry point of Primary Target measures Leading Supporting Estimated objectives 1=low intervention beneficiaries implementing implementing partners costs 2=med ( immediate, partners ( High, 3=high medium term, Medium, long term ) Low ) 3.2 Support 3.2.3 Incubate logistics / transport businesses owned and operated 2 Medium term Producers / Pilot initiative launched by the MoCI, MoA, LPMC/LACRA M cooperatives and by young individuals that provide crucial feeder networks connecting LBAs, logistics end of 2014 Ministry of FFS in the cocoa the most geographically remote farms to the nearest nodes : / transport Transport sector to impart »»Identify promising candidates/groups ; businesses relevant training »»Develop programme and training curricula in collaboration with the components Ministry of Transport and other actors ; to their »»Pilot training initiative for first batch of candidates. constituents. 3.2.4 Develop a specific competencies development programme for 2 Medium term Women traders Pilot initiative for first batch of MoCI, Ministry MoA, CSTWG L women involved in cross-border trade, focusing on : trainees launched by the end of Gender THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY »»Raising awareness of their rights and recourse mechanisms in case of 2014 Development, of grievances ; »»Negotiating fair prices ; »»Improved sorting and grading practices. 3.3 Use a variety 3.3.1 Develop radio broadcast programmes to disseminate and 2 Medium term Producers Radio stations / CSTWG, CDA L of media to educate cocoa producers in best practices / extension services and Radio broadcast programming MoA-extension disseminate advice involved in cocoa cultivation and effective management of begins in early 2015 services information on specific varieties. best practices. 3.3.2 Develop an information campaign to disseminate information 3 Immediate Producers / A well-defined, scheduled MoA-extension CSTWG, CDA, MoCI L on recommended cocoa prices and other information on sector LBAs campaign by mid-2014 services / various specific rules / regulations via radio, newspapers and public service information text messages. providers COCOA EXPORT STRATEGY 2014-2018 ( newspapers, radios ) 3.4 Increase 3.4.1 Develop a pilot initiative ( developed in collaboration with 3 Medium term Cooperatives Event held quarterly, CDA MoA, MoCI, CSTWG M the level of CDA ) for a quarterly networking event that brings together cocoa and other FBOs commencing in mid-2014 organization in cooperatives and other community-based organizations and FBOs the sector. that are interested in forming cooperatives. The main goal of this initiative would be to facilitate cross-pollination of ideas and networking among cooperatives. 3.4.2 Support existing women’s groups ( such as Women in Cross- 2 Immediate Women traders Quarterly events organized in MoA, Women MoCI, CDA L Border Trade ) in their existing networking and awareness-raising three hubs in Cross-Border efforts by organizing a regular networking event in hubs close to the Trade group main border crossings with Sierra Leone, Guinea, and Côte d’Ivoire. 3.5 Enable 3.5.1 Undertake a study to identify possible product diversification 3 Long term Current / Study undertaken and CARI, MoA CSTWG, MoCI L product options for Liberian cocoa in a phased context over the mid to long aspiring released by mid-2015 diversification term, and assess the associated necessary infrastructural needs. exporters in the sector, especially in 3.5.2 Organize and hold a conference involving international 3 Long term Entire value Conference held as a pilot ITC, MoCI, MoA International firms / M certified cocoa. buyers, international grinding firms with a presence in Liberia and chain event in early 2015 buyers local stakeholders to identify the scope for product diversification. Facilitate deal-making for processed cocoa produced in Liberia. Strategic objective 3 : Comprehensively augment skills and the influx of best practices and enable product diversification in the sector. Operational Activities Priority Entry point of Primary Target measures Leading Supporting Estimated objectives 1=low intervention beneficiaries implementing implementing partners costs 2=med ( immediate, partners ( High, 3=high medium term, Medium, long term ) Low ) 3.5 Enable 3.5.3 Provision of technical assistance program for cocoa enterprises 3 Long term Entire value Audit report completed by the BIVAC, SGS and MoA, MoCI, M product related to certification : chain end of 2014 other private CSTWG, diversification »»Create an audit report of the various voluntary standards / Partnership and technical sector service LPMC/LACRA in the sector, certification options available. assistance package starts in providers especially in »»Partner with appropriate international certification body. 2015 certified cocoa. »»Co-design a comprehensive technical assistance package to accompany the sector through the certification process. 3.5.4 Develop capacity of local quality management institutions such 3 Long term NSL and NSL accredited to certify MoA, ISO CSTWG, MoCI, M as the NSL to undertake certification work. other quality cocoa-based institutions international management certification firms institutions Strategic objective 4 : Facilitate increased access to, and strengthen the ability of enterprises to utilize, trade information. Operational Activities Priority Entry point of Primary Target measures Leading Supporting Estimated objectives 1=low intervention beneficiaries implementing implementing costs 2=med ( immediate, partners partners ( High, 3=high medium term, Medium, long term ) Low ) 4.1 Ensure 4.1.1 Set up a comprehensive in-market support programme for 3 Medium term Current / aspiring Programme defined and MoFA, MoA MoCI, LBBF, CSTWG M that adequate the sector at Liberian overseas missions in the United States, exporters operational by mid-2015 support for Europe, Asia and Africa. exporters exists, 4.1.2 Leverage existing trade and investment office in 3 Immediate Current / aspiring First round of business to MoFA, MoA, CSTWG, MoCI, LCC, M relative to key Philadelphia to host international business to business meetings exporters business meetings hosted by Liberia trade and LBBF international with international clients to encourage potential international investment office by the end investment office markets. business. of 2015 in Philadelphia 4.1.3 Develop a feedback mechanism for continuously 3 Medium term Current / aspiring Feedback mechanism in place MoFA, MoA CSTWG, MoCI M monitoring demand and preferences in target markets through exporters by mid-2015 Liberian foreign service officers trained to follow demand Specific training components patterns in target markets and feed back to the relevant MoA and integrated in foreign service MoCI contacts. officers’ training curricula 4.1.4 For key markets, conduct detailed market research to 3 Medium term Current / aspiring Market research LCC, LBBF, MoA MoCI L structure market segment identification ( current, growing, and exporters commissioned and concluded emerging ) and disseminate to potential and interested exporters by the end of 2014 in the sector. 4.1.5 Develop a comprehensive information dissemination 3 Medium term Current / aspiring Campaign active by early 2015 MoA, MoFA MoCI, CSTWG L campaign aimed at regularly updating potential and current exporters exporters on the following : »»Market-specific consumer trends ; STRATEGIC PLAN OF ACTION »»In-country marketing opportunities such as trade fairs, exhibitions etc. ; »»Import / export requirements at customs / port authority etc. 61 62 Strategic objective 4 : Facilitate increased access to, and strengthen the ability of enterprises to utilize, trade information. Operational Activities Priority Entry point of Primary Target measures Leading Supporting Estimated objectives 1=low intervention beneficiaries implementing implementing costs 2=med ( immediate, partners partners ( High, 3=high medium term, Medium, long term ) Low ) 4.1 Ensure 4.1.6 Organize a business development event for delegations 2 Medium term Current / aspiring Pilot event held at the end of MoCI, MoA, LBBF, CSTWG, LPMC/ M that adequate of buyers from key target markets to interface and meet cocoa exporters 2014 MoFA, LCC LACRA support for exporters from the smallholder sector in Liberia, deal-making exporters being the key aim of the event. exists, relative to key international markets. 4.2 Encourage 4.2.1 Conduct an opportunity study against benchmarks from 2 Medium term Current / aspiring Study launched and conducted NIC MoA, MoCI, L THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY involvement successful diaspora investment programmes in other countries exporters by the end of 2014 of diaspora ( Israel, India and China ). networks towards 4.2.2 Develop a business case ( in collaboration with the LBBF 2 Long term Diaspora groups Business case developed by LCC, LBBF, CBL Diaspora groups, M investment and prominent diaspora groups ) to explore the feasibility of the end of 2014 and presented CSTWG, leading banks and sector floating a government investment bond aimed at overseas to the legislature for approval regeneration Liberians to finance specific projects in the cocoa sector. efforts. 4.2.3 Develop and launch an incentive programme aimed at 2 Medium term Indian diaspora Scope for developing such a NIC, MoA MoCI, MoFA, CSTWG, M connecting cocoa-based businesses led by the Indian diaspora businesses programme examined by mid- diaspora groups to opportunities in the Indian market. 2014. If the decision is to go ahead, incentive programme will be developed and implemented COCOA EXPORT STRATEGY 2014-2018 by early 2015 4.3 Develop a 4.3.1 Support branding and promotion efforts of Liberian 2 Medium term Current / aspiring Brand campaign launched in MoFA, MoA MoCI, CSTWG M strong Liberian cocoa through a consultancy effort to design and implement a exporters 2016 cocoa brand branding campaign for Liberian cocoa. – especially Formulate a systematic ‘sourced in Liberia’ campaign / brand leveraging the to leverage co-branding opportunities for products ( targeted to future potential end-consumers ) in premium markets. for exporting certified 4.3.2 Establish a ‘sourced in Liberia’ certification / traceability 3 Long term Entire value chain Brand campaign launched in MoFA, MoA MoCI, CSTWG L cocoa. programme for certified Liberian cocoa : 2016 »»Conclude agreement on traceability criteria and reporting mechanism ; »»Conclude agreement on conditions of use of the ‘Sourced responsibly in Liberia’ label ; »»Commission a creative agency to develop collateral around the label, including logo, tagline, communication material, style manual ; »»Roll out campaign in key markets. 4.3.3 Commission co-branding opportunity study for alternative 3 Long term Current / aspiring Brand campaign launched in MoA ICCO, World Cocoa L Business to Consumer uses for Liberian certified ( sustainably exporters 2016 Federation sourced ) cocoa. 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