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Marketing chain
In general terms, there are three main marketing systems
that have been adopted by producing countries. These are:
- Marketing boards
- Caisse de Stabilisation
- Free Market
This system has been mostly used in anglophone producing countries in Africa such as Ghana and until 1986, in Nigeria. It is characterized by the existence of a parastatal with the monopoly for internal and external crop marketing. Once the cocoa is purchased from the farmer it is the property of the marketing board and will be handled by it in all the stages of the chain. Prices are determined by the Board and are fixed for the entire crop year. Fixing the price allows producers to be less vulnerable to fluctuations in world market prices.
Although similar to the marketing board (it determines internal prices and has the ownership of the crop along the marketing chain) there is less intervention than in the above-mentioned system. The physical handling of the crop, from the farmer to the export points, is carried out by private agents authorized by the Caisse. This system used to be common in francophone producing countries in Africa, particularly Côte d'Ivoire and Cameroon. Until 1999 in Côte d'Ivoire, the stabilization system was done through the "barême". The barême was a detailed system that fixed guaranteed producer prices and export reference prices for each step in the cocoa chain. When cocoa was sold, if the exporter's price was higher than the export reference price set by the Caisse de Stabilisation, the exporter had to compensate the Caisse with the difference, called the "reversement". If the world market price was lower, the Caisse made up the difference with payment (the "soutien") to the exporter from its financial resources.
Under this system there are many private agents that participate in the marketing chain, there is no direct intervention from the government in internal or external marketing and prices are determined by the world cocoa market. Government involvement is usually centered on quality control, taxation and supervision. Due to competition and the non-intervention of the government, producers usually receive a much higher percentage of the FOB price.
Until recently, centralized marketing systems prevailed in almost all major cocoa producing countries in West and Central Africa. With liberalization, countries such as Nigeria, Cameroon and Côte d'Ivoire have fully privatized their internal and external marketing structures while Ghana has introduced competition in domestic marketing by allowing private licensed agents to purchase cocoa from farmers. A liberalized environment has existed for some time in Brazil, Indonesia and Malaysia.
