Pullout of Armajaro – a blessing in disguise

Thu, Jul 31, 2014

The shutdown of the St. Vincent Cocoa Company here in St Vincent and the Grenadines a few weeks ago, may very well be a blessing in disguise.

Since the memorandum of agreement for the reintroduction of the growing of cocoa, on a commercial scale, in St. Vincent and the Grenadines was signed by Armajaro and the Government on August 12, 2011, dissatisfaction has been expressed in certain quarters, most notably and consistently by farmer, activist and SEARCHLIGHT columnist Oscar Allen, who has argued that the agreement was not in the best interest of local farmers.{{more}}

Armajaro’s local arm was the St Vincent Cocoa Company, and late last year, Armajaro sold its commodities trading arm, including the St Vincent Cocoa Company to Ecom.

Allen and others in opposition to the Agreement with Armajaro had listed among their grouses, the duration of the Agreement – 50 years – with a review after 20 years. They also felt that the nature of the agreement would take Vincentian farmers back decades, as it did not allow for development of the farmer or his participation in decision making or profit sharing.

Farmers, who signed agreements with Armajaro, and later Ecom, would have to sell their cocoa in its wet unprocessed state, with little or no value added. There would be no technology transfer and the Agreement gave Armajaro exclusivity in the sale and marketing of cocoa produced in St. Vincent and the Grenadines.

Allen and others questioned whether Government had really taken farmers best interests into account when the agreement had been signed. At the signing, Prime Minister Gonsalves had indeed noted that the agreement was not social welfare agreement, but a business agreement. He said Armajaro is not a charitable institution, and unless everyone could make a profit out of the agreement, it would not survive. And pull out they did, once they realized that prospects of viability within a few years were slim.

Their pullout does not leave local cocoa farmers flatfooted however. Luckily, Allen and others had the foresight to set up their own independent cocoa producers’ group, and now, with Ecom breaking the agreement with the government by not giving the requisite notice of their intention to leave, the local industry has received an injection of resources, in the form of the local assets of the Company, which ordinarily would not have available to them had they tried to go it alone from the beginning. According to the Ministry of Agriculture, Ecom left behind 200 acres of well established cocoa, a gene bank, three nurseries with over 200,000 plantlets and a wealth of research information.

Coincidentally the cocoa producers’ group is having its first annual general meeting next Tuesday and the way is now clear for farmers who had signed agreements with Armajaro to become members of the group, to work together, to turn what should be viewed as a temporary setback into gain.

Certainly, the most difficult hurdles for the local group to overcome would be raising sufficient capital to invest in the technology needed to process the beans to international standards and finding international markets for the processed beans and chocolate.

But such hurdles are not insurmountable and most definitely can be overcome if the farmers band together and are supported by the Ministry of Agriculture and local investors.