Cocoa agreement gets support of the House

The people of St. Vincent and the Grenadines now have more information on the agreement reached between the government of this country and the Armajaro Trading Limited on the establishment of a cocoa industry here.{{more}}

By way of a motion in the House of Assembly, last Friday, November 25, Prime Minister Dr. Ralph Gonsalves spoke of the Memorandum of Agreement entered into with Armajaro on August 12 this year.

He indicated that an Act will follow early in 2012.

Gonsalves proceeded with the details of the agreement, outlining the responsibilities pledged on both sides.

“The agreement is to provide the rubric for both Armajaro and Government to state broadly our obligation and what we seek to do and to see how we can get this going with the farmers to plant cocoa,” the prime minister explained.

The agreement is already effective and is for a period of 50 years, Gonsalves explained.

However the agreement will come in for review in 2031, or after 20 years.

The prime minister further explained that Armajaro is interested in buying cocoa from the local farmers.

“There will be no processing done here,” he said, adding that the intention is to have the cocoa beans produced here sold to a high end chocolate maker.

The point was made, according to Gonsalves, as there had been talk by some that who were of the opinion that the government should have invested in getting a factory here.

But this was impossible, he explained, because St Vincent would not be able to produce the mass volume of the raw materials required, which meant that a large quantity of the beans would have to be imported.

“And they are not interested in putting up a factory. You need an investor for that. Armajaro doesn’t make chocolate, they are traders,” Gonsalves said.

“So we are in the business of growing cocoa to trade it as a basic commodity,” he continued.

It was noted that Armajaro had the understanding that the farmers will grow the product only if it was economically viable to them the prime minister explained.

“The farmers are rational economic beings. Farmers are not foolish; they know if there is money to be made, and if there isn’t any money to be made they would not get involved.”

Gonsalves proceeded to outline the obligations of the company to the farmers and government which include a two year notice should a decision be made to forfeit the agreement.

Armajaro has also agreed to set up a subsidiary, which according to Gonsalves has already been done and is known as the St Vincent Cocoa Limited, in which they may consider selling shares to the farmers.

Through this subsidiary, the company is expected to purchase the necessary infrastructure.

“Armajaro is not interested in growing cocoa…they are interested in the farmers doing it,” Gonsalves said, adding that the agreement did, however, indicate that the company will help set up the industry and assist where possible.

The obligation of the government includes the granting by way of legislation exclusivity for the cocoa produced to be purchased and marketed under the conditions of the agreement.

However, the prime minister noted that farmers engaged in the production of cocoa on a smaller scale will be allowed to sell their produce on the local market, and to Trinidad, as is being done currently.

Other details of the agreement on the government side include arrangements for alien land owners’ licenses and work permits.

While there was support on both sides for the successful passage of the motion, members of the opposition expressed their concerns.

Roland ‘Patel’ Matthews, Area Representative for North Leeward, said that he was grateful to be hearing that the message was getting out in the House, but was concerned that it was not reaching the farmers in the various communities.

He called for a programme for farmers to become engaged on the progress being made and to give the farmers confidence that the government was supporting them.

Leader of the Opposition Arnhim Eustace raised his concern about the time in which the first review was scheduled, saying that issues of prices would come up from time to time.

However, Gonsalves responded that discussions on prices will be done on an ongoing basis, and that once the farmers formed themselves into a formal organization, they will be able to engage the company in dialogue.

But Dr Godwin Friday, Representative for the Northern Grenadines, made his contribution, saying that the concerns put by his colleagues ought not to be slighted.

Friday said that he hoped that the government would promote the best interest of the farmers.

“What matters now is how the farmers take it,” he said.

Friday further contended that while Armajaro had their own interests in the deal, there were interests at stake at the local level.

“Agriculture is at a delicate stage and we have to give farmers confidence,” he said. (DD)