Ivory Coast, the world’s biggest cocoa grower, has set up a stabilization fund designed to make sure farmers will receive a minimum price for their beans.
President Alassane Ouattara signed a decree establishing the fund, which already contains 29 billion CFA francs ($54 million), government spokesman Bruno Kone told reporters in Abidjan, the commercial capital, today.
The government plans to increase the fund to 40 billion francs before the main harvesting season begins on Oct. 1, Kone said. The fund will not hold more than 70 billion francs, he said.
The reserve is part of industry reforms that include selling the future harvest through twice-weekly auctions before the start of the crop season. The fund is meant to mitigate the risks of the pre-selling system for purchasers, who have to agree on a price months before the delivery of the beans, according to the government.
Under the new plan, buyers must pay farmers a minimum cocoa price equal to 60 percent of the international price as of Oct. 1, the government said when the policy was announced last year.