After challenging period, Cote d'Ivoire's agriculture sector starts to see fortunes rebound

Agriculture has been the largest single economic growth driver in Côte d’Ivoire in the years following independence, supported by a diverse selection of cash crop offerings that have benefitted from strong government support and promotion, fertile land, a favourable climate and growing conditions, and abundant water resources. The country is the world’s largest cocoa producer, second-largest cashew producer, and is also a significant producer of cash crops including rubber, palm oil, bananas, pineapples, cotton, coffee and coconuts.

Agricultural development has taken priority in recent years, as evidenced by increased public spending and development of a long-term sector development strategy emphasising innovation, land allocation and crop diversification. Value-added processing, particularly in the powerhouse cocoa sector, is also a major priority for the authorities, although drought and recent political unrest could weigh on production and investment.

At A Glance

According to the UN Food and Agriculture Organisation, Côte d’Ivoire is home to 21m ha of arable land, equivalent to 65% of its total area. In 2012, the most recent year for which statistics are available, the total area of planted land in the country stood at 7.3m ha, or 35% of total arable land, including 4.5m ha of permanent crops. Forest coverage has fallen from 16m ha in 1960 to 10.4m ha in 2012. The country’s southern Guinean zone spans 50% of its territory. This zone is the rainiest, and includes almost all of Côte d’Ivoire’s forested area. Agriculturally, the zone is dominated by coffee and cocoa, which cover two-thirds of its cultivated area, while annual crops including cassava, rice and plantain comprise the remainder.

Soil quality is good, and annual rainfall exceeds 1500mm. The zone is characterised by a four-season, sub-equatorial climate, including a dry season from December to March, a major rainy season between March and June, a dry season in July and August, and a rainy season from September to November.

However, traditional agricultural methods of clearing and burning are practiced, which reduce yields and, combined with rapid population growth, have led to widespread deforestation and loss of soil fertility. The next largest agricultural region is the Sudanian zone, covering 31% of the country’s northern region. A savannah region with a tropical climate, the zone has only one rainy season and annual precipitation ranges between 900mm and 1200mm. Rain-fed crops, including rice and peanuts are common and 40% of its farms produce cotton, although perennial crops including mango and shea butter are also grown.

Covering 19% of the country, the Sudano-Guinean zone is also characterised by four distinct seasons, including a November to February dry season, a major rainy season between March and June, a short dry season in July and August, and a short rainy season in September and October. Although precipitation can reach 1500mm annually, rains are more erratic and the area is prone to floods and drought, making it the most difficult area for agriculture in Côte d’Ivoire.

A number of major Ivorian cash crops have seen production expand significantly in recent years — notably rubber, cashew nuts, and mangos – although output in other areas, such as cocoa, oil palm and banana production, has been more dynamic, while the coffee, pineapple and timber industries have seen production soften.

Economic Impact

According to the World Bank, agriculture remains the mainstay of the Ivorian economy, accounting for 22.3% of GDP in 2013, employing 46% of the workforce, and acting as a source of income for two-thirds of the population. Agriculture also accounts for 47% of exports, or 62% of exports excluding oil and gas, and 40% of export earnings. The sector’s importance has also been reflected in recent budgets, with the Ministry of the Economy and Finance (Ministère de l’Economie et des Finances, MoEF) reporting that spending on agriculture rose from CFA128.4bn (€192.6m) in 2015 to hit CFA169.9bn (€253.5m) in 2016. This outpaced a national spending increase of 11.5% over 2015, with agriculture comprising 2.9% of total spending in 2016. Agriculture outlays moderated in 2017, with the MoEF’s draft 2017 budget projecting agriculture and rural development would receive CFA139.2bn (€209m), an 18% decline from 2016 levels, though still 8.4% higher than in 2015.

Government Policy

The agriculture sector is overseen by the Ministry of Agriculture and Rural Development (Ministère de l’Agriculture et du Dé veloppement Rural, MADR), formerly the Ministry of Agriculture, which was created in 1960 following the country’s independence and renamed in January 2016. Sangafowa Coulibaly has served as minister of the MADR since March 2010.

The decade-long conflict in Côte d’Ivoire, which ended in 2011, significantly strained the government’s ability to finance the agricultural sector. After the launch of the first National Agricultural Investment Programme (Programme National d’ Investissement Agricole, PNIA), which covered the 2012-16 period and committed CFA2trn (€3bn) with the intention of achieving food security in major crops and creating upwards of 2.4m jobs, the government of Côte d’Ivoire has launched a new PNIA to cover the 2016-20 period.

The 2016-20 PNIA is expected to cost upwards of CFA2trn (€3bn) and according to local news reports, international technical assistance providers have already pledged around CFA268bn (€402m) in support of the PNIA’s initiatives. The 2016-20 PNIA’s main goals are supporting land allocations, developing alternative sectors to rice, supporting economic resistance of the different sectors, developing agropols or cities built around farming areas, as well as support biodiversity-friendly sectors in the northeast and south-west and promote innovation within sectors that are ecologically and socially resilient.

The programme has already had a positive impact on the sector, with the MADR reporting in February 2016 that the food and cash crops segments recorded average annual growth rates of 11.5% and 7.02%, respectively, between 2012 and 2015, while the number of Ivorians experiencing severe food insecurity fell from 30% in 2008 to 8% in 2015.

Revenue Boost

There is also a push to further improve farmers revenues. Though total farmer revenues improved by 68% between 2012 and 2015, from CFA3.4trn ($5.1bn) to CFA5.7trn ($8.6bn), much of this is attributed to reforms in the coffee and cocoa sectors, and the government is currently examining options to democratise the increase in revenues to other sectors. In parallel to this, authorities are examining avenues to promote capacity building of all actors involved in the agriculture sector — whether it is production or transformation.

Improving credit access could help address the challenge, enabling farmers to afford better inputs and equipment, which would in turn allow them to adopt better farming practices, reduce loss of soil fertility and improve yields.

In May 2016 the World Bank reported that although agriculture accounted for a quarter of GDP in Côte d’Ivoire, the sector receives only an estimated 5% of credit, making improved access to credit an important priority for agriculture stakeholders. “Low yields can also be attributed to a lack of knowledge of the technology surrounding the agricultural sector,” Clotaire Allegra, general director of Côte d’Ivoire’s National Federation of Cooperatives, told OBG. “There is the issue of machinery, but also the knowledge needed to properly use fertilisers, and how to apply them and when.”

Food Security

Since 2011 the government has been keen to promote food security and local self-sufficiency in key staple crops. The PNIA, in both phases put food security and self-sustainability among one of the top priorities. Though the country does not suffer from chronic food deficit at the national level, there remain pockets of food insecurity and malnutrition, largely due to geographic isolation. Moreover, Côte d’Ivoire continues to import many of its needs in rice, meat and vegetables. Despite putting an emphasis on achieving self-sufficiency in rice production, structural issues related to land allocation remain.

In addition, Côte d’Ivoire must work to find a careful balance between lucrative cash crops such as rubber, cocoa or cashews, and the less lucrative crops that are required for the country to achieve real food security. “In Côte d’Ivoire there is greater acreage of plantation crops rather than cultivation crops. In order for the country to achieve self-sufficiency in food the percentage of cultivation crops, such as rice, wheat and so on, under irrigation should increase,” Suraj Rao, second vice-president of the Association of Cashew Exporters of Côte d’Ivoire, told OBG. “Deployment of arable land towards these agricultural crops is necessary.”

Training

In a bid to make the country more competitive in regional markets while also tackling unemployment, active measures are being taken to improve the training of farmers and entrepreneurs. In July 2016 the African Development Bank (AfDB), in conjunction with the Ministry of Youth, Youth Employment and Civil Engagement held a workshop on how to successfully implement the 2016-25 ENABLE Youth Côte d’Ivoire programme. The programme seeks to train the next generation of agriculture entrepreneurs by making it easier for Ivorians between the ages of 18 and 35 to start their own agricultural firms.

Beneficiaries will receive assistance in developing sound business plans and obtaining financing to launch their own businesses. Overall, the programme aims to create 300,000 agricultural enterprises and 1.5m jobs across the continent over the next five years. ”The development of the catering industry — and increased consumption of food service more generally — has had a significant ripple effect on the local agriculture sector as catering companies source the vast majority of their entrants locally,” Hassan Diallo, CEO of Nutrivoire, told OBG.

Additionally, a web TV station aimed at boosting interest in the agricultural sector was launched in May 2016 with support from the Technical Centre for Agricultural and Rural Cooperation, a joint institution of the African, Caribbean and Pacific Group of States plus the EU. Launched from Ouagadougou, Burkina Faso, the agri-business TV station reaches neighbouring Côte d’Ivoire, as well as Benin, Cameroon, Mali and Togo. The station promotes agricultural initiatives and spotlights stories of young agricultural entrepreneurs with thriving businesses so as to inspire young people to consider joining the sector, which is presented as a fundamental tool to curb unemployment on the African continent.

Cocoa

Côte d’Ivoire has long benefitted from its position as the world’s largest cocoa producer, with production rising by 20% during the 2013/14 growing season to reach a record 1.74m tonnes, increasing further to hit 1.79m tonnes during the 2014/15 growing season. Stakeholders also enjoyed the benefits of surging global prices in 2015, with the World Bank reporting that farm gate prices rose by 17% in October 2015 alone, enabling the country to significantly reduce rural poverty.

The cocoa sector is currently struggling, however, due to unpredictable weather, global market volatility and political unrest that has dampened investor sentiment (see analysis). Drought brought on by the El Niño weather pattern weighed heavily on production during the 2015-16 season, with production falling by 12.6% to 1.57m tonnes, while exports fell from 1.62m tonnes to 1.55m tonnes.

Ongoing efforts to improve productivity could offer a solution. France’s MAAF reported that Côte d’Ivoire is working to improve cocoa production, quality and sustainability through the Quantity, Quality, Growth Programme, known as 2C, which emphasises quantity, quality and growth. The programme involves teaching agricultural best practices to cocoa farmers, strengthening quality controls and replacing ageing orchards with high-yield cocoa plants. One such cocoa producing plant that appears set to be affected by the plan is the Mercedes cocoa plant, which was developed by the National Agricultural Research Centre. The Mercedes variety is more resilient to poorer weather than earlier iterations of plant grown in Côte d’Ivoire. This durability is of critical importance in an era of climate change and shifting weather patterns.

Rice

Rice has is an integral part of the Ivorian government’s plan for achieving food security, with the creation of the National Office for Rice Development (Office National du Développement du Riz, ONDR) in 2012, a public agency tasked with working towards achieving self-sufficiency in rice production.

The ONDR originally intended to produce the 1.9m tonnes of rice needed to meet 100% of Côte d’ Ivoire’s domestic needs by 2016. However, this goal was not met, as the country was expected to have produced 1m tonnes of rice in 2016, up from 900,000 tonnes in 2015 — itself a 200,000 tonnes increase from 2014 levels. However, this shortcoming did not occur from a lack of investment in the sector.

Indeed, the government invested around CFA672bn (€1bn) between 2012 and 2016 to achieve this goal, with backing also coming from the private sector. In 2013 French-Swiss commodities company Louis Dreyfus signed a CFA30bn (€45m) deal with the government to develop rice paddies in the northern regions of Tchogolo, Bagoué and Poro, with investments in irrigation systems intended to make 100,000 to 200,000 ha of land available to the company overall. The status of this operation, which aimed to produce up to 400,000 tonnes of paddy rice per year remains unclear due to a recent disagreement with the authorities.

In an earlier move, Algerian agro-industrial firm Cevital stated in 2012 that it wanted to invest upwards of CFA100bn (€150m) in rice production and processing in the Boukani region. This ambition became more concrete in 2016, when the group announced it was ultimately going to invest around CFA600bn (€900m) in Côte d’Ivoire’s agricultural sector by 2020, including investments in rice production and processing facilities.

In addition, the AfDB loaned CFA16.4bn (€24.6m) to Côte d’Ivoire to develop rice production and processing capacity, namely by transforming 923 ha of land into 873 ha of exploitable land for rice cultivation, as well as by opening a CFA3bn (€4.5m) rice processing facility in the Touba region, which was still under construction as of October 2016.

That said, there remains plenty of room for growth in rice production as the era of instability affected the sector in a variety of ways. “A number of agricultural workers left their parcels during the crisis, and today the rice paddies remain controlled by big bosses who do not manage these parcels sustainably,” Fortune Te, director general of the Cereal Investment Company, told OBG. “There is therefore a lack of labour available to work on the paddies, as well as a land appropriation issue. The MADR must target these areas moving forward.”

Rubber

Côte d’Ivoire is set to continue to be a main player in the rubber producing and exporting market in Africa. There is a great deal of public support to increase hevea (natural rubber) cultivation and domestic transformation.

Over the past 20 years the number of hevea cultivators in the Professional Association of Natural Rubber of Côte d’Ivoire (Association des Professionnels du Caoutchouc Naturel de Côte d’Ivoire, APROMAC ) has more than doubled, increasing from 60,000 in 1990 to 151,000 in 2016.

According to APROMAC, member cultivators yielded 350,309 tonnes of dry rubber in 2015 — 24,000 tonnes more than expected. This is expected to increase to 358,712 tonnes in 2016. “These numbers pertain to members of the APROMAC network,” Akpangni Attobra, secretary-general of APROMAC, told OBG. “Nevertheless, we expect that non-members produce only around 20,000 to 25,000 tonnes of dry rubber per year on average.”

Hevea

Côte d’Ivoire’s production of hevea and rubber should continue to increase in the coming years, despite such heavy reliance on the international trade market. The country now runs 10 transformation factories to process raw hevea, with two new factories expected to come on-line by 2017. The Ivorian government launched its seventh hevea project in the 2012-13 fiscal year to create 300,000 new ha of hevea cultivation over a 10 year period.

Though the project continues to be held up by a number of delays, hevea plants are being subsidised by up to 40% through a development fund to help producers grow their crops. Over 100,000 ha are reported to have been created thanks to this mechanism, and a further 6000 ha are due to come on-line by the end of 2016.

Ivorian hevea producers are hoping to boost production in 2017 to 500,000 tonnes, up from 450,000 tonnes in 2016, according to Michel Koblavi-Dibi, president of the Collective of Agricultural Organisations of the Hevea Industry. “The average producer holds three to four ha of hevea plants at 1600 km of dry rubber per ha, with larger producers yielding more than 2000 km per ha,” Attobra told OBG.

In December 2016 the government adopted a new draft law, which will serve to regulate the hevea and palm oil industry. The bill establishes a single regulatory for both segments.

Cotton

Côte d’Ivoire has been cultivating cotton for decades, primarily in the centre and northern savannah regions through small producers cultivating on farms averaging three ha each. Cotton remains a strategic crop for Côte d’Ivoire. Not only does it guarantee a sustained revenue stream for the farmers — who collectively made more than CFA37bn (€55.5m) in the 2015 season — but it also prepares the earth for the cultivation of other crops such as corn and peanuts. The cotton sector in Côte d’Ivoire is supported by the Ivorian Company for Textile Development (Compagnie Ivoirienne pour le Développement des Textiles, CIDT). Created in 1974 by the Ivorian government and then liberalised between 1998 and 1999, the CIDT’s primary mission is to develop the cultivation of cotton in the country.

According to Intercotton, Côte d’Ivoire’s main professional cotton organisation, the country produced 450,146 tonnes of cotton grains, which yielded 193,173 tonnes of cotton fibre. This corresponds to a 43.6% stripping rate achieved through 14 production units. That said, despite such stripping rates, Côte d’Ivoire appears to still have a way to go to reach its full production capacity. Indeed, according to Intercotton’s statistics, the country’s national stripping capacity is 550,000 tonnes per year. As with other agriculture subsectors, the government continues to invest in further developing the sector, which brings in CFA100bn (€150m) in export revenues annually.

Fruit

Pineapples and bananas are two of the most important fruit crops produced in Côte d’Ivoire. Prior to the crisis that disrupted the country for about a decade, around 215,000 tonnes of pineapple were exported to European markets, produced primarily by small cooperatives with strong rates of production. “During the crisis, exports of pineapples to Europe ceased and the small cooperatives lost their major source of income,” Dahouda Traore, special advisor to the president of the Central Organisation of Pineapple and Banana Exporter Producers (Organisation Centrale des Producteurs-Exportateurs d’ananas et de Bananes, OCAB), told OBG. “The pineapple sector never recovered.” Indeed, today less than 30,000 tonnes of pineapple are produced countrywide, including 6000 to 7000 produced by affiliates of the OCAB network.

Nevertheless, there is a renewed interest in processed pineapple in Côte d’Ivoire, primarily for the purpose of making juice. Outsider investors have started to look at possible expansion plans in the country. “A major US group is meant to set up in Côte d’Ivoire and start processing pineapples, but there is no clear timeline as to when and what the terms of the agreement are,” Traore told OBG.

Currently, Côte d’Ivoire has two processing plants that produce pineapple juice, but the MADR has been hinting at finding a strategy to jumpstart the sector once again, namely by financing the Interprofessional Fund for Agricultural Research and Advisory Services, which is meant to report on the state of the pineapple sector and produce recommendations for the ministry.

Côte d’Ivoire is also one of the world’s largest producers and exporters of bananas, with an estimated 80,000 to 90,000 tonnes per year exported primarily to European markets, while individual local farms largely cover the local market at a rate of 5000 to 6000 tonnes of bananas per year. “The local market represents less than 10% of Côte d’Ivoire’s total banana production,” Traore told OBG. “The local market’s share is also redistributed to Burkina Faso, Mali and Niger.”

The banana sector is being supported by the EU, which is financing a 10-year plan composed firstly of a consolidation phase to enable the sector to be more competitive against Latin American competition, and secondly a phase to improve commercialisation on the local market and increase sales to neighbouring countries.

This point is of particular importance to Côte d’Ivoire’s banana sector moving forward as “the biggest threat to our exports to Europe is the free trade agreement between the US and the EU, which could potentially see the arrival of our Latin American competition on to the European markets at more competitive rates,” Traore told OBG.

Cashew

“Cashew is the future,” Rao told OBG. This statement stems from the potential this cash crop has for the economy of Côte d’Ivoire. Indeed, currently the country produces between 675,000 and 700,000 tonnes of cashew — ahead of India’s 500,000 tonnes — yet less than 5% of its total production is processed locally. “The main reason for this low rate of domestic processing is the lack of skilled labour in the cashew sector,” Rao told OBG. “Cashew processing is a labour-intensive task requiring skill. Peeling the kernel, for instance, is traditional in countries like Vietnam and India, but not in Côte d’Ivoire.” Nevertheless, the Ivorian government is looking to increase its domestic processing rate. As the technology improves, machines are progressively introduced to help reduce the sector’s dependency on skilled labour, and, while such investments are significant, Rao told OBG that the government is looking to introduce taxation incentives to mechanise the sector and thereby increase domestic processing rates. “Cashew production is expected to increase to 900,000 tonnes by 2020,” Rao told OBG. “By increasing domestic processing rates and expanding the sector further, 60,000 to 100,000 direct jobs can be created.”

The government is not relying simply on lower taxes to spur growth in the sector. It has taken a proactive approach. “The government has a policy of fiscal incentives including direct export incentives to support agricultural processing, so the next step is to ensure efficient value addition in segments like raw cashew nuts,” Rao told OBG. “Currently Côte d’Ivoire provides more than 30% of the global raw cashew trade, which means that improvements in post harvest practices and farm gate quality control can significantly raise revenues.”

Coffee

Once one of Côte d’Ivoire’s strongest and highest yielding industries, with up to 300,000 tonnes produced in 2002 by 440,000 producers across 1.3m ha, the country’s coffee sector has been strongly affected by the downturn in global coffee prices and overall instability. Production reached its lowest levels in 2008, when total production hit 67,610 tonnes, but began to increase again in 2009 to reach 144,716 tonnes, and has stabilised at over 100,000 tonnes annually since. The 2014/15 season, for example, ended with 126,000 tonnes, with the 2015/16 season forecast to have ended with a production of around 130,000 tonnes. These small signs of recovery are further boosted by the regulating agency, Cocoa-Coffee Council (Conseil Café Cacao, CCC), efforts to continue growing the sector.

Created in 2011 the CCC is part of the government’s attempt to transform the coffee and cocoa sectors and find lasting solutions to the decrease in output. In 2013 the CCC pledged to invest CFA8.3bn (€12.5m) in the coffee industry so as to increase annual output to 198,000 tonnes by 2018. Côte d’Ivoire is currently the third-largest producer of coffee in Africa, and CCC intends to boost production to slightly over 400,000 tonnes by 2023.

Outlook

The diversity of crops in Côte d’ Ivoire’s agriculture sector ensures that the sector will remain a substantial source of economic growth and employment for the country. A renewed emphasis through the 2012-16 PNIA and the 2016-20 PNIA on cash crops such as cashew, coffee and cocoa is expected to see the overall share that agriculture contributes to the country’s GDP increase.

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The Report: Côte d'Ivoire 2017

Agriculture chapter from The Report: Côte d'Ivoire 2017