Cocoa Exporter Refutes Claims on Bill to Amend LACRA

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Sheikh A.Turay: Bill to amend the act that established LACRA is not in the interest of the country and needs to be retrieved from the Committee room.

The President of the National Cocoa Exporters Association of Liberia (LINACEA), Sheikh A.Turay, has refuted claims by authorities at the Liberia Agriculture Commodities Regulatory Authorities (LACRA) that the Liberian economy can experience growth if the LACRA Act of 2016 is amended to provide exclusive rights to the entity to export cocoa and coffee.

LINACEA president has argued that allowing LACRA to have monopoly on the exportation of the cash crops will not be in the best interest of the country, rather the act should maintain open competition among actors of the sector.

Recently, the Communication Director of LACRA, Gordon Garway, posted on the LACRA’s social media platform that the bill to amend LACRA, if considered will greatly benefit the country in terms of revenue generation for the government; and the improvement of the lives of smallholder cocoa and coffee farmers.

According to Garway, the good intention of the bill has been misconstrued by the public, especially Liberian exporters whose contributions, he claimed, are of less significance in the sector.

“The amendment of the Act will empower LACRA to transform the sector which exporters have failed to do over the years,” Garway further argued. “We shall have the opportunity to reduce poverty in the lives of farmers and raise more revenues for the government to undertake needed projects,”

In counter argument, Turay maintained that the act needs to be retrieved from committee room at the House because it has the propensity to undermine the many developments done in the sector by international partners,” he said.

According to him, monopoly in the cocoa sector will create uncertainties for all actors, including farmers.

“Consider what is happening today in the rubber sector, where a single entity is responsible to buy rubber from smallholder farmers. The farmers have lost the opportunity to sell their produce because the company (Firestone) has said that they cannot continue to transact business with farmers,” he said.

“In fact LACRA as an entity of government to have exclusive rights for export lacks the capacity. This bill has a hidden intention to deny local exporters the opportunity for business and include those foreigners who are afraid of competitions,” he said. “As as result of the existing competition, smallholder farmers are obtaining attractive prices from cocoa as compared to neighboring countries. It is the competition in the sector that drives the price,” he stated.

According to Turay, the bill among other thing states that exclusive rights to LACRA will empower the entity to work with any exporters they wish.

“Why will you want to endorse such a legislation that will disregard procurement processes,” he asked.

Although, LACRA is not the crafter of the bill that is currently before the legislature for amendment, the management has since welcome the action.

Bong County District #5 Representative, Edward Karfiah who is the chairman of the House’s Public Account and Expenditure Committee is the sponsor of the bill.

The LACRA Act was passed in 2016 during the administration of former President Ellen Johnson Sirleaf and approved by the 53rd Legislature, which abolished the Liberia Produce Marketing Corporation (LPMC).

The new law established the entity as a semi-autonomous agency of the government and shall be under the general supervision of the Ministry of Agriculture.

Its functions, among other things, are to administer and promote the agriculture export trade of Liberia, to increase agriculture productivity competitiveness, value chain development and environmental sustainability, especially for smallholders, including women and youth and to promote a robust, competitive and modernized agriculture sector support of sustainable economic growth and development.

The Act also allows LACRA to license exporters and serve as an advisory and dispute resolution body but does not give LACRA the right to export or resume the responsibility of the defunct LPMC.

14 COMMENTS

  1. Liberia’s economic model has historically been a free market system based on the United States’ model and it makes no sense to change that. When the telecom sector was opened to competition, it attracted many more players and investments, which led to substantially reduced prices for cell service across the country. Today, almost anyone can afford a cell phone in Liberia. Consequently, the best way to develop the cocoa sector is to allow competition. Allow farmers to sell his cocoa beans to whomever is willing to pay the highest price for his beans. Allow anyone with the financial means who wants to export cocoa do so if he/she meets the regulatory requirements set forth by government. The best way to grow the Liberian economy quickly is to reduce regulations and allow the free market to thrive. Thanks.

    • Capitalism or Liberalism or Communism or Socialism has advantages and disadvantages. Many developed and developing countries around the world use the blend of them and thrive.
      What should be a bone of contention here is how the country adopting the blend expediently exploit it to the benefit of its population, given their current socio-economic situation.

      In the case of Liberia, given the high illiteracy rate, poor infrastructure and huge investments needed in the sector, I agree that LACRA has a vital role to play in promoting Agriculture in Liberia.
      Our poor and illiterate farmers should NOT be left in the hands of dodgy economic operators. They will be exploited under the disguise of offering them better price whereas, they get the least benefit globally in the sub region.
      The Ivory Coast and Ghana have similar regulatory board in place and their farmers are doing great while government revenue from the sector is controllably collected practically at 100%.

      I personally think this is a good move. I hope the committee will vote the bill.
      Mr. Turay, abide by this bill when voted into law. We want to approve the livelihood of our farmers.

      • Petarus Dolo – There is nothing wrong with having regulation but it should not be used to stifle the free market system, which has turned America into the most powerful economy in the world. If you create a single exporter of cocoa beans, you create a monopoly just like when Lone Star cell was a monopoly and the price of cell service was woefully beyond the reach of most consumers. Firestone is a good example of another monopoly and it is not working too well for rubber growers. When Firestone closes for maintenance or whatever, there are no other buyers and you are stuck. That is not a good system. You implied that monopoly, which you tried to obscure by using the term “regulation” will protect our “illiterate farmers” but that is not true. In fact, when you have only a single buyer of any commodity, it always lead to lower prices because there is no competition. Monopoly violates the law of supply and demand because it artificially creates inflation or deflation of prices and my Lone Star example supports my argument. In the cocoa bean market, there would be many buyers going from village to village to buy directly from farmers. Farmers would get a better price because of competition. These buyers would then up-sell to larger buyers or exporters. So in essence, the free market will create competition and better prices for farmers while also creating new cocoa entrepreneurs. Ghana is a nice country but I would rather emulate Rwanda for a myriad of reasons.

        • Mr. Phil George,
          First, note that I am a proponent of the customization of all economic policies, technological innovations and jurisprudence.

          I support free market liberalism wherein trade and open competition are not inhibited, and the interests and welfare of the people not jeopardized or compromised.

          As much as the USA is a great and economically powerful nation, let’s not always blindly try to emulate that great nation. Their system was subject to prolonged debates and years of experimentations before finally defining short, medium and long-term execution plans to be perfected to what we see today. Brains were stormed, books were written, and policies were adopted. Note that their democratic system and economic model are customized.

          What do I think about the cases of Lone Star, Firestone, and other monopolies in Liberia? From my short professional experience, unless I read the contextual documentation to construe the underlying factors, I will never naively condemn those contracts from the onset.

          While it is true that breaking the monopoly of Lone Star has greatly decreased prices and made communication affordable to many, you do not however have an idea of the damage caused to the company for such decision. Also, think about the economic blowback if a unilateral decision were to be reached to end the monopoly of Firestone.

          Entrepreneurship is risking all that one has; monetary, financial and human capital, as well as one’s life and family’s livelihood.
          Cognizant of the huge investment involving telecommunications, it is not commonplace to have many people to take the bull by the horn if there are no figures available to make projections and determine one’s market share. This was exactly the case for Lone Star and Firestone, 2 common examples.
          It would be easier for others to come later to reap what they have not sown. Did the pioneer company breakeven before opening the market?

          To this background, I would personally support the Liberian government being involved in major sector entrepreneurship to empower Liberians to later repurchase such companies. In this way, all Liberian developments and productions would be customized.
          To achieve this goal, we need to constitute a fund financed through levies on our raw materials to pay comfortable and stable emoluments beyond the control of any political parties to a group of Liberian think tanks whose sole responsibility would be to think or rethink our development models and techniques.
          This is what I want to bring on the table within the ANC to begin a sustainable development process in Liberia.

          Back to our topic on LACRA, this bill should pass for our farmers to hope and dream big and live comfortably like their counterparts in Ghana and the Ivory Coast, or even better.
          LACRA would guarantee a stable seasonal price across the country. We do not want our farmers to be at the mercy of those vampires who may decide to hold unto their money to punish our farmers or make them to succumb to their petty cash being proposed. See the example of the recent gasoline crisis? Had the Liberian government been the sole importer of petroleum products, the nonsense we heard people saying for making our people to live miserable wouldn’t have been said.
          Everything should be centralized around LACRA. It should become the sole buyer by accrediting small buyers and multinationals, like in Ghana or the Ivory Coast. It should be able to stabilize prices or retrieve the products for the world market at any time too.

          Though doing fantastic, but when it comes to cocoa and coffee, Rwanda is not an example to cite.

          • Mr. Dolo – If you want to grow the Liberian economy faster, free market is the way to go. Only award monopoly under extreme circumstances and employ smart regulations. For example, there should be more than one LECs in Liberia because it creates competition and lower prices for consumers. I cited Rwanda because it’s a growth country, developing faster than any country in black Africa. I believe they’re a major coffee exporter as well. We should want to learn from countries with strong economic growth and modernization, like Rwanda if you want to look across Africa for inspiration. Because of our ties to the United States and we are familiar with that system, why not emulate that system? It makes a lot of sense. The free market is very efficient and it works well but you don’t seem ideologically committed to the concept. You want to pick winners and losers and that’s not free market -it’s not very efficient.

            I know someone who wants to invest in large-scale cocoa farming in Liberia but he won’t do it if he was not allowed to export his own beans. I don’t blame him. You said if the government was allowed to import gasoline, there won’t be any shortage. I beg to differ. Governments are not more efficient than the private sector, especially the GoL. For example, the Liberian government runs a public transit system, how well is that working? Government run schools are the worst performing schools in the country. I can go on and on about how the Liberian government does a very poor job of running anything. Gong to a government run hospital is like going to your grave. If you live in Liberia, your life is at serious risk in case of a medical emergency because somehow, Liberian officials don’t have the capacity to develop a life-saving healthcare system to save themselves much less the general population. You guys are doing a very poor job running the country.

  2. Welcome back my dear friend Phil George. It’s a pleasure to read your comment this morning. I hope everything you had undertaken during your absence has been accomplished through His grace.

    Later.

    • Hey Hney, good to see you’re doing well. Unfortunately, the folks back home love to do dumb things – they try to emulate other countries in the region without careful analysis to see if the Ghana situation fits our situation in Liberia. Their usual argument: “Oh Ghana does it so we should too.” That’s fundamentally the wrong way to go about making good public policy because Liberia’s economy is so small compared to Ghana, Ivory Coast, or Sierra Leone. We need rapid economic growth to solve the myriad of problems in the country. The big question policymakers should ask themselves is: What can we do to stimulate the cocoa industry in Liberia? The answer to that question is to create a free market system in the cocoa sector. Don’t discourage investors who might want to develop large cocoa plantations for direct export. If I’m an investor and I want to grow cocoa, I certainly won’t do it if I will be forced to sell my beans to a local buyer. I just won’t because I’m capable of exporting my own cocoa beans to get the best price. Please don’t create a monopoly.

  3. ghana and ivory coast produce 65% of the world’s cocoa product (beans) If a monopoly works there and they are the largest producers and successful. HELL YES HELL YES HELL YES

  4. Phil George,

    I am not in government. I oppose this government. Personally, I think they are right on this one. This not America, but Liberia.
    Thoroughly read my reply again. I am a proponent of customization (personal point of view)

    Let me leave you with these wise words:
    “Liberia will not change because we say so or wish it. Liberia will change when we do the work. It’s time we elect leaders who will get the work done”, Alexander B. Cummings, political leader and standard bearer of the ANC.

    • Mr. Dolo – You’re not in government now but you will if Cummings wins the presidency and you will come in with your quasi understanding of market economics so this is the time to get it straight. It’s laughable when you say “Liberia is not America” because somehow, you don’t believe in greatness. Such low expectation of Liberia is one reason the country continues to be poor and underdeveloped. Look at Israel…it is not America but they have done a very good job emulating the United States system with modern institutions such as hospitals, universities, etc. In your mind and others like you, you believe that we can’t emulate the best countries on earth because we’re not good enough. That kind of thinking is self-defeating and shortsighted. Do you think Liberians would be better off if they had one good hospital like Rhode Island Hospital or Massachusetts General? You can bet on it.

      • Mr. Phil George,

        I repeatedly used and like the principle of the word “customization”.
        The USA, the world most powerful country economically and militarily, does NOT implement the free market according to the connotation proper of the word. China or BRICS countries use the principle of the free market but customized to their tradition, philosophy and national interests.

        Liberia is NOT even a developing country. Our country is an underdeveloped or 4th world country, per se.
        Opening our market stupidly could incite someone like Bill Gates or Warren Buffet or Michael Bloomberg (someone who can spend Liberia’s annual budget within 3 months on a losing campaign) to come in and buy our entire country. It would be disastrous for you as Liberian.

        Your understanding of the free market is cursory and not mature. The Israelian market is not open as you think. There are limits and hurdles, like any country on planet earth.
        No market anywhere in the world is as open as that of the USA, yet the USA has some restrictions in certain domains.
        I agree we do not have enough medical infrastructure, modern medical equipment and enough trained medical personnel in Liberia. I would love to see Liberia regain its place in the sub region when it comes to this discipline. Your country was a reference and many outstanding medical doctors in the subregion then obtained their medical education in Liberia.

        To this end, we are on a crusade within the ANC to bring real fixes to these problems. There are no seasoned politicians in the ANC but revolting patriots who want positive change in the status quo in Liberia. It doesn’t mean we should sell the country to dodgy economic operators. There are monies out there but beware of money launderers.

        Being objective is not holding any inferiority complex to anyone or any nation. I would love to see Liberia have the same literacy rate as the USA and empower Liberians financially to customize our development models.
        History has proven that no one can ever develop your country as you would like to see it. We need our own architects to give us a development plan, our engineers to define and customize our technologies, our industrialists to produce cheaper tools and machinery and our women and men of letters to write and tell our stories as they took place.

        May the USA mold you properly to be of great asset to motherland Liberia.

        My regards, Sir.

  5. sir, you don’t have to worry about the billionaires you mention coming to liberia to buy it anytime soon, as you have already sold it to the Indians, Chinese and Malaysians….I bid
    you good day.

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