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close this bookAfrican Agriculture: The Critical Choices (UNU, 1990, 227 pages)
close this folder6. Nigeria and the Ivory Coast: Commercial and export crops since 1960
View the document(introductory text...)
View the documentIntroduction
View the documentAgricultural production trends in both countries
View the documentIvory Coast: Development strategy and commercial and export agriculture
View the documentHow the state intervenes
View the documentNigeria: Commercial and export agriculture
View the documentConclusion

How the state intervenes

Mechanization alone, and even combined with large credit facilities and the availability of land, could not have accounted for the exceptional growth of commercial and export agriculture in the Ivory Coast since independence. A decisive role in accelerating agricultural growth was the state, which, despite Ivorian readers' choice of a free trade and free competition system, and their oft-repeated faith in private initiative, soon became the real driving force of agriculture.

In January 1961, when Houphouët-Boigny presented his government's programme to the National Assembly, shortly after his election to the Presidency, he announced that the Ivory Coast 'proposed.. to achieve a State Capitalism'. And he went on to state that, alongside private effort, there would be:

a preponderant effort by the State which will take various forms: first. through public investment making use of both external assistance and national funds: second, through taking shares in enterprises using the country's natural resources, which shares will be in proportion to the size of these resources: lastly, through the creation of State enterprises.27

State intervention was of two kinds: 1) direct take-over of production activities, specifically for oil palm, coconuts, rubber and sugar cane And 2) was limited to providing management for, and a variety of assistance to independent producers of crops already widely grown before independence, such as coffee, cocoa, bananas and pineapples, and also annual crops such as cotton, that do not need large investment and that pay-off after one season.

The first oil palm plan

This plan, the first concrete step in massive state intervention in the country's economy, had several aspects.

First, in 1963.28 a state company, SODEPALM was formed, with the task of creating and exploiting commercial plantations of selected oil palms and, around each of its own blocks of oil palms, promoting so-called 'village' plantations, belonging to private Ivorian citizens. The SODEPALM plantations were to be sufficiently large and productive to 'ensure the profitability of the operation and a regular supply to the processing factories'. 'Village' plantations were to be situated at a maximum distance of 20 kilometres from the factories to enable their owners to benefit from the logistics, and the advice of the SODEPALM estate of which they were an extension. A dense network of roads and tracks was to serve the whole and facilitate its exploitation. Paid technical assistance was supplied by agronomists from the IRHO, the French research institute that specialized in oils and fats and supplied SODEPALM with selected seeds.29

By the end of 1978. SODEPALM owned outright 52.000 hectares of commercial plantations and 38,000 hectares of 'village' plantations scattered among 10,000 planters. Thereafter, the commercial plantations programme virtually ended, since, as the 1979-81 three-year programme of state actions announced, the Ivory Coast was already endowed 'with industrial plantations forming a viable agro-industrial core making possible the development of village plantations'.30 Stress was then on building-up village plantations, which the 15-year second oil palm plan currently underway envisages extending to 33.700 hectares, against an extension of only 1,200 hectares for the state commercial plantations.31

In 1967, a similar model was applied to coconut plantations, for which a special section was created within SODEPALM. By 1981, this section owned 19,195 hectares of commercial plantations with an output, in that year, exceeding 92 million coconuts. The output of SODEPALM-supervised village coconut plantations in the same year was equal to almost 12% of the commercial section's.

The oil palm plan's industrial and commercial aspects consisted in the formation, in 1969, of two mixed ownership companies. PALMINDUSTRIE and PALMIVOIRE. The former was responsible for the management and exploitation of the commercial units integrated into the oil palm and coconut plantations, and the latter for marketing oil palm and coconut products, and for the creation of twelve palm oil mills and a crushing mill for the trituration of palm kernels and copra.

With the end of the large-scale commercial plantations programme, the SODEPALM-PALMINDUSTRIE-PALMIVOIRE group was reorganized. PALMIVOIRE was wound up and PALMINDUSTRIE was changed from a mixed ownership to a state company and, in 1978, was charged with the management of commercial oil palm and coconut plantations in the framework of the oil palm and coconut plan, for the collection of the production of village and industrial plantations and the industrialization of oil products'.32

Finally, the social aspect consisted in the creation of new villages able to receive and settle individual planters under the wing of the state company.

Alongside the state's oil palm plan, there existed a private oil palm subsidiary, whose agricultural role was insignificant (only 9,640 hectares of selected oil palms in 1982). On the industrial level, however, where it included four different companies and was dominated by the UNILEVER group, it was more important, in particular upstream from PALMINDUSTRIE, since this private sector processed raw Ivorian vegetable oils into refined oil, soaps, and so on.

The Ivorian development strategy: consequences and limits

What emerges from the oil palm case study is a division of labour that: 1) recognizes that the French research transnational. IRHO, has a monopoly on the production of high-yielding seeds and the improvement of cropping techniques to be applied: 2) gives a key role to the state in financing agricultural production and the establishment of structures for private planters; 3) organizes the sharing of preliminary industrial processing activities between the state and the foreign private sector, the dominant role again falling to the state: 4) enshrines the hegemony of the foreign private sector, in this case a transnational, at the level of the processing of the original agricultural product into a finished product. This division enables a transnational to have access to abundant raw material, usually after preliminary treatment by the state industries, delivered at the local guaranteed price. The multinational, in principle, is enabled to have relatively low production costs for its finished products, a major advantage over international competition and, finally, as a bonus, more or less captive markets within the Ivory Coast and countries associated with it This guarantees the transnational a more than substantial share of the surplus generated by agricultural labourers, peasant-planters and factory workers. This windfall profit, made increasingly attractive by a more than generous Investment Code, was instrumental in attracting foreign businesses and transnationals to the country.

Outside the oil palm sector, agricultural activities associated with the production of coffee and cocoa had, by 1965, become a virtual monopoly in the hands of Ivorian private planters:33 sugar is exclusively under the state company SODESUCRE: and rubber and cotton are wholly controlled by the SAPH and the CIDT, enterprises with majority public capital (state share: 60.4% of SAPH and 55% of CIDT).34 In 1978, out of 96 productive pineapple plantations. 69 were Ivorian, nine mixed ownership and 20 were foreign owned. In the same year, lvorians' plantations were 57% of the total: in 1981 Ivorians' share represented 66.5% of the total.35

Although no precise data exist, the impressive tonnages of bananas exported by the Ivory Coast or processed in its factories are, very largely, from either state or privately owned plantations. Private planters co-producing with a state company, benefit from the infrastructure and logistics made available to them by the state company. Those wholly privately owned are assisted by the state with management and organization, a variety of bonuses and advantages of which the most effective is the subsidy for the extension of plantations, introduced for cocoa, ox-drawn farming and (from March 1977) free fertilizer for cotton producers.36

Agricultural production activities are largely dependent on the scientific and technological capacity of transnationals, mostly French transnationals involved in applied research: sugar cane. IRAT: cotton. IRCT and CFDT; coffee and cocoa, IFCC and CAPRAL(-NESTLE): rubber. Michelin.37

Cotton-ginning is provided by the CIDT, in which the State holds 55% of the shares, while overseas marketing, spinning, weaving and printing are currently in the hands of private companies or companies with majority private capital. Distribution of capital in 1977 showed French, Japanese. Dutch and American interests playing an active role, and, in 1981, included almost two-and-a-half billion Francs CFA of Ivorian private capital out of a total of 13 billion.38 While 66.61% of coffee exports are controlled by public and private Ivorian interests.56 private enterprises, especially Nestle, are significantly involved in processing: this pattern similarly applies to cocoa and cocoa products.39

In addition to the social division of labour just described, another aspect of the Ivorian development strategy is the sectoral approach chosen by the state. The state mobilized a substantial share of its resources, made available particularly by the Stabilization Fund's reserves, for each major commercial and export crop and hence for each region, in turn, able to produce them. First, coffee and cocoa, then after 1964, oil palm, coconuts after 1967, sugar after 1974, and so on. In short, rather than attempting to synchronize development throughout the country, the state has accommodated itself, temporarily, to inter-regional imbalances, possibly to be corrected later.

Finally, unlike private companies, in which management is still dominated by expatriate staff, state companies have allowed Ivorian managers to rise to the positions they covet and to manage substantial resources. But in the Ivory Coast, as already noted, it is not unknown for public and private sector jobs to be held simultaneously even at the highest state levels, and its basic economic option favours the quest for profit. Increasingly, therefore, these cadres were soon adding to their already high licit incomes (72% higher than equivalent level cadres in the civil service),40 resources drawn from illicit operations: commissions on purchases and investments: over-invoicing: or even plain malversation of their companies' resources. These illegal practices, existing also at the administration level, apparently were never dealt with seriously, and seem to be an accepted method enabling those newly admitted to the leading group to amass wealth.

Consequently, the production costs of agro-industrial complexes managed or controlled by state companies gradually increased, reducing the surpluses available for the state and the transnationals' profit margin. The critical threshold was crossed when, with the slow-down of economic activity in the West, the tonnages of Ivorian agricultural exports began to fall and their sale prices to collapse.41 Consequent reduction in state revenues called into question the country's capacity to honour debts incurred on the international financial market, and IMF intervention became inevitable. Among the recovery measures announced by the Ivorian state at the PDCI Congress in September-October 1980, were the dissolution of 15 state companies, the removal of numerous allowances in kind to state companies' senior staff, and their salaries aligned with those of the civil service.42 The IMF did not impose devaluation, which, in fact, it never imposes on franc-zone African countries. Privatization of state enterprises and closure of two of SODESUCRE's six sugar complexes were, however, included.

The privatization measures come as no surprise but those aimed at SODESUCRE merit more attention, in so far as they illustrate certain aspects of system's functioning and help highlight some of its limitations.

The Ivorian sugar programme was launched in 1974, in the framework of the development plan for the previously undeveloped North, an area haunted for some years by the spectre of drought. Launched in a period of strong expansion, when the state still had sizeable financial resources, it was the subject of quite unprecedented over-invoicing: 35 billion CFA francs at least, according to Jeune Afrique's estimates, 34 billion for just three of the complexes, as Houphouët-Boigny himself confessed. The resulting scandal led, in July 1977, to the removal from government of the three ministers (Henri Konan Bédié. Abdoulaye Sawadogo and Mohammed Diawara) who had been responsible for Ivorian economic policy for over ten years. After three years in political exile Konan Bédié, at the Seventh Congress of the PDCI-RDA (autumn 1980), returned in triumph to the political stage by securing the post of President of the National Assembly and number two in the regime.43 Mohammed Diawara went on to gain renewed notoreity by pocketing six billion CFA francs from the WAEC Solidarity Fund, and was arrested and imprisoned, in October 1984, by Captain Sankara, head of state of Burkina Faso and President in office of WAEC.44

When SODESUCRE came on stream in 1980 it had the six sugar complexes finally constructed 'with a total theoretical production capacity of 310,000 metric tons per annum (raw sugar equivalent)', and in 1983 actually produced 186,619 metric tons. Total Ivorian consumption in the same year was 102.000 metric tons.45 What was to be done with the surplus? The cost of building the sugar complexes had resulted in Ivorian sugar becoming uncompetitive on the world market (according to Houphouët-Boigny Camerounian sugar was 100 Francs CFA per kg, Ivorian was 250 Francs CFA). The traditional customers for Ivorian agricultural products (France and the European Community countries) whose businessmen had encouraged the Ivory Coast to engage in sugar production, and been entrusted with all the investments and thus been the chief beneficiaries of the operation, now refused to purchase Ivorian sugar because they themselves were beset by the burden of their own surplus production. 'The project of the century had become a nightmare!'46

To remedy this situation, the IMF recommended a reduction in the country's sugar production capacity by closing down two of the six complexes. The two complexes closed to be converted to food crops (rice, maize, groundnuts, yams) and cotton farms, and the factories on these two complexes to be dismantled to provide spare parts for the remaining four factories still in production.47

A development strategy based on exporting raw materials to the world market had thus demonstrated its limits. Significantly, it was the IMF that indicated producing food crops, intended principally for the Ivorian domestic market and possibly that of countries in the sub-region, as a possible way out.