Christophe Koreki, Managing Director, Palm-CI: Interview

Interview: Christophe Koreki

How is the development of the agriculture sector contributing to inclusive economic growth?

CHRISTOPHE KOREKI: Côte d’Ivoire’s agriculture sector remains the largest contributor to the country’s GDP. Agri-business players are present throughout the value chain, from nursery to finished goods, and have a widespread impact on people’s lives. Indeed, agricultural activities shape social models by driving employment and education. As sector players push for better practices, they contribute to the social progress made in Côte d’Ivoire’s rural areas. In this sense, the development of agriculture helps the population escape poverty, improve their working conditions and integrate sustainability concerns into their daily lives.

What is needed to bolster the global competitiveness of the local agriculture sector?

KOREKI: Since around 2010 the sector has been grappling with the fluctuation of commodity prices. For this reason, it needs to redefine its operations if it is to remain competitive on a global scale. Concretely, the agriculture sector has to increase its productivity levels and shift towards an industrial model. Around 60% of crops in Côte d’Ivoire are cultivated in village-run fields, in which productivity levels are distinctly lower than in industrial plantations. A village-run field of oil palms averages 6 tonnes per ha, whereas an industrial field averages 18 tonnes per ha – a difference that is a result of crop selection, fertilisation programmes and agricultural counsellors. If the country’s agriculture sector was to increase the efficiency of its farming activities, the country would reduce its exposure to the risk of falling commodity prices. Indeed, optimised production would be sufficient to offset the losses associated with international price fluctuations.

It seems likely the sector will eventually start looking into higher-added-value activities such as local processing. However, many aspects of Côte d’Ivoire’s economic situation are affecting the attractiveness of such activities. First, the market for local crop processing is saturated and will remain so until farmers increase the productivity of their crops. Second, the need to import materials and machines at a high rate affects overall operational costs. Lastly, the country’s fiscal framework is relatively onerous, which affects the competitiveness of processed products.

How would the creation of a regulatory rubber-palm oil council impact the sector?

KOREKI: The rubber and palm oil industries would benefit from a dedicated body responsible for regulating, controlling and monitoring their activities, similar to the Coffee-Cocoa Council or the Cotton-Cashew Council. The sector is currently beset by a weak investment regulation framework and a poorly updated land register. As a result, production activities can be established anywhere, regardless of the zone’s potential and existing infrastructure, and the law does not require investors to take part in field exploitation. This poses an unfair threat to players who have already established their presence and have historically invested in crop production as well as palm oil production. Ideally, the creation of a rubber-palm oil council should facilitate the implementation and enforcement of an investment framework which protects investors in the agriculture sector and rewards those creating value for stakeholders from the beginning of the chain. However, given that the palm oil industry in Côte d’Ivoire is fragmented, with most of the land farmed by villagers who work independently of one another, the creation of a council should favour the mutualisation of resources, protection and knowledge transfer among farmers. The sector is also confronted with financing issues due to the difficulties of providing collateral for guarantees. The rubber-palm oil council would be expected to address this question as well as issues related to the property law as it affects the agriculture sector, and implement policies that facilitate credit access for farmers.