JOURNEY TOWARDS SUSTAINABILITY

1. JOURNEY TOWARDS SUSTAINABILITY THE STORY OF THE MONTSERRAT COCOA FARMERS COOPERATIVE SOCIETY LTD.

2. SHORT HISTORY Cocoa in the Doldrums Sensitization Meetings re RSCE2 Meeting of farmers: February 2009 RSCE 2 – March 2009 Formation of Association Buying Agency and Fermentary licence Co-operative status October 2010

3. GOALS AND OBJECTIVES Reduce cost of getting the crop to the exporter; Improve the bargaining power of the farmer; Pool farmers’ resources in terms of the commodity so as to get a better market price; Assist farmers in producing better quality cocoa through education and research; Reduce cost of production by purchasing in bulk equipment and materials (e.g. fertilizers); Acquire better representation for the farmer.   We do this by pooling our “wet” cocoa and fermenting/drying in one place. Individual farmers eliminate this cost, but of course share in the costs incurred by the Co-Op, but because of the effect of scale this is much smaller than if done by the farmer himself. When a farmer decides to sell “wet” to a Buying Agent this does not apply, but there are other factors in the equation as discussed following. As a large organization of more than 30 members we can speak with much more authority than as individuals and will likely be heard by the authorities and other stakeholders in the Industry. There are several factors here --- a) Currently farmers get TT$ 18.00/kg – a price fixed by CCIB. At today’s exchange rate this is about US$ 2.80/kg or 2800/tonne. b) The CCIB deems the yield as 30% dry from wet so the farmer gets TT$5.60 when sold wet to the buying agent. c) Actually the yield we get is about 37% so the Co-Op gets another TT$1.05 an increase of 20% which otherwise would have gone to the Buying Agent. d) A fourth factor is that as a Fermentry Operator we get a Commission of TT$ 2.50 per kg of dry cocoa produced from wet. This is another TT$ 0.90/kg for wet cocoa. e) the bottom line is that the Co-Op and its members get a gross revenue of about TT$ 7.50/kg wet. Of course not all this goes to the members as there are expenses of rent, labour, transport, etc, etc. but the improvement is very signifigant. 4. This is pretty obvious . We do this through the CCIB extension services, the Ministry’s Cocoa rescearch Unit and the UWI research Unit, as well as from commercial suppliers of goods and services. We do this by alliances with suppliers, which would not be possible for individual farmers. This is a very general one, but includes, e.g., lobbying for recognition of the “real” conversation ratio and an increase of the FOB price of the comodity.We do this by pooling our “wet” cocoa and fermenting/drying in one place. Individual farmers eliminate this cost, but of course share in the costs incurred by the Co-Op, but because of the effect of scale this is much smaller than if done by the farmer himself. When a farmer decides to sell “wet” to a Buying Agent this does not apply, but there are other factors in the equation as discussed following. As a large organization of more than 30 members we can speak with much more authority than as individuals and will likely be heard by the authorities and other stakeholders in the Industry. There are several factors here --- a) Currently farmers get TT$ 18.00/kg – a price fixed by CCIB. At today’s exchange rate this is about US$ 2.80/kg or 2800/tonne. b) The CCIB deems the yield as 30% dry from wet so the farmer gets TT$5.60 when sold wet to the buying agent. c) Actually the yield we get is about 37% so the Co-Op gets another TT$1.05 an increase of 20% which otherwise would have gone to the Buying Agent. d) A fourth factor is that as a Fermentry Operator we get a Commission of TT$ 2.50 per kg of dry cocoa produced from wet. This is another TT$ 0.90/kg for wet cocoa. e) the bottom line is that the Co-Op and its members get a gross revenue of about TT$ 7.50/kg wet. Of course not all this goes to the members as there are expenses of rent, labour, transport, etc, etc. but the improvement is very signifigant. 4. This is pretty obvious . We do this through the CCIB extension services, the Ministry’s Cocoa rescearch Unit and the UWI research Unit, as well as from commercial suppliers of goods and services. We do this by alliances with suppliers, which would not be possible for individual farmers. This is a very general one, but includes, e.g., lobbying for recognition of the “real” conversation ratio and an increase of the FOB price of the comodity.

4. THE WAY FORWARD Increase production Nurture relationships Capture direct markets Regain status Produce chocolates locally in partnership with local and international chocolatiers This arises from education on culture practices such as planting, early care, fertilization, insecticides, pruning, proper care in extracting the beans from the pods, etc. From a situation where individual farmers did not utilize the resources of the CCIB (and often were quite antagonistic to that organization) we are now in a situation where our members recognize the role of CCIB and other related agencies (Govt Research unit, UWI research unit) and we have established a very good working relationship with these bodies. They understand our concerns and we recognise the constraints under which they may have to operate. One of our longer term goals is to be a direct exporter and in our short time in existence we have had many visits from choclaters in Europe and North America and are in close relationship with them. We have been well appraised of the initiative of the Ministry to work in collaboration with a single European Choclater and await further delopments on this initiative, while not neglecting our own contacts with the manufacturers of Chocolates. The Montserrat area stretching in the north from Toutuga and through the Central Range to the larger area of Gran Couva has had a reputation for producing the best quality of Cocoa in Trinidad for over 100 years and we intend to be sure that this status is regained. We also are not neglecting the opportunity to manufacture finished Chocolates locally, and recognise that this has already started in a small way. We see opportunities to joint venture with both Local and Foreign producers. This arises from education on culture practices such as planting, early care, fertilization, insecticides, pruning, proper care in extracting the beans from the pods, etc. From a situation where individual farmers did not utilize the resources of the CCIB (and often were quite antagonistic to that organization) we are now in a situation where our members recognize the role of CCIB and other related agencies (Govt Research unit, UWI research unit) and we have established a very good working relationship with these bodies. They understand our concerns and we recognise the constraints under which they may have to operate. One of our longer term goals is to be a direct exporter and in our short time in existence we have had many visits from choclaters in Europe and North America and are in close relationship with them. We have been well appraised of the initiative of the Ministry to work in collaboration with a single European Choclater and await further delopments on this initiative, while not neglecting our own contacts with the manufacturers of Chocolates. The Montserrat area stretching in the north from Toutuga and through the Central Range to the larger area of Gran Couva has had a reputation for producing the best quality of Cocoa in Trinidad for over 100 years and we intend to be sure that this status is regained. We also are not neglecting the opportunity to manufacture finished Chocolates locally, and recognise that this has already started in a small way. We see opportunities to joint venture with both Local and Foreign producers.

5. THANK YOU.