Insight - Gold rush threatens West Africa's cocoa future
By Joe Bavier and Loucoumane Coulibaly
YOHO, Ivory Coast Fri Apr 11, 2014 6:37am BST
(Reuters) - A month ago, Bouafu Kouassi dug a neat circular hole in the middle of his one-hectare cocoa plantation in western Ivory Coast, and, sifting through the gravel on his shovel, found the unmistakeable traces of gold dust.
With luck, it could transform his life, but it could just destroy his farm. And as the story repeats across the cocoa heartland of the world's top producer and neighbouring Ghana, the second-largest, it could do lasting damage to the industry.
Today, nearly three dozen vertical shafts plunge down into the soil beneath Kouassi's cocoa trees, branching out into a web of underground tunnels 10 metres below the surface.
The 35-year-old, who once struggled to pay school fees for his five children, has in a matter of weeks pocketed as much as he could hope to earn in five years growing cocoa.
"As long as there's gold here, we'll be working," he says, with the giddy smile of a man who thinks he's won the lottery.
With high prices for the precious metal fuelling a gold rush in Ivory Coast and Ghana, diggers are scurrying to cash in.
But the drain on the labour market and the harm done to plantations could endanger cocoa production in the two nations, which account for 60 percent of global supply.
Kouassi says he is being careful, and his plantation will survive once the gold is exhausted, probably in just a few months, but a stark reminder of the risks lies just a short walk away.
Down a dirt track lies a scarred landscape of pits and mounds of brown-red dirt. There are no trees left here to block the sun that beats down on diggers balancing sacks of dirt on their heads and women wading waist-deep in muddy pools to wash gravel, their infant children tied to their backs.
After two months, gold output from the site is falling off, and many of the 300 shafts on the two-hectare plot have been abandoned as miners move on, leaving desolation in their wake. In some areas, diggers have begun using toxic cyanide and mercury to extract gold from the ore they mine.
Severin Konan, a cocoa farmer who manages the land for his family, is unapologetic. "You can make 100 million CFA francs (126,401 pounds). And with that you sort yourself out. You head to the city. You don't need your fields any more."
PRISONERS OF POVERTY
In Ivory Coast, where artisanal mining has historically been concentrated in the arid north, diggers are moving into cocoa-growing areas around Issia, Duekoue, Zoukougbeu, Bouafle and Daloa - the latter producing a quarter of national cocoa output.
In Ghana, Africa's second-largest gold producer, Wassa-Akropong in the west and the central region of Dunkwa have been prime targets for miners. Assin Fosu and adjoining districts have also been hit hard.
"It's not just ravaging cocoa crops in those areas but it makes major cocoa districts in the Eastern and Ashanti regions very vulnerable," Emmanuel Opoku, deputy director of research at Ghana's cocoa marketing board, Cocobod, told Reuters. "The future of our crop is threatened if this continues."
He said he didn't have figures to quantify the threat, but the regions at risk are in Ghana's top cocoa-producing belt.
Despite its global dominance, the long-term prospects for West Africa's cocoa sector are surprisingly bleak. Plantations are ageing, and so are cocoa farmers. The average age of growers in Ivory Coast is around 50, just four years shy of the average life expectancy of an Ivorian man.
While the country harvested a record crop of 1.5 million tonnes of cocoa two seasons ago, the government is now expelling farmers from plantations illegally established during a decade-long political crisis that ended in 2011.
Ghana, meanwhile, is phasing out subsidies for fertiliser and pesticide treatments, putting an end to initiatives that many credit for a rapid rise in production over the past decade.
But the most serious threat to the sector's future is poverty. The average cocoa grower in Ivory Coast farms three hectares, yielding 450 kilograms per hectare. At the government-regulated farmgate price that yields just $2,000 (1,192.46 pounds) per year. After labourers are paid and fertiliser purchased, he will be lucky to keep a third of that.
In Ghana, where the government set a farm price on parity with Ivory Coast in October, growers' earnings are being eroded by inflation and the country's plunging cedi currency. At the bottom of the cocoa hierarchy, labourers - usually young men with no land of their own - typically earn just $500 per season.
With cocoa promising a life of back-breaking toil and grinding rural poverty, many are looking for a way out.
NO LONGER THINKING OF COCOA
Five years ago, as world spot gold prices began an unprecedented rally to around $1,900 an ounce in late 2011, poor cocoa farmers woke up to the possibility that salvation lay beneath their feet.
While prices are now back around $1,300/oz, that is still three times higher than they were a decade ago.
Eight months ago, a local farmer discovered a gold vein near the town of Zahibo, west of Ivory Coast's main cocoa hub of Daloa. Within weeks, diggers from all over the country and neighbouring Burkina Faso began flooding in by the busload.
Now, often prospecting at night and without the permission of landowners, their open-trench mines rip giant gashes through plantations. The anarchy at the pits, where disputes over stakes have sparked deadly confrontations, recently pushed community leaders to call in the army.
While damage to plantations and insecurity are major worries, Michel Gueya, the head of Zahibo's local cooperative, said the main problem for cocoa farmers was a lack of labour.
"We're no longer even thinking of doing coffee or cocoa," he said. "This year, there's been no production in our zone."
Gueya said every two weeks a buyer from Burkina Faso named Karim arrives in Zahibo and buys its gold production - between 30 and 35 kgs - before flying to Italy to offload it.
At a conservative price of 7,000 CFA francs per gram, that translates into a bi-monthly injection of $500,000 into a local economy where owning a motorbike once marked you as well-off.
Gueya knows all this because, in addition to heading Zahibo's cocoa co-op, he has become its main gold middleman.
At Kouassi's plantation-turned-goldmine, Gervais Alledji, a 35-year-old digger, is waiting to get paid. Under an improvised shelter made of black plastic tarpaulin, an on-site buyer uses a hand scale to weigh a tiny pile of shiny yellow dust.
"Day before yesterday, we had nine grams at 99,750 CFA francs and yesterday seven grams at 77,500 francs," says Alledji, who works a mine with two partners. "Today we got three grams."
Standing off to the side, Francois M'Bra, a cocoa farmer and president of a growers' cooperative in the nearby town of Bouafle, shakes his head. All season he's searched in vain for workers to harvest the pods on his plantation and dry the beans.
"This guy just made 30,000 (francs) in a day. If you go and do cocoa, you'll earn 240,000 for a year. Why would you do that?" he says. "If it continues on this scale, in five years you won't be hearing much about cocoa from this zone.
