BRAZIL GROWERS JOIN GOVERNMENT IN OPPOSING COCOA GROUP QUOTAS

BRAZIL GROWERS JOIN GOVERNMENT IN OPPOSING COCOA GROUP QUOTAS

Although not unanimous, Brazilian cocoa growers are supporting the government's official position against export quotas under the International Cocoa Organization.

An official source close to the ICCO negotiations said Brazil's government was against any sort of price management system, be it quotas or retention. "We are against quotas as a matter of principle," the source said. "The government doesn't want to put public money into managing quotas when we can hardly cope with basic needs like health and education." The source spoke on condition of anonymity.Brazil was looking for a formula to continue international cooperation without resorting to economic clauses such as export quotas, he said.

"The European Community has suggested some sort of withholding scheme - which doesn't seem very fair, since all the stocks are held in Europe, in the hands of the consumer countries," he said.

"Brazil wants to participate in all dialogues, but we want a long- lasting solution, not export quotas which have merely a short-term effect on prices," he said. Current ICCO stocks are some 250,000 metric tons.

The ICCO met in mid-February to discuss possible mechanisms to boost world cocoa prices. The large majority of delegates to the ICCO meeting recommended a new International Cocoa Agreement formed with economic clauses to be determined through negotiation.

Most delegates agreed a short-term mechanism was needed for temporary intervention in the market, but there was no agreement on the form such a measure should take.

Another ICCO meeting to discuss price-management mechanisms has been scheduled for April 21 through May 1 in Geneva, under the auspices of the United Nations Council on Trade and Development.

Helio Bandeira Neves, president of the National Cocoa Producers Council, represents one of the many private-sector groups opposed to price-management mechanisms.

"What we need instead of quotas are technical-assistance agreements with consumer countries to develop the industrial applications of cocoa and to discourage indiscriminate planting," Mr. Neves said.

By diversifying the end-products of cocoa, producers would no longer be solely dependent on half-a-dozen exporters and the chocolate industry, he said.

Mr. Neves said quota systems were in opposition to the philosophy of the General Agreement on Tariffs and Trade.

"Besides, quotas are useless. They amount to the same thing as the ICCO buffer stock, which is nothing more than centralized quotas. Theoretically, prices some day will rise on short supplies, the ICCO will release its buffer stock, and prices will plummet. I see no point to these instruments, no matter what the commodity," he said.

Yet some producers said they feel the need of a price management system of some kind, even if it is not a classic export-quota scheme.

Nilo Pedreira, vice-president for international affairs of the Brazilian Cocoa Growers' Association, said "some sort of International Cocoa Agreement that serves to raise prices" is needed on the international level.