REPORT OF THE THIRD MEETING ON THE NATIONAL FOCAL POINT FOR ASEAN COCOA CLUB (ACC) ON ASEAN COOPERATION

AND JOINT APPROACHES IN AGRICULTURE AND FOREST PRODUCTS PROMOTION SCHEME 30 September - 01 October 1997, Belmont Marco Polo Hotel, Tawau, Sabah, Malaysia

INTRODUCTION 1. The Third Meeting of the ASEAN Cocoa Club on ASEAN Cooperation and Joint Approaches in Agriculture and Forest Products Promotion Scheme was held on 30 September - 01 October 1997 in Tawau, Sabah. The meeting was attended by delegates of the public and private sectors from Cambodia, Indonesia, Malaysia, Philippines and Singapore. The list of delegates appears as ANNEX 1.

2.

OPENING CEREMONY 3. The Chairman of the ASEAN Cocoa Club, Dr. Mohd. Musa Md. Jamil, welcomed all delegates to the meeting. He thanked the Organising Committee for arranging the Third ASEAN Cocoa Club Meeting and organising the Workshop on Primary Production Technology and Quality Management as well as various speakers for presenting reports in the meeting. In his speech, Dr. Musa has highlighted the following bullish news: The impact of El-Nino on world cocoa production; The complete liquidation of ICCO buffer stocks by the end of next year;

4.

A steady increase in global cocoa consumption of 3-5%;

Reports on significant increase of cocoa consumption in Russia, Eastern Europe, Japan and China.

5.

The full text of the opening and welcoming remarks appears as ANNEX 2.

ELECTION OF CHAIRMAN AND VICE-CHAIRMAN 6. The meeting unanimously elected Dr. Mohd. Musa Md. Jamil, Director-General of Malaysian Cocoa Board and Ms. Josephine V. Ramos, the Chief of Industrial Crops, National Agriculture and Fishery Council, Department of Agriculture, Philippines as Chairman and Vice-Chairman, respectively.

ADOPTION OF AGENDA 7. The meeting adopted the AGENDA which appears as ANNEX 3.

BUSINESS ARRANGEMENTS 8. The meeting was held in plenary.

PROGRESS REPORT ON ASEAN COCOA CLUB WORK PLAN I. 9. MALAYSIA Malaysia has reported the progress on the following :i) Activities and development assigned to Malaysia under the following programmes as appear in ANNEX 4:Joint cocoa products promotion Exchange information pertaining to the cocoa industry in ASEAN countries Tariff and non-tariff barriers Cooperation in upstream activities Report on establishing guidelines on regulatory measures on quality control as appears in ANNEX 5. Paper on Economics of fermented and unfermented beans which appears in ANNEX 6.

ii)

iii)

10.

The meeting agreed that there are opportunities in adding value to the smallholders beans in Indonesia. Three factors which hindered the implementation of upgrading of smallholders beans in Indonesia were identified:-

no appropriate price incentive received by the farmers for fermenting the beans; buying system problem whereby some farmers are paid in advance by the collectors; existing market demand for the unfermented beans.

11.

The meeting agreed that the ASEAN Cocoa Club will work together with Indonesia in formulating strategies or developing technologies to encourage the improvement of the smallholders beans by fermenting the beans. The issue of food safety was also brought up in the meeting. The meeting agreed that Mr. Yeong Chye from ADM Cocoa Pte. Ltd. Singapore and Malaysian Cocoa Board (MCB) will present a paper in the next meeting to inform ASEAN member countries on this issue. PHILIPPINES Philippines reported the progress on the task given to them. The plan to organise the first ASEAN Cocoa and Chocolate Show was not pushed due to the postponement of the holding of the World Cocoa Conference in Ujung Pandang in 1997. The meeting noted a discussion paper presented by Philippines on the ultimate objective and benefit of the ASEAN Cocoa Club activities as appears in ANNEX 7. Philippines has presented the status of their cocoa industry as appears in ANNEX 8 to provide better understanding on the current situation, issues and outline of the development plan to the ASEAN member countries. INDONESIA Indonesia presented a draft of cocoa contract that was discussed at the Meeting. The draft of the contract appears in ANNEX 9. The meeting agreed that ASEAN should have a common cocoa contract as an alternative to the other existing international cocoa contracts. The meeting agreed that two main points that need to be considered in the contract are the enforceability of the contract and the specifications of the quality of the beans. The meeting agreed that the ASEAN member countries will work together in drafting the contract. Each of the ASEAN member countries will consult and discuss with their respective industry. Their inputs will be submitted to Indonesia and the document will be finalised in the next meeting and forwarded to the ASEAN Ministerial level.

12.

II. 13.

14.

15

III. 16.

17.

18.

19.

20.

Indonesia presented a proposal on Cocoa Pod Borer Management by Using Biological Agents and Plant Resistant Materials as appears in ANNEX 10. The meeting recognised the importance of the project. However, there is a need to review the previous studies so as to be able to focus on specific areas that need to be tackled. The meeting agreed that Malaysian Cocoa Board will coordinate and assemble the group of researchers and assist Indonesia in implementing the project. The outcome of the strategy and design of the project will be presented at the next meeting.

21.

22.

FIELD VISITS 23. The delegates were taken to site visits at a rehabilitated smallholders farm at Jalan Ranggu and a fermentary at Jalan Apas in Tawau. The Club wished to extend its gratitude to Mrs. Napsiah bte Apai and Leong Yong Huat Fermentary for their hospitality.

DISCUSSION ON THE FUNDS FOR ASEAN COCOA CLUB ACTIVITIES 24. The meeting recognised the importance of the role of the ASEAN Cocoa Club in the development of the cocoa industry. However, the current activities of the ASEAN Cocoa Club especially in Malaysia are funded by the government. The meeting proposed that the individual focal point members consult their respective association and industry on possible funding for the ASEAN Cocoa Club activities.

25.

OTHER MATTERS 26. Pursuant to the decision of the Second Meeting of the ASEAN Cocoa Club in Jakarta, Malaysia presented a discussion paper on the issue of market access of ASEAN cocoa beans and cocoa products to the EU at the Fourth Meeting of the Joint Committee on ASEAN Cooperation and Joint Approaches in Agriculture and Forest Products Promotion Scheme in Pattaya, Thailand and the 19th Meeting of SOM-AMAF in Bangkok as appears in ANNEX 11. The SOM-AMAF of the 19th Meeting on 8-10 September 1997 in Bangkok agreed to request the Chairman of the SOM-AMAF to raise the issue of market access for cocoa beans and cocoa products to the EU, to the ASEAN-EU Joint Consultative and the ASEAN-EU Business Council Meetings. In this regard, Malaysia will prepare a letter to Thailand, Chairman of the SOM-AMAF to submit to the EU side. The matter will also be discussed at the 13th ASEANEC Joint Consultative Committee Meeting on 16-19 November 1997 in Bangkok. The meeting further noted that the issue of high import tariff on cocoa beans and cocoa products also exists in intra-ASEAN trade and agreed that the

27.

28.

matter be brought to the attention of the ASEAN Coordinating Committee on CEPT Scheme for AFTA by SOM-AMAF. 29. The ASEAN member countries are urged to inform the ACC Secretariat on non-tariff barriers faced by member countries on the export of cocoa beans and cocoa products. This is to enable the ASEAN Cocoa Club to strategise and formulate an action plan to overcome the problem as an ASEAN issue in order to have a stronger stand. The issue on high import tariff imposed by Peoples Republic of China and India on cocoa products was raised. The Meeting agreed to pursue the matter. A paper will be prepared by Malaysia for discussion in the next meeting. The meeting was informed that Malaysia will hold the Malaysian International Cocoa Fair (MICF) in Sunway Lagoon, Petaling Jaya, Selangor from 26-30 November 1998. The MICF comprises the events on Exposition, Conference and Dinner. The Conference will focus on the industry and downstream activities. Malaysia welcomes the participation from the ASEAN member countries. Member countries will be informed on the details and development of MICF98.

30.

31.

DATE AND VENUE OF THE NEXT MEETING 32. The meeting agreed that the Fourth Meeting of the ASEAN Cocoa Club on the ASEAN Cooperation and Joint Approaches in Agriculture and Forest Products Promotion Scheme will be held tentatively during February/March,1998 in Davao, Philippines. On behalf of the ASEAN Cocoa Club, the Chairman expressed his gratitude and thanks to Philippines for accepting the invitation to host the next meeting.

33.

ADOPTION OF THE REPORT 34. The meeting adopted the Report of the Third Meeting of the ASEAN Cocoa Club on the ASEAN Cooperation and Joint Approaches in Agriculture and Forest Products Promotion Scheme held in Tawau, Sabah, Malaysia on 30 September-01 October, 1997.

ACKNOWLEDGEMENT 35. The delegates from Cambodia, Indonesia, Malaysia, Philippines and Singapore expressed their sincere thanks and appreciation to the Government and People of Malaysia for their warm hospitality accorded to them and the excellent arrangements made for the meeting. The meeting was held in the traditional spirit of ASEAN cordiality and solidarity.

36.