Cocoa farmers in Ghana are asking the government for a remarkable increase in the farmgate price of their produce to tackle poverty, cross-border smuggling and illegal mining on cocoa farms.
Addressing the media in the Ghanaian capital, Accra, under the umbrella of the Ghana Civil-society Cocoa Platform (GCCP), the farmers made a strong case for a 72.5% raise in the farmgate price to GHS1380 per bag.
Currently, the government through its cocoa sector regulator, Ghana Cocoa Board (Cocobod), pays GHS800 for a 64kg bag of cocoa beans.
“It is our firm opinion that farmers in Ghana should be receiving a minimum of GHS22,080 per ton, which is equivalent to GHS1,380 per bag of cocoa beans,” said Leticia Yankey, a cocoa farmer.
Yankee, who is also a cocoa cooperative leader, explained that the recommended price is, among other factors, based on the working assumption of the government’s Producer Price Review Committee (PPRC) which usually pegs the farmgate price at a minimum of 70% of the net Free on Board (FoB) price of cocoa beans.
She further indicated that the GCCP recommended farmgate price for the upcoming 2023/24 crop season was projected also on the assumption that Cocobod will pay the full value of the $400-per-tonne Living Income Differential (LID).
The cocoa farmers and their partner civil society actors said they also took into consideration the prevailing international market dynamics, which have led to over 35% increment in the International Cocoa Organization (ICCO) world cocoa market price, as well as the challenges posed by the unstable Ghana cedi, the high rate of inflation, exorbitant cost of labour and most importantly the need for farmers to be paid adequate and commensurate prices for their efforts.
Ghana Civil-society Cocoa Platform (GCCP), an independent campaign and advocacy platform in the cocoa sector, again pointed out the disturbing involvement of farmers in cross-border cocoa smuggling as a result of the low farmgate price.
The group believed that the incessant incidents of cocoa smuggling this year contributed largely to Ghana’s inability to achieve production targets in recent times.
According to them, cocoa farmers have become informed and conversant with the dynamics of the international cocoa industry and cocoa market price trends, especially in the West African cocoa-producing region.
They argued that recent information suggests that the international cocoa market price has started appreciating, “and our neighbours that use the liberalized cocoa marketing approach increased their farmgate prices.”
Records indicate that at some point this year a bag of cocoa was selling in Togo at the equivalent of GHS1,500 (almost twice Ghana’s farmgate price) which fuelled the nefarious activities of cocoa smuggling, as some farmers were offered up to 30-40% more of the prevailing market price in Ghana by smugglers.
The cocoa farmers claimed that the unavailability of funds to purchase cocoa, at some point during the season, led to some farmers not being paid on the spot when they delivered their beans at the cocoa shed.
They said this situation also contributed to farmers selling their produce to smugglers who transport them to neighbouring countries.
GCCP also reflected on the threat of mining activities in cocoa communities, as some frustrated cocoa farmers and land owners sell off farmlands to miners for hefty cash rewards.
“They do not feel their efforts and toils are properly and fairly being compensated hence the alternative is to cash in and move out of the cocoa space,” argued Leticia Yankee.
To avert the challenges faced in the cocoa sector, the cocoa civil group urged the Ghana Cocoa Board to make the sector competitive by increasing the farm gate price to levels that are commensurate with the farmers’ cost of production.
In an unprecedented twist of events, Ghana will for the first time announce a new farmgate price for cocoa on Friday 8 September 2023, one month ahead of the annual Cocoa Day celebration on 1 October.
Ahead of the announcement, Bloomberg on Wednesday reported that its sources within Cocobod have hinted at an almost 63% hike in Ghana’ farmgate to GHS20,800 per ton or GHS1300 per bag.
Meanwhile, President Nana Akufo-Addo is slated to address an industry durbar to mark the official opening of the 2023/24 crop season on Saturday, 9th September 2023 at Tepa, a town in the country’s leading cocoa-producing Ashanti Region.