GCCP Pressures Cocobod to Review Cocoa Forward Sales Policy

By Nana Yaw Reuben Jr. On Apr 4, 2024

The Ghana Civil-society Cocoa Platform (GCCP) has called on Ghana Cocoa Board (COCOBOD) to review its forward sales cocoa marketing system amidst soaring market prices.

The forward sales system refers to contractual agreements made between cocoa producers and buyers for the exchange of a specified quantity of cocoa beans or products at a predetermined price at a future date.

These contracts are typically used as a risk management and price stabilisation tool by both cocoa producers and buyers in the cocoa industry.

For years, this sales system has remained the preferred option for Ghana’s Cocoa Marketing Company, a subsidiary of the regulator, COCOBOD.

However, the recent price rally of cocoa beans on the world market, acing the $10,000 per tonne mark for the first time in history, has seen those producers selling on the spot market cash in.

However, some Ghanaian cocoa farmers and civil society actors have expressed disquiet about the relevance of COCOBOD’s forward sales policy in the current context of the cocoa industry.

A National Coordinator for the Ghana Civil-society Cocoa Platform (GCCP), Nana Kwasi Barning Ackah, said, “We believe the forward sales strategy is not helping cocoa farmers in Ghana negotiate for the current world market price, which is limiting Ghana’s ability to take advantage of favourable market conditions.”

The group, which comprises cocoa farmer cooperatives, cocoa sector NGOs, and media organisations, maintained that the spot market currently offers the best value to producers.

According to GCCP, the spot market would guarantee farmers a more rewarding cocoa farmgate price and a living income.

Ackah was addressing a day’s meeting to review and revise the platform’s work plan for the year 2024 and also finalise the rollout plan for the GCCP and GIZ Project.

The National Coordinator for the GCCP, Nana Kwasi Barning Ackah, reiterated that cocoa farmers in Ghana live in extreme poverty with no alternative income-generating activities beyond cocoa farming.

He said it had become necessary for the civil society platform to weigh in on the matter concerning farmers’ livelihoods to positively influence Ghana’s cocoa sector policies.

The GCCP said the rate at which illegal gold mining (galamsey) is destroying arable farmlands and cocoa plantations is worrying, especially in cocoa-growing regions such as the Western North, Western South, Eastern, and Ashanti Regions of Ghana.

He explained that Ghana has, for three consecutive crop seasons, failed to meet its average annual cocoa production target of 800,000 metric tonnes, thereby adversely impacting national revenue and local grinding and export.

“The prices are still too low; companies have publicly stated support for the LID, others have tried to reject or circumvent the relevant markets to avoid paying the premiums, while others have tried to negotiate with governments to bring the origin differential to below zero” he added.

A member of the GCCP and Council Chairman of Cocoa Abrabopa Association, Ismaila Pomasi, said it’s about time companies took a critical look at the bad cocoa buying prices that have subjected cocoa farmers in Ghana to poor living conditions.

According to him, cocoa buyers are equally violating the rights of cocoa farmers by buying cocoa at very poor prices, which he thinks must be treated as a human rights issue.

“I believe that farmers should not just be living; we should be thriving. That should be the goal, and that is why we prioritise two things: paying better prices for our cocoa and the freedom to organise. We are encouraging our colleagues to join us so we have one independent voice.

Pomasi also argued that inconsistencies in policy implementation at the COCOBOD and governmental levels are affecting our operations

“At one moment, they will supply free fertiliser to cocoa farmers; the next moment, something else is introduced,” he added.

The Steering Committee meeting brought together officials from OXFAM, INKOTA, The Ghana Agricultural & Rural Development Journalists Association (GARDJA), SEND Ghana, EcoCare Ghana, Solidaridad, The World Cocoa Farmers Organisation (WCFO), Cocoa Abrabopa Association, Cocoa Mmaa, SOCODEVI, Tropenbos Ghana and Voice Network.