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Ghana: Falling cocoa yields
With the return to stability in Côte d'Ivoire, cocoa smuggling is down but that's not the only reason Ghana's producing less
In the lead-up to national chocolate day – otherwise known as St. Valentine’s day – the number of traders hawking the Ghana-made Golden Tree chocolate for lovers and hopefuls on the streets of Accra increases. The same cannot be said for the amount of cocoa being produced by farmers, as figures have slid since the 2011/2012 season, when Ghana produced 860,000tn.
In 2014/2015 the country produced about 90,000tn less than that, according to data from Ecobank. Analysts attribute the decrease to a number of factors, including bad weather and smuggling.
Since the return of stability in Côte d’Ivoire after the 2010 conflict around the presidential election, the government has done much to fight against smuggling of Ivorian cocoa into Ghana, which is said to have been responsible for Ghana’s high production statistics. President Alassane Ouattara’s government wants to strengthen its finances by being sure that it can buy all of the cocoa grown by local farmers.
There is no longer the same buzz of activity during the cocoa season in the eastern Ivorian border regions of Abengourou, Agnibélékrou and Aboisso. Bilé Bilé, the leader of a farmers’ organisation who is managing the campaign to reinvigorate production in the region says: “Prices are very good. There is no longer a need to cross the border to go sell in Ghana, thanks to the restructuring of the cocoa sector.”
The Ivorian customs authorities estimate that between 100,000 and 150,000tn of cocoa are smuggled into Ghana each year. But a new customs unit now patrols the border to fight against these trade flows. A customs official in the border town of Niablé says there is no longer any smuggling to Ghana, “but it is still possible that Ghanaians are coming to sell their harvests in Côte d’Ivoire.”
There are many farms in no-man’s land between Ghana and Côte d’Ivoire. It is blurred.
Some Ghanaian officials see the smuggling issue from a different point of view. Isaac Osei, the former head of Ghana’s government-run cocoa body, Cocobod, says that smuggling is not really a problem. He explains: “Every farmer or every buyer is an economic animal. Sometimes when we look at smuggling, we look at it as if it is something bad. But it’s really a question of relative prices.”
He adds: “Also there are many farms in no-man’s land between Ghana and Côte d’Ivoire. It is blurred. People will naturally go to where they will find ready cash or more money. I don’t think one should spend resources trying to put barrier measures in place to stop people from doing that. They are only acting on their own economic instincts.”
The two countries also seem to be diverging in terms of their production levels. Côte d’Ivoire’s annual cocoa harvest has risen to about 1.8m tonnes since the 2013/2014 season. On the other hand, Ghana’s smaller and smaller harvests are due in part to the ageing of the country’s trees, which have not been regularly replaced. Farmers are getting older too – the United Nations Development Programme estimates that the average cocoa farmer is more than 50 years old – and few young people are getting involved in the sector.
Small is vulnerable
Ghana and Côte d’Ivoire have almost the same amount of cocoa- producing land – roughly 1.7m hectares – and former Cocobod director Osei attributes Ghana’s generally lower production figures to the scales of farming. Ghana’s farmers generally operate smallholder family farms, while Côte d’Ivoire has many large-scale commercial plantations. Osei says there are few Ghanaian farms in excess of 20 acres (8ha).
The difference in size means if a small-scale farm in Ghana is infected with a crop disease, the farmer is likely to lose out on the whole year’s production, whereas on the larger farms in Côte d’Ivoire the infection can be contained. At the same time sell dumps helps you survive
Osei argues, too, that Ghana would benefit greatly from an expansion of cocoa processing if it capitalised more on domestic demand. The Cocoa Processing Company – where Golden Tree products are produced – has been struggling with the cost of production, as it mainly exports its cocoa-derived products, and shut down temporarily in late January.
With Abidjan attracting investment in the form of a chocolate factory from French chocolatier Cémoi in May 2015, the competition has started in earnest between the neighbouring producers to seize a share of local and regional markets.