Ghana’s new cocoa price leaves production targets in jeopardy, farmers say

By Jonas Nyabor
Posted on Wednesday, 12 October 2022 10:49

Cocoa beans at a warehouse in the village of Atroni, near Sunyani, Ghana April 11, 2019. REUTERS/Ange Aboa

An increase in government-set prices for cocoa production in Ghana isn’t enough to provide incentives to hit output targets or keep pace with what’s on offer in Côte d’Ivoire, say farmer representatives.

Cocoa farmers in Ghana will receive GH¢12,800 ($1,280) per ton, or GH¢800 per 64kg bag for the 2022/2023 production season which begins October 7. That compares with a price of about GH¢858 per bag in Côte d’Ivoire and demands in Ghana for GH¢1,500. The two countries together account for about two-thirds of global cocoa production.

Agriculture minister Owusu Afriyie Akoto announced the new price on October 5 after a week’s delay, due to negotiations with farmer groups. “The 21% rise in the producer price of cocoa is a testament to the government’s resolve to ensure farmers earn a decent income and make cocoa farming lucrative,” he said. “Government will continue to implement initiatives to build a robust, resilient and sustainable cocoa industry where cocoa farmers and their communities will thrive.”

Ghana, the world’s second-largest cocoa producer, aims to reach 850,000 tonnes of production this season. The sector is driven by some 800,000 smallholder farmers across all regions whose work rakes in about 23% of the country’s total export earnings.

The president of the National Cocoa Farmers Association, Stephenson Anane Boateng said the current price will not motivate farmers to help achieve the target. He says the government risks having farmers sell off their land to illegal miners or replace their cocoa with rubber.

  • “We are not comfortable with this price and we feel we are being cheated. The price of fertilizer and the depreciation of the cedi make this amount unacceptable especially if we are to compare it to the price offered in Côte d’Ivoire.”
  •  “This price will encourage farmers to go into illegal mining or cut down our cocoa and plant rubber instead because those ones give more profit.”

The depreciation of the cedi, and high costs for fertilizers and other farm inputs, have eroded cocoa farming profitability. Analysts predict that despite the hike in producer prices, production will fall if the cedi’s depreciation, illegal mining and fertilizer smuggling are not tamed.

  • Cocoa parastatal Cocobod recently said that farmers are finding it more profitable to give up their farms to illegal miners for upfront fees of between GH¢10,000 and GH¢25,000.

Bottom Line

The price increase leaves Ghana’s farmers with incentives to deploy their assets elsewhere.

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