The Ghana Civil-Society Cocoa Platform (GCCP) celebrates the government’s efforts in ensuring cocoa farmers earn a decent income. We have followed various steps taken by the government and its Ivorian counterpart resulting in a massive change in the price of cocoa beans, following the introduction of a floor price and a Living Income Differential (LID) to be paid by chocolate and processing companies.
The recent announcement of GHS 660 payment per bag of 64kilogram of cocoa, which translates into GHS10,560 per a tonne of 16 bags for the 2020/21 crop year, beginning 1st October 2020, is a great milestone, and a show of COCOBOD’s commitment to awarding cocoa farmers the full LID of four hundred United States dollars per metric ton (US$400/MT).
The GCCP on September 24, 2020, issued a statement indicating our expectation of an increment in the farm gate price which was scheduled to be announced on 1st October 2020. Though not what we requested for, the recent announcement of GHS 660 per bag of 64kilogram (about 28% increase over the price obtained in the just ended 2019/2020 crop year) of cocoa is not far from our expectation.
Based on the working assumption of the Producer Price Review Committee (PPRC) of COCOBOD, which aims at ensuring that farm gate price is pegged at a minimum of 70% of the net Free on Board (FoB) price of cocoa beans, GCCP was of the opinion that farmers in Ghana receive a minimum of GHS672.6 per bag (64kg) of cocoa beans. This figure was arrived at using the lowest projected values available, including 80% of the $400 per tonne LID announced in July 2019.
The current price of GHS660 per bag of cocoa beans is commendable, noting that the Ghana Cocoa Board together with its pricing committee (Producer Price Review Committee - PPRC) appears to have offered fully the $400 LID to farmers as agreed on with chocolate and processing companies. This is remarkable as it will cushion farmers in the midst of the Coronavirus pandemic. However, this also raises questions about what percentage of FoB price of cocoa was offered to farmers and at what exchange rate?
By our internal projections, it does appear farmers received only 68% of FoB price at an exchange rate of $1: GH5.5, which falls below the PPRC threshold of 70% and far below the current Bank of Ghana year on the year exchange rate of GH5.7. This also raises another transparency issue of publishing the indicative figures that go into deciding the price of cocoa annually.
As we commend the COCOBOD for this milestone, we also wish to point out the following:
The COCOBOD must strengthen its surveillance in order to curtail all factors that could hinder the farmer appreciating fully the LID. We specifically suggest that intensive monitoring at various depots and cocoa-sheds are undertaken, as well as, sensitization of farmers on how to escape weighing scale adjustment fraud by purchasing clerks (PCs) as reported in a 2019 SEND GHANA study.
It is of great importance that the COCOBOD sanctions identified PCs who were caught in the Joy News “Missing Kilos” documentary in August this year as a deterrent to others, while we await the implementation of electronic weighing scales next year.
The COCOBOD must ensure that various Productivity Enhancement Programmes benefit all farmers. Inputs distribution program, including fertilizer and mass spraying, must among others be equitably distributed and thus particularly ensuring that women farmers equally benefit since 2019 SEND GHANA study also revealed the increased likelihood of exclusion of female farmers from both the fertilizer input and the mass spraying program.
The COCOBOD must also ensure that farmers whose over-aged and diseased farms are being rehabilitated are compensated appropriately so as to motivate others from participating in the program
We strongly believe that when all these factors are properly addressed and implemented, it will to a greater extent improve farmer’s income and livelihood as anticipated by this price increment.
About the Ghana Civil-Society Cocoa Platform (GCCP):
The Ghana Civil-society Cocoa Platform (GCCP) is an independent campaign and advocacy platform for civil society actors in the cocoa sector – comprising of Civil Society Organizations, Non-governmental Organizations, Community-based Organizations, Farmer-based Organizations, Farmer Associations, Media, and interested individuals. The main aim of the platform is to advocate and influence cocoa sector policies and programs. GCCP is currently being hosted by SEND Ghana, with membership across the country, especially in cocoa-growing areas.