Mon, 11 Sep 2023 Agriculture

Akufo-Addo announces Gh¢1,308 as price per bag of cocoa

By  Rex Mainoo Yeboah, ISD || contributor
Akufo-Addo announces Gh1,308 as price per bag of cocoa

The government has announced a new cocoa producer price of GHc1,308, the highest in the West African region, and has assured the country’s farmers that it will continue to honour them with good prices.

Speaking at an event in Tepa in the Ashanti Region, President Akufo-Addo said until recently, international prices of cocoa had remained very low and made worse by COVID-19.

However, the President indicated that despite that, COCOBOD and the government had been making the very hard decision to increase the producer price of cocoa.

Cocoa prices have increased from GH¢7,600 per tonne in 2016, to GH¢12,800 per tonne in 2022, a significant increase of 68%. “This has had an adverse impact on COCOBOD’s financial performance.”

President Akufo-Addo said the sustainability of the cocoa industry hinged on a well-remunerated producer, who would invest in the business only when the government paid the appropriate price.

The President stated, that the government has kept its promise to cocoa farmers, hence the increase in producer price.

He said the government has “increased cocoa prices from GH¢12,800 per ton to GH¢20,943 per ton, or GH¢1,308 per bag. That price is 70.5 of the Gross FoB price, and is equivalent to $1,821 per ton.”

That, the President indicated, is the highest price to be paid to cocoa farmers across West Africa in 50 years, assuring that with the predicted stable prices above the US$2,600 threshold, the government would continue to honour the country’s farmers with good prices in the years ahead.

The President described the cocoa landscape as witnessing an unprecedented transformation under his government, adding: “The productivity enhancement programmes being implemented by COCOBOD are having a positive impact on productivity, incomes and climate resilience.”

COCOBOD, President Akufo-Addo indicated, would continue to undertake the rehabilitation of diseased farms free of charge through the programme.

The programme, he explained, entailed a “one-off payment of compensation to both the land owner and the tenant farmer and involves cutting, treatment and replanting of the affected farm, and the maintenance of the farm for two years before it is handed over to the farmer.”

In addition to the payment of compensation of GH¢1,000 per hectare, paid separately to both land owner and tenant, COCOBOD bears the entire cost of the cutting, treating, replanting and maintenance for two years before it is handed over to the farmer.

Compensation paid to both landlords and farmers stands at GH¢112,686,040 as of September 2022.

COCOBOD had also rolled out a Contributory Scheme, under the new Three-Tier Pension Scheme for cocoa farmers and would continue to make way for contributions from farmers and COCOBOD in the coming season.

COCOBOD, the President stated, is expected to contribute some GH¢74.5million to the fund this year, adding: “The scheme will enable cocoa farmers also save towards their retirement.”

President Akufo-Addo said this is the first successful attempt to give effect to section 26(1) of the Ghana Cocoa Board Act, 1984, PNDCL 84, which provides for the setting up of the Scheme.

“This has been made possible because of the implementation of the cocoa management system, which has provided the needed data and digital foundation for the Scheme to be successful.”

Co-operation between Ghana and Cote d’Ivoire, in the cocoa industry, the President noted, had already yielded good results for the industry, following the adoption and implementation of the Living Income Differential (LID).

The LID is an additional amount of US$400 per ton on the price of cocoa, paid on every ton of cocoa purchased from Ghana and Cote d’Ivoire. The LID is paid fully to the farmers, as a cushion to adverse effects of low international prices of cocoa.

The LID has increased the average farmer’s income by $700 per ton. It is the first successful attempt by producer countries to influence the incomes of cocoa farmers through an international pricing mechanism,” he added.

The government, the President emphasized, would soon roll out a digitisation programme to digitise all operations of the sector, and “enhance traceability and efficient management of the domestic supply chain.

President Akufo-Addo said the “value addition in the cocoa industry had increased significantly, from thirty per cent (30%) of annual output in 2016 to 48% in 2022. “The target of processing 50% of the production locally is within immediate reach.”

He emphasised that the promotion of domestic consumption is also beginning to yield results.

Domestic enterprises, according to the President, have emerged strongly under the 1D1F initiative for the processing and manufacturing of various cocoa-based products across the Districts.

He said COCOBOD had taken a giant step to support small-scale and artisanal chocolate manufacturing with business-friendly guidelines that provide access to premium Ghanaian beans, even at the district level.”

Through these innovations, President Akufo-Addo disclosed that some 130,000 jobs had been created, adding that, the government, through COCOBOD, would continue to adopt innovations aimed at improving the welfare of the Ghanaian farmer through the implementation of productivity enhancement programmes and remunerative producer pricing.