A Bold Step Forward for Cocoa Farmers — But Where is the Living Income Differential in the 2025/26 cocoa producer price?

This week, the Government of Ghana announced the new cocoa producer price for the 2025/26 crop season, which is both historic and praiseworthy. Raising the producer price from US$3,100 to US$5,040 per tonne — a 62.58% increase — sends a strong signal that the administration is serious about fulfilling its promise to prioritize the welfare of cocoa farmers. For the first time in years, farmers will be receiving 70% of the gross Free-On-Board (FOB) price, aligning with international best practice and longstanding farmer demands. This is a much-needed shift from the previous government's 63.9% and a step in the right direction.

Coupled with the reintroduction of the free fertiliser programme and the stabilisation of producer prices against Cedi fluctuations earlier this year, these moves collectively demonstrate a commendable effort to reduce farmer vulnerability to both global market shocks and domestic macroeconomic instability. In a sector long plagued by low incomes and declining productivity, this bold intervention should be applauded.

However, while the new pricing formula is an improvement, it raises an uncomfortable and urgent question: Where is the Living Income Differential (LID)?

In 2019, Ghana and Côte d’Ivoire — who together supply over 60% of the world’s cocoa — jointly introduced the LID, a $400 per tonne premium added to the market price of cocoa. The aim was clear: to help close the living income gap and lift farmers out of poverty. The LID was heralded as a game-changer in the fight for fairer compensation.

Yet, in this new pricing announcement, the LID is conspicuously absent.

This omission is not a minor oversight. It reflects a deeper issue of transparency and policy consistency. If Ghana is still collecting the LID from international buyers — as is assumed — why is this not explicitly reflected in the pricing formula? Was the LID factored into the US$7,200 FOB benchmark? If yes, then the 70% producer share should include the LID. If not, what is the status of the LID funds? Are they being redirected, and if so, toward what? Cocoa farmers deserve clarity.

Moreover, global stakeholders are watching. Ghana’s continued credibility in pushing for living incomes and sustainability depends not only on setting a good price, but on maintaining transparent, traceable, and fair pricing structures. The LID was meant to exist in addition to the market-derived FOB value — not to be absorbed into it silently.

By failing to mention the LID, the government risks undermining the spirit of its own reforms. Cocoa farmers have long demanded transparency — not just higher prices, but an open accounting of how those prices are derived. They want to see that every dollar earned from their sweat — including LID and other premiums — is making its way back into their pockets or communities.

To be clear, the price increase and reintroduction of fertiliser support are important wins for farmers. These decisions must be celebrated. But as we celebrate, we must also ask hard questions. The fight for cocoa farmers' livelihoods is not just about numbers — it's about fairness, transparency, and dignity. Going forward, the Government must clarify:

• Whether the Living Income Differential is still being collected;
• Whether it has been included in the US$7,200 FOB value or treated separately;
• How LID funds are being utilised and accounted for; and
• Whether farmer organisations were fully consulted in the new pricing structure.

These questions are not meant to detract from the gains made, but to ensure that they are durable and credible. If Ghana is to truly lead the global cocoa sector toward equity and sustainability, then it must uphold not only bold policies but bold transparency. President Mahama’s administration has shown courage in increasing the producer price. Now it must go a step further — by respecting the full promise of the Living Income Differential. Let’s not raise prices and still leave cocoa farmers short of a living income. Let’s not fight for fairness abroad only to dilute it at home. The world is watching. And more importantly, so are Ghana’s cocoa farmers.

The writer is a Development Consultant, Sustainability Researcher and Research Fellow of the Institute for Rural Development and Innovation Studies (IRDIS), Kwame Nkrumah University of Science and Technology. Ghana. His email address is: [email protected]