Higher Cocoa Prices And Smuggling
The Government has announced a new producer price for cocoa farmers in the country and a novelty insurance package to motivate them to boost their yield and farm size.
The new price of GH¢138 per 64-kilogramme bag of cocoa, or 35.29 per cent more than the previous price of GH¢1,632 per tonne, would put a total of GH¢2,208 per tonne of cocoa in the pocket of the cocoa farmer.
This amount represents an approximate 71.06 per cent of the world selling price of the cash crop, which is currently hovering around US3,080.
According to the Minister of Finance and Economic Planning, Dr Kwabena Duffuor, who made the announcement after a meeting of stakeholders on October 14, the Government had also set aside seed money of GH¢21.43 per tonne of their produce, working out to a total of GH¢15 million to set up the social security fund for cocoa farmers.
This will entitle them to pension benefits upon retirement, a departure from the practice where they had to save for the future on their own.
The Government also directed COCOBOD to work out bonuses, within a matter of two weeks, and pay to farmers in relation to the 2008/2009 main crop season in view of the favourable price of cocoa on the world market. The payments must be effected by December this year.
Other rates and fees in the industry would also increase in accordance with the favourable cocoa season. They include buyers’ margin, hauliers’ rate, the internal marketing costs of the Cocoa Marketing Company, as well as fees related to agronomic practices and scale inspection. In addition, there will be quarterly price reviews, instead of the yearly ritual to pass on any price increases on to the farmer.
These are some of the measures to encourage the farmers to stay the course and attract new farmers, particularly the youth, into cocoa farming. The farms in Ghana have for long remained in the hands of the aged who hire labourers to work for them.
They often bequeath the farms to their family members to continue, without necessarily adding to the number of farmers in the industry.
That notwithstanding, one major problem that the generous package seeks to resolve is the scourge in smuggling of cocoa beans to neighbouring Cote d’Ivoire for higher prices. This practice has reduced the nation’s foreign exchange earnings from the sale of cocoa beans.
Cocoa prices have fluctuated between US$2,800 and US$3,050 on the world market since the fourth quarter of last year. The price as of October 14 was US$3,130 per tonne (about GH¢4,560).
And cocoa purchases for the 2008/2009 crop season exceeded the 650,000-tonne projection to hit 710,000 tonnes. The next crop season, 2009/2010, is projected to repeat this feat.
Despite the hike in price on the world market, cocoa farmers in Ghana have received little for their output. This is why the measures announced by the Government look good in the medium term and when implemented well and enhanced in future, could help curtail smuggling completely.
Ghana has been a longstanding producer of cocoa beans for export. Its cocoa industry, the fulcrum of the economy, has been strong because of the structures and institutions built around it.
The Cocoa Marketing Board, now COCOBOD, has been one of the institutions that has pushed the industry to its present height. It is a home-grown institution, the pride of the people of Ghana, and Governments have turned deaf ears to donor partner calls for its collapse.
COCOBOD still remains the sole buyer and exporter of cocoa beans in the country. It fixes the producer price and licenses produce buying companies to purchase cocoa beans from the hinterlands on its behalf.
The board is, therefore, responsible for extensive services at the cocoa farms, where the farmers are helped with agronomic practices for them to increase yield and maintain the quality of the beans.
These have helped the country to retain the first position as the producer of quality beans even as it lost its title as the highest producer of the beans.
This explains why the country at independence in 1957 and shortly thereafter had one of the highest per capita incomes in Africa, and rubbed shoulders with the likes of South Korea and Malaysia on productivity and income levels.
Currently, Ghana comes second after Cote d’Ivoire as the largest producer of cocoa beans with production levels in the country increasing from 496,800 tonnes in 2003 to 710,000 tonnes in 2009.
It is, therefore, welcome news to hear the farmers themselves express joy and satisfaction with the package.
“We are very grateful to the government for this significant increment from GH¢1,632 per tonne. We believe it will encourage more people to go into cocoa farming and also increase their farm sizes,” the Chairman of the Finance Committee of the National Cocoa and Sheanut Farmers Association, Nana Adjei Damoah, told the GRAPHIC BUSINESS shortly after the stakeholders had issued a joint statement in Accra.
For now, it is appropriate to see how the revised Cocoa Sector Development Strategy document, which was approved in April 1999, would dovetail into the Government’s medium-term plan being prepared by the National Development Planning Commission (NDPC).
It will also be heartwarming to see the collaboration between COCOBOD and the National Security apparatus to fight the smuggling of cocoa beans to neighbouring Cote d’Ivoire, work to perfection. GB Share Your Thoughts on this article Name Email Location Comments Graphic Ghana may edit your comments and not all comments will be published