Akufo-Addo Government To Consider Pay Cut For Cocoa Farmers

Government will consider cutting the price it pays to cocoa farmers because a slump that started more than a year ago shows little sign of abating, said Finance Minister Ken Ofori-Atta.

A price cut would signal a policy shift in the world’s second-biggest grower of the beans, which has ruled out changing farmer payments since setting the minimum price at 7,600 cedis ($1,700) per metric ton in October 2016.

Over the same period, futures contracts in London have slumped by more than a third to near the lowest in six years on forecasts of a second consecutive bumper crop in West Africa.

In neighboring Ivory Coast, the biggest producer, the cocoa regulator lowered minimum pay for its main harvest that started in October by 36 percent to the equivalent of $1,247 per ton.

Ghana would prefer to pay farmers the equivalent of 70 percent of freight-on-board prices, Ofori-Atta said.

The industry regulator said it was subsidizing producer pay with about 984 million cedis for the annual season that started the previous month, in addition to exhausting the 310 million cedis of a stabilization fund.

Cocoa beans are processed into powder, used in ice cream and cookies, as well as cocoa butter, which accounts for about 20 percent of a chocolate bar.