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06.01.2006 Business & Finance

LBCs blame COCOBOD for hitches in cocoa purchases


Accra, Jan. 6, GNA - The Licensed Cocoa Buyers' Association of Ghana (LICOBAG) on Friday asked the COCOBOD not to hide behind its inefficiencies to blame the Licensed Buying Companies of the problems currently plaguing the industry.

At a press conference in Accra, the Association denied being the cause of non-payment of cocoa farmers, congestion at the takeover centres or ports, lack of logistics such as jute sacks, stencil ink, twine for cocoa purchases and packaging and the general slow purchasing activities in the field.

"We call on COCOBOD to accept their inability, incapacity and inefficiencies to properly regulate the cocoa industry, and begin to bring on board all stakeholders to brainstorm and seek lasting solutions to these problems for the farmers and the economy to reap the fullest benefits and expectations of their toil and investment," Mr Kwabena Ohemeng Tinyase, President of the Association, told a press conference in Accra on Friday.

Mr Tinyase said the inactions of COCOBOD and policy bottlenecks had led to the shortage of funds for the purchase of cocoa for the current 2005/6 season, adding that the LBCs had fully utilized all seed fund advanced to them by COCOBOD for the purchase of cocoa. "Furthermore, LBCs, sensitive to the plight of farmers have gone ahead to contract overdrafts and loans to augment COCOBOD's funding." Mr Tinyase said LBC's purchasing capacity was further reduced by the decision of COCOBOD to retain a whopping 30 per cent of the producer price of stocks delivered at the ports because of the purple bean problem.

This, he said, drastically reduced the ability of LBCs to go back to the field to buy more cocoa.

He said, it was sad that COCOBOD deemed the LBCs as the cause of the present purple bean problem, "which is purely a production problem and not a marketing one".

Besides delays by COCOBOD to process documents to enable LBCs to obtain funding had added to the inability of LBCs to purchase more cocoa.

On the issue of non-payment of farmers' bonus, Mr Tinyase said the problems existed in the areas where COCOBOD took it upon itself to pay the farmers themselves.

He said COCOBOD's failure to provide sufficient jute sacks rendered LBCs unable to purchase stocks even when there were funds. As a result, cocoa was being stored on the floor and inappropriate containers, a situation that could compromise the quality of the produce, he added. Mr Tinyase also accused COCOBOD of being unable to provide adequate warehousing facilities in spite of the increasing volume of production, resulting in congestions at the ports and depots across the country. He said as part of COCOBOD's ad hoc measures to deal with the congestion, it gave LBCs delivery quotas and because of the inability to offload in line with delivery schedule and wrong routing, stocks had piled up and congested the Takoradi and Tema ports while Kaase inland Takeover Centre in Kumasi lay under-utilized.

"As at today, as a result of COCOBOD's inability to offload LBCs' vehicles, as per its own quota system, stocks are piling up at the ports and our up country warehouses or depots are choked with cocoa valued at trillions of cedis."

Mr Tinyase mentioned the low margins being paid by COCOBOD in recent times to LBCs despite the increasing cost of operations, saying the practice had increased the losses of LBCs and threatened their existence.