Accra, Ghana, April 29, 2019//-Ghana relies heavily on cocoa exports. Hence any infraction on the price of the crop affects the lives of many producers and their families.
The International Monetary Fund (IMF) is breathing hot air on the neck of the Ghanaian government to reduce the producer price of cocoa.
The government through the COCOBOD is resisting the pressure while the minority in parliament seems to be supporting the stand of the COCOBOD with reasons best known only to themselves.
To the IMF the downward adjustment had become necessary because the Ghana Cocoa Board (COCOBOD) was dealing with a funding gap of GHC1billion due to the government’s inability to reduce producer prices paid to cocoa farmers at a time global prices of the crop had been falling.
The IMF said the government had continuously maintained the price to support “farmers’ incomes—a key priority of the government to prevent loss of farmland to illegal mining.”
but noted that, “In staff’s view, while these measures may provide some temporary relief, more is needed to strengthen COCOBOD’s financial position,”
Though there has been a decline in the price of the commodity on the international market, which had forced all the other 21 producing countries to slash their producer prices, the Minister of Food and Agriculture, Dr. Owusu Afriyie Akoto, announced that the government was maintaining the producer price of cocoa for the 2018/2019 cocoa season at GH¢7,600 per tonne, translating into GH¢475 per bag of 64 kilogramme (kg) gross weight.
Cocoa price was last increased by 11.76% in October 2016 to cover the 2016/2017 season. This means a tonne is sold at GHC7,600, translating into GHS5475 per bag of 64 kilograms.
Statistics show that within the same time the price of cocoa on the international market has dropped from an average of $2,500 per tonne in November 2016 before ending that year at $2,287 per tonne according to the International Cocoa Organisation (ICCO).
In 2017, the price of cocoa only started rising in October before falling again to end December at $1,917.68 per tonne, according to the ICCO.
In 2018 prices strengthened consistently to peak at $2,659.9 per tonne in May before fluctuating throughout the remaining part of the year.
In spite of the IMF’s worry the COCOBOD is resolved not to reduce the price of the produce because the cocoa farmer is already not in a vantage position condition so any further reduction will worsen the condition.
“The country has to sacrifice for them; there is a need to make that sacrifice for the benefit of the people who have contributed to the country’s building over the years”, it stated.
To cushion the industry the COCOBOD on March 19 raised US$300 million from a consortium of international banks to repay “cocoa bills raised by Bank of Ghana on behalf of COCOBOD and also to be used to finance production enhancement programmes”
COCOBOD’s Joseph Boahen Aidoo reiterated that the loan would go a long way to help in carrying out COCOBOD’s sustainability programmes in all cocoa regions to enhance the social and environmental sustainability of cocoa farming and also improve the livelihood of farmers.”
To the minority NDC there was no need for reviewing the price of the commodity downwards. According to MP for Chereponi and Deputy ranking member of the Food, Agriculture and Cocoa Affairs Committee, Samuel Abdulai Jabanyite, “We (NDC) as a government in 2014 foresaw that commodity prices in general fluctuate, so for that matter, in October 2014 government established the Cocoa Stabilization Fund.
What has been accrued in it should be sufficient enough to maintain the producer price so that the farmer can also live comfortably. If you decrease the price of cocoa which is the mainstay of the farmer, where is he going to get the money to be able to go into the market to buy his self-needs? So that is not an option that we are going to consider.”
“We think that COCOBOD shot itself, because they are the cause of the problem. What they have brought out from 2017/2018 in their own budget shows that their overheads are way above, some of the investments that they’ve made, we can say are unreasonable.
So we believe that if COCOBOD can cut its overhead expenditure, they should be able to have enough money. If they also make good use of the stabilization fund they should have sufficient money to cushion the farmers against these external shocks”, he said.
By Oppong Baah, African Eye Report
