COCOA farmers in Ghana have been given a huge incentive to boost their morale to increase production, following the government’s upward adjustment of the producer price of cocoa by 62.74%.
The Ministry of Finance and the Ghana Cocoa Board (COCOBOD) have announced on Thursday.
The Minister of Finance, Seth Terkper who chaired the Producer Price Review Committee (PPRC) meeting on Thursday said: ” The new price takes effect from Friday, 3rd October, 2014″.
The Ghanaian government will now pay cocoa farmers GHS5,520 per tonne of cocoa they produce for the 2014/2015 crop season, up from the from GHS3,392 in line with the new price.
As compared to the previous season, this amount represents an increase in price of GH¢2,128.00 per tonne or 62.74%.
This figure translates into GH¢345 per bag of 64 kg gross which represents about 75 percent of the net free-on-board (FOB).
Also, COCOBOD and the government have decided to pay bonus to farmers at the time of sale of their produce.
Accordingly, an additional amount of GH¢5.00per bag of 64kg gross weight has been approved. Therefore, for each bag of 64kg gross weight of cocoa sold by the farmer, the farmer shall be paid GH¢345.00 per bag plus GH¢5.00as bonus. Licenced Buying Companies (LBCs) are to take note of this and pay our cherished farmers accordingly, he stated.
Mr Terkper emphasised that “LBCs are to ensure that farmers are paid at the time of the sale of their produce GH¢350 per bag of 64Kg gross weight.
Farmers must insist that at the time of sale they are paid GH¢350.00 per bag of 64kg gross weight of their produce. This brings the price and bonus per tonne of cocoa to GH¢5,600.00 (US$1,750.00) which is equivalent to 76% of the net FOB. All LBCs must comply”.
The last two seasons saw the average FOB prices of cocoa used for the review of the Producer Price declining from US$3,000 in 2011/12 to US$2,300 in 2012/13. The 2013/14 season even experienced a further decline in the price to US$2,130.00 per tonne.
Government the Minister said was compelled to drastically reduce its share of the 2013/14 cocoa export duty, in order to raise the producer price paid to our hardworking cocoa farmers. That decision was taken to increase the earnings of farmers so as to enhance their welfare.
There have been positive developments on the world cocoa market since the last review of the Producer Price in October 2013. It is against these positive price developments that the Producer Price Review Committee met and decided on the upward review of the Producer Price.
During the 2008/09 crop year, Government set up a Stabilization Fund with annual contributions from the FOB price as a risk mitigating mechanism against a fall in international cocoa prices. The primary objective of the Fund was to apply it to sustain the earnings of cocoa farmers in challenging times like was experienced during the 2013/14 cocoa season.
The PPRC has decided once again to re-establish the Stabilization Fund so as to be able to cushion farmers should the world market price begin to decline as we move into the future.
OTHER RATES AND FEES
The PPRC also approved other rates and fees for all other stakeholders in the industry. These include the Buyers’ margin, Hauliers’ rate, warehousing and internal marketing costs as well as fees for disinfestation, grading and sealing.
The margins, rates and charges have been increased substantially over last year’s levels in order to ensure that other key stakeholders operate at profitable levels to sustain the cocoa industry.
GOVERNMENT SUPPORT AND COMMITMENT
Mr Terkper emphasised that the government would continue to support other interventions including the pests and diseases control (Mass Spraying) for farmers, and the fertilizer application programme to increase the productivity of cocoa farmers in the country.
He stated: “Government also commits itself to continuing with the rehabilitation and replanting of cocoa farms, the provision of 50 million free improved seedlings over the next three years to farmers to help replant diseased infected trees that would be removed over the period
Government will rehabilitate existing schools, construct new ones and provide them with essential social amenities.”
To enhance the welfare of cocoa growing communities, government, Mr Terkper said was supporting COCOBOD to expand its cocoa roads rehabilitation programme. COCOBOD has also put in place a child education support programme which aims at building schools and libraries in deprived cocoa communities.
Government will thus continue to support COCOBOD to play its role as a major contributor to the economic development of Ghana, according to him.
