Cocoa farmers in Ghana have welcomed the government’s decision to increase the cocoa producer price by 28%.
In an interview on Newsnight, the Chairman of the Ghana National Cocoa Farmers Association (GNCOFA), Mr. Stephenson Anane Boateng, stated that although the 28% increase in cocoa producer price does not match their expectations, it is better than nothing.
“We were expecting it to be about ¢1000 cedis per bag but we like it and we are much appreciative of what he [the President] has done.”
Mr. Anane Boateng, Chairman of Ghana National Cocoa Farmers Association (GNCOFA)
He explained that the money that the Cocoa Farmers had expected was in consideration of their welfare and pension schemes. However, they believe the recent increase is a step towards their intended target.
“Last year he [the President] did a little and this year too so gradually it is going up. So, we like it,” he added.
Ghana cocoa will now be sold at ¢660 per bag (64kg) for the 2020/2021 crop season. The previous season saw a 64kg bag being sold for GH¢514.
This price increase has sent the price for a tonne of cocoa from ¢8,240 to ¢10,560 cedis.
Earlier in an announcement, President Akufo-Addo stated that the increase is the government’s efforts keep up with Ghana’s commitment under the international arrangement with Cote D’Ivoire to set a fixed Living Income Differential of $400 per tonne of cocoa to relieve farmers of poverty.
The Living Income Differential (LID) is the extra sum to be paid on each tonne of cocoa which subsequently translates into an increase in the cocoa commodity price paid to the farmers. It indicates the price needed for an average farmer household with a viable farm size and an adequate productivity level to make a living income from the sales of their cocoa.
Speaking at a gathering at Sefwi-Wiawso, in the Western North Region on Thursday, the President added that “it is also the government’s intention to reward farmers for their work”.
President Akuffo-Addo announcing the 28% increase in cocoa producer price
He said that “by this substantial increase in the producer price, we are also delivering on our promise to reward handsomely the hard work of our cocoa farmers, and their contribution to Ghana’s economy over the decade”.
President Akuffo-Addo also reiterated his government’s commitment to ensure that the industry receives the needed attention and obtains its fair share of the national cake.
On 14th of September, Ivory Coast and Ghana increased cocoa prices by 21% and this will take effect on October 1, the beginning of the 2020/2021 and continue through to September 2021.
To tackle poverty among farmers, the two leading cocoa growers, Ivory Coast and Ghana as of June 2019, established a price floor of $2,600 per tonne and a Living Income Differential (LID) geared towards increasing their payoffs. The raise is as a result of the implementation of a $400 per metric tonne premium on futures prices for the 2020/2021 harvest. While the aim of the cocoa exporting giants, and stakeholders is to pay 70% of the $2,600 per tonne target price to cocoa farmers, a rise of the price above $2,900 will see proceeds of the LID being placed in a stabilisation fund which will cushion farmers against any decline in cocoa prices below $2,600 in the future.
