The Ghana Civil-Society Cocoa Platform (GCCP), has charged COCOBOD to strengthen its surveillance at various depots and cocoa-sheds to ensure cocoa farmers enjoy the new producer price for cocoa without being cheated.
Over the years, some cocoa purchasing clerks have been accused of cheating farmers by illegally adjusting weighing scales to the disadvantage of the farmers.
In an interview to touch on steps COCOBOD must take to ensure farmers enjoy the new Living Income Differential (LID) which has led to a 28 percent increase in the producer price of cocoa for the 2020/2021 crop season, the Co-Coordinator of the Ghana Civil-Society Cocoa Platform, Obed Owusu-Addai, called for increased vigilance to protect the interest of the farmers.
“As we have always said there are some inherent challenges when it comes to the purchasing of cocoa that needs to be addressed. One of the foremost ones is the fact that the purchasing clerks are known to adjust the scales to cheat the farmers. So what we are saying is that there needs to be high vigilance and surveillance by COCOBOD to ensure that the farmers get the correct weight for their cocoa beans when they take it to the cocoa sheds.”
Below is the full statement from GCCP.
GCCP COMMENDS THE GHANA COCOA BOARD ON PRODUCER PRICE INCREMENT FOR 2020/2021 COCOA SEASON
The Ghana Civil-Society Cocoa Platform (GCCP) celebrates the government’s efforts in ensuring cocoa farmers earn a decent income. We have followed various steps taken by the government and its Ivorian counterpart resulting in a massive change in the price of cocoa beans, following the introduction of a floor price and a Living Income Differential (LID) to be paid by chocolate and processing companies. The recent announcement of GHS 660 payment per bag of 64kilogram of cocoa, which translates into GHS10,560 per a tonne of 16 bags for the 2020/21 crop year, beginning 1st October 2020, is a great milestone, and a show of COCOBOD’s commitment to awarding cocoa farmers the full LID of four hundred United States dollars per metric ton (US$400/MT).
The GCCP on September 24, 2020, issued a statement indicating our expectation of an increment in the farm gate price which was scheduled to be announced on 1st October 2020. Though not what we requested for, the recent announcement of GHS 660 per bag of 64kilogram (about 28% increase over the price obtained in the just ended 2019/2020 crop year) of cocoa is not far from our expectation. Based on the working assumption of the Producer Price Review Committee (PPRC) of COCOBOD, which aims at ensuring that farm gate price is pegged at a minimum of 70% of the net Free on Board (FoB) price of cocoa beans, GCCP believed that farmers in Ghana receive a minimum of GHS672.6 per bag (64kg) of cocoa beans. This figure was arrived at using the lowest projected values available, including 80% of the $400 per tonne LID announced in July 2019.
The current price of GHS660 per bag of cocoa beans is commendable, noting that the Ghana Cocoa Board together with its pricing committee (Producer Price Review Committee – PPRC) appears to have offered fully the $400 LID to farmers as agreed on with chocolate and processing companies.
This is remarkable as it will cushion farmers during the Coronavirus pandemic. However, this also raises questions about what percentage of FoB price of cocoa was offered to farmers and at what exchange rate? By our internal projections, it does appear farmers received only 68% of FoB price at an exchange rate of $1: GH5.5, which falls below the PPRC threshold of 70% and far below the current Bank of Ghana year on the year exchange rate of GH5.7. This also raises another transparency issue of publishing the indicative figures that go into deciding the price of cocoa annually.
As we commend the COCOBOD for this milestone, we also wish to point out the following:
- The COCOBOD must strengthen its surveillance in order to curtail all factors that could hinder the farmer appreciating fully the LID. We specifically suggest that intensive monitoring at various depots and cocoa-sheds are undertaken, as well as, sensitization of farmers on how to escape weighing scale adjustment fraud by purchasing clerks (PCs) as reported in a 2019 SEND GHANA study. It is of great importance that the COCOBOD sanctions identified PCs who were caught in the Joy News “Missing Kilos” documentary in August this year as a deterrent to others, whiles we await implementation of electronic weighing scales next year.
- The COCOBOD must ensure that various Productivity Enhancement Programmes benefit all farmers. Inputs distribution programme, including fertilizer and mass spraying, must among others be equitably distributed and thus particularly ensuring that women farmers equally benefit since the 2019 SEND GHANA study also revealed increased likelihood of exclusion of female farmers from both the fertilizer input and the mass spraying programme.
- The COCOBOD must also ensure that farmers whose over-aged and diseased farms are being rehabilitated are compensated appropriately so as to motivate others from participating in the program
We strongly believe that when all these factors are properly addressed and implemented, it will to a greater extent improve farmer’s income and livelihood as anticipated by this price increment.
Cocoa Producer Price increased from GH¢514 to GH¢660 per bag for 2020/2021
Earlier, the President, at the launch of the National Cocoa Rehabilitation Programme at Sefwi Wiawso announced that the new producer price of cocoa is now pegged at GH¢10,560 per metric tonne.
For the breakdown, a bag of cocoa is now GH¢660 from the initial price of GH¢514.
The current price per 64kg bag of cocoa, which stands at GHS514 had earlier been increased by 8.2 per cent from GH¢475 per bag.
The Living Income Differential
Touching on the unstable nature of cocoa prices on the world cocoa market, President Akufo-Addo stated that “it remains one of the biggest challenges to ensuring payment of decent farm-gate prices to our cocoa farmers”.
With Ghana and Cote d’Ivoire responsible for 65 per cent of the raw cocoa beans used in making chocolates, the President bemoaned the fact that cocoa farmers from the two countries just US$6 billion from an over US$100 billion chocolate industry.
This, he explained, is the meagre return that hardworking farmers get from their toil.
“Government believes that value-addition to our cocoa, and the search for new markets, will make us more money than all the aid given to us by all the donor countries. We shall gain some dignity, and spare the donors the fatigue we have all heard about,” he added.
This, according to President Akufo-Addo, is the rationale for the Strategic Partnership between Cote d’Ivoire and Ghana, the common initiative of His Excellency President Alassane Ouattara of Cote d’Ivoire and himself, which is manifesting itself in a joint cocoa production and marketing policy, and which is already paying dividends.
“Today, I am happy to announce that Ghana and Cote d’Ivoire are receiving a Living Income Differential of US$400 per tonne of cocoa, which is an additional earning from the world market price for our farmers. The Living Income Differential is going to guarantee some stability to the producer price of cocoa and sustainability of the industry in Ghana and Cote d’Ivoire,” the President said.
