In a bold move, the General Agricultural Workers Union (GAWU) has issued a challenge to the government, urging for a substantial 150 percent increase in the farmgate price of cocoa.
GAWU contends that such a raise wouldn’t just incentivize cocoa farmers to increase production but would also combat the concerning trend of farmland being sold to illegal miners.
Dr. Edward Kareweh, General Secretary of GAWU, emphasized the need to prioritize the financial welfare of cocoa farmers.
He argued that there’s no justification for the government to consistently set cocoa prices below those of Ivory Coast whenever COCOBOD announces rates for the new planting season.
“Why must we always look at the price set by Ivory Coast and fix our price slightly below theirs? Ivory Coast has increased its price by 100 percent. What I hear is we are considering 50 percent. Why can’t we increase cocoa price by 150 percent,” he argued.
Dr. Kareweh observed that such an increase would motivate farmers to increase production and stop selling farmlands to illegal miners who offer lucrative deals.
“When you listen to the farmers selling their farmlands, they tell you that the miners offer them huge amounts of money, which they can’t decline. If the cocoa farmer is earning better, they won’t sell their farms”.
Dr. Edward Kareweh
Dr. Kareweh emphasized the critical importance of protecting cocoa farmers, highlighting their indispensable role in generating foreign earnings for the country. He noted that revenue from cocoa has long served as a dependable source of funding to fuel Ghana’s economic growth.
Addressing the upward trend in cocoa prices on the global market, Dr. Kareweh asserted that the surge in demand for the product signifies a pivotal moment for producers to assert their influence over pricing.
“We have seen the consumer of cocoa always setting the price. However, as the price goes up on the world market, the producer must take advantage to set the price”, he said.
Calls For Price Increase
The Ghana Cocoa Board (COCOBOD) announced that the government is contemplating a hike in the farmgate prices of cocoa beans for farmers.
This decision, currently under discussion among stakeholders in the cocoa sector, aims to enhance the well-being of farmers while curbing the illicit movement of cocoa beans to neighboring countries.
COCOBOD highlighted that the proposed increase serves a dual purpose: not only to uplift farmers’ livelihoods but also to combat smuggling, particularly to the Ivory Coast.
This move comes in response to Ivory Coast’s recent announcement of a 100 percent hike in farmgate prices, spurred by a surge in global cocoa prices.
The government is reportedly considering a significant increase in cocoa farmgate prices, with Bloomberg forecasting a potential rise of over 50 percent for farmers.
Should this adjustment come to fruition, it would signify a notable departure from past practices, marking the first instance of Ghana implementing two pay increases for farmers within a single main crop season, which spans from September to June.
Already, at the commencement of the season, the government raised the rate by 63.5 percent to 20,928 cedis a ton.
Reasons World Prices On Uptick
According to Bloomberg analysis, Cocoa futures in New York have increased in recent months due to adverse weather conditions and disease-impacting output from Africa.
Initially, the rush to secure supplies drove prices higher, but since then, futures have more than doubled this year, placing significant pressure on traders due to margin calls and forced buying.
Furthermore, the analysis reveals that the spike in wholesale markets has resulted in a sharp decline in the share received by Ghanaian farmers, plummeting from 44% to 16% over the past seven months.
This decline occurred since the government last updated the farmgate price. Even if farmers’ pay were to double, it would still fall far below the levels observed on the world market.
