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Ghana has slash the cocoa farmgate price by 28% for the first time since at least 2020, due to declining global cocoa prices and rising payment debts owed to farmers.
In declaring the reduction, together with a wider range of changes, the Finance Minister mentioned that unpaid cocoa farmers would be paid.
“Cabinet has directed COCOBOD to commence immediate payment of all affected cocoa farmers,” he said.
What remained unclear at the time, though, was the origin of the funding, especially considering COCOBOD’s widely reported liquidity issues in recent years.
During an interview on Top Story on Joy FM monitored by Ghanatodayonline.com, Thomas Ampem Nyarko, the Deputy Finance Minister, stated that the government will take on the losses COCOBOD is anticipated to face from acquiring roughly 50,000 metric tonnes of cocoa beans that have been provided by farmers but remain unpaid.
Since the cocoa beans were provided prior to the decrease in the farmgate price, the government has consented that farmers will receive the earlier rate of slightly above $5,200 per tonne.
Under present market conditions, this suggests that COCOBOD will face significant losses.
The Deputy Minister noted that these losses are valued at roughly $150 million, an amount the government has consented to cover.
At current exchange rates, the $150 million equates to about GHS 1.6 billion. That represents a substantial financial obligation.
“There are some 50,000 tons of cocoa [that farmers have already supplied]. Government has agreed to [pay] the farmers the price that was agreed with them earlier. That means COCOBOD is going to make huge losses of about $150 million. Government is absorbing that cost,” he stated.
But the opposition in Parliament has harshly condemned the government’s choice to lower the cocoa producer price, labeling the action as unjust to farmers and harmful to the industry.
Dr. Isaac Yaw Opoku, the Ranking Member of the Food, Agriculture and Cocoa Affairs Committee, spoke to the media on Thursday, February 12, and voiced his anger about the price reduction, which drops the cost from GH¢3,625 to GH¢2,587 per bag, contending that this drastic decrease, exceeding GH¢1,000 per bag, is unprecedented.
“This has never happened. Why are we treating cocoa farmers this way? The cocoa farmer has never enjoyed the full benefit of the FOB price. Cocoa farmers have sacrificed for this country,” Dr Opoku said.
“If the cocoa farmer’s price is going to be reduced by almost 30 per cent, then everybody’s pay in this country should also be slashed by that margin. Is the Chief Executive Officer of COCOBOD’s salary and allowance going to be reduced by the same margin?. Today is a sad day for the country. The President should come again. Cocoa farmers deserve better,” he stated.
Source: Ghanatodayonline.com
