Government should have pegged cocoa prices to at least GH¢2500 – Minority

The Minority in Parliament has said the government has not been fair to cocoa farmers in its recent price increases for the new 2023/2024 cocoa season.

The government announced the increase in cocoa prices from GH¢800 to GH¢1300 per bag.

The Deputy Ranking Member on the Food, Agriculture and Cocoa Affairs Committee of Parliament, Eric Opoku, said the government gave cocoa farmers “peanuts”.

He expressed worry over the price given to cocoa farmers, stressing that this season is a good year for cocoa farmers to benefit from their produce.

“We sell cocoa on the international market, so it is not the president who decides he will give cocoa farmers the prices he wants. His ability to determine the price depends on what prevails in the international market. If at any point in time, the market is favourable, cocoa farmers must also be given the opportunity to enjoy it. This is a good year for cocoa farmers all over the world. This year, cocoa prices have surged to historical heights. And so this is an opportunity for cocoa farmers to enjoy.

“Unfortunately, the government is giving them a price far below what is prevailing in the international market. And so some of us became worried. Why is it that we have this high price and then our cocoa farmers are being given just peanuts? This is not what is happening in the international market. Cocoa farmers should be given something close to GHC2,500 minus the premium. That is why we are saying this government is short-changing the cocoa farmers,” he is quoted to have said on citinewsroom.com.

The former President, John Dramani Mahama, had also shared similar sentiments over the price increase, saying the government has shortchanged cocoa prices.

However, the Chief Executive of the Ghana Cocoa Board, Joseph Boahen Aidoo, responded to the claims by the former president.

The COCOBOD boss said the post by John Mahama was shrouded in error and has generated some level of misconceptions and miscommunications from the public.

According to him, it is imperative that he responds and clears those misconceptions.

In a public letter addressed to John Mahama on September 12, 2023, he said: Since you have had the privilege of being in government before as the number one gentleman of the country, it is expected that you would be familiar with the process for determining the producer price of cocoa. I am, therefore, surprised that you chose, rather erroneously, to use the current international market price of cocoa at $3,600 per tonne as the basis for your calculation in your post on the recently announced producer price.”

He explained that Ghana’s cocoa beans are mostly sold forward.

This means that the 2023/24 crop was sold between October 2022 and March 2023 at international prices; ranging between $2,200 per tonne and $2,400 per tonne.

The international price of cocoa then began to increase in April 2023, when a greater percentage of the 2023/24 crop had already been sold.

“The forward sale strategy enables COCOBOD to give farmers a guaranteed producer price and raise the syndicated loan offshore to pay farmers promptly for their produce,” he said.

Joseph Boahen said in the 2015/16 season, the NDC-led administration announced a producer price of GH₵6,800 per tonne.

This was 61.71% of the gross FOB of $2,900 per tonne at the time, not the 66.06% as he alluded.

“This cannot be said to be better than the 70.03% achieved for the 2023/24 season,” he stated.

SSD/NOQ

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