Joseph Boahen Aidoo, CEO of COCOBOD
The Ghana Cocoa Board (COCOBOD) has appealed to cocoa farmers to disregard comments by the Minority in Parliament, which seeks to suggest that cocoa farmers were being treated unfairly.
The appeal follows claims by the Minority in Parliament that government was unfairly treating cocoa farmers by disclosing that it would not increase cocoa prices due to the drop in prices on the world market.
In a statement issued by the Public Affairs Directorate of the Board, it said: “We wish to assure our cherished farmers that management is putting in place measures that will reduce our over-dependence on foreign buyers in the determination of cocoa prices. Among these, Ghana and Côte d’Ivoire have started dialoguing to cooperate on measures to ensure better prices for cocoa.”
Recently, Ghana and Cote d’Ivoire held a Joint Cooperation Meeting in Accra to discuss what both countries could do to ensure that at least 50 percent of cocoa produced in the two countries were processed locally.
Producer price
Noting that the Producer Price Review Committee was the only body mandated by law to set price of cocoa, the Board said: “We would like to put it on record that the Stabilization Fund was established during the 2007/08 cocoa season. Government set up the Fund as part of measures to guarantee stable income for cocoa farmers. In other words, the Fund was meant to maintain the prevailing producer price in the event that the net FOB price falls drastically, as being experienced now, so that government does not reduce the producer price.”
It said that the creation of the Fund underpinned government’s commitment to reducing the exposure of cocoa farmers to price volatility on the world cocoa market and therefore it was unfortunate to assume that the Fund was set up to increase producer price.
“The Stabilization Fund is rather a standby Fund which ensures that irrespective of how low cocoa prices fall on the world market, Ghanaian farmers do not suffer a reduction in producer price.
“We also wish to put on record that in the 2012/13 and 2013/2014 crop seasons, following a drastic fall in world prices of cocoa, COCOBOD used the Stabilisation Fund to maintain the producer price of cocoa per tonne at GH¢3,392.00. It is, therefore, not out of place for COCOBOD to take similar measures in the 2017/18 crop season to avoid a total collapse of the cocoa sector and to sustain cocoa farmers’ interest in the industry.
“The Stabilization Fund, therefore, is neither to be used to increase producer price nor pay bonuses as stated by the Minority in Parliament, but rather as the name implies to stabilise prices to the farmers.
“The producer price of GH¢7,600.00 per tonne of cocoa announced at the beginning of the 2016/2017 crop season has not, and will not be reviewed downwards as being speculated, despite the fall in the world price of cocoa from over US$3,122 per tonne in June 2016 to as low as US$1,900 in June, 2017.”
Even though such conditions, which saw 40 percent fall in the world market price of cocoa have the potential to cause a reduction in the producer price, as being done in neighbouring Cote d’Ivoire, Nigeria and Cameroon, COCOBOD has decided to absorb the loss and by this arrangement cocoa farmers are being paid extra $400 above what the market prescribes for every tonne of cocoa bought from them.
By Samuel Boadi