GCCP advocates for increment in cocoa producer price

The Ghana Civil-Society Cocoa Platform (GCCP) has demanded from COCOBOD, an increase in the producer price for cocoa to improve the living standards of Ghanaian cocoa farmers.

“Our greatest concern in this milestone, however, is to see a direct and obvious change in the farm gate price of cocoa beans, such that farmers’ income and living standard improve,” the group said in a statement directed to COCOBOD.

The current 2019/2020 producer price of GHS8,240 per metric tonne, equivalent to GHS514 per bag, was an 8.2 percent increase over the 2018/2019 price of GHS7,615, equivalent to GHS475 per bag.

The GCPP, however, “is of the firm opinion that farmers in Ghana should be receiving a minimum of GHS672.6 ($118.00) per bag (62.5kg) of cocoa beans.”

According to them, this demand is “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”.

Figures to back request

According to GCPP’s statement, “The current International Cocoa Organization (ICCO) world cocoa market price (which averages Europe, New York and London futures) stands at $2,474 per tonne, of cocoa beans. Based on the 2019/2020 parameters for calculating the net FoB for cocoa beans, we expect the net FoB for 2020/2021 cocoa season to be not less than 90% of the prevailing world cocoa market price. In effect, we expect the net FoB price of cocoa beans to be not less than $2,227.”

“By applying the PPRC working assumption of minimum 70% of net FoB going to farmers, that translates into $1,559 per tonne for the farmer. This figure is less the $400 LID that was instituted and charged by COCOBOD on all futures that have been sold so far. Assuming COCOBOD retains not more than 20% of the LID for stabilization against future price drops and cedi volatility, the cocoa farmer should receive minimum of $320 as LID on every tonne of cocoa beans sold.”

“In effect, when you put the farmers share of minimum 70% of net FoB ($1,557) and the minimum 80% of LID ($320) together, the Ghanaian cocoa farmer should receive not less than $1,879 per tonne of cocoa beans for the 2020/2021 cocoa season which translates into minimum GHS672.6 ($118) per bag (62.5kg) of cocoa beans. Using the year on year Bank of Ghana (BoG) exchange rate of $5.7, cocoa farmers are expected to receive not less than GH10,701 per tonne of cocoa beans which should translate into minimum GHS670 per bag of cocoa beans.”

About the Ghana Civil-Society Cocoa Platform

The Ghana Civil-society Cocoa Platform (GCCP) is an independent campaign and advocacy platform for civil society actors in the cocoa sector – comprising of Civil Society Organizations, Non-governmental Organizations, Community-based Organizations, Farmer-based Organizations, Farmer Associations, Media and interested individuals.

The main aim of the platform is to advocate and influence cocoa sector policies and programmes. GCCP is currently being hosted by SEND Ghana, with membership across the country, especially in cocoa-growing areas.