Cocoa Farmers in Ghana want 72% increase in farm-gate price

Cocoa farmers in Ghana are urgently appealing to the government for a significant increase in the farmgate price of their cocoa produce. Their primary reasons include addressing poverty among farmers, curbing cross-border smuggling, and combating illegal mining activities on cocoa farms. These farmers, organized under the Ghana Civil-society Cocoa Platform (GCCP), recently held a press conference in the capital city, Accra, to emphasize their case for a 72.5% raise in the farmgate price, aiming for GHS1380 per bag. Currently, the government, through its cocoa sector regulator, the Ghana Cocoa Board (Cocobod), pays GHS800 for a 64kg bag of cocoa beans.

Leticia Yankey, a cocoa farmer and cooperative leader, asserted, “It is our strong belief that Ghanaian farmers should receive a minimum of GHS22,080 per ton, equivalent to GHS1,380 per bag of cocoa beans.” This recommended price aligns with the standard practice of the government’s Producer Price Review Committee (PPRC), which typically sets the farmgate price at a minimum of 70% of the net Free on Board (FoB) price of cocoa beans.

Yankey further explained that the GCCP’s suggested farmgate price for the upcoming 2023/24 crop season is based on the assumption that Cocobod will fully implement the $400-per-tonne Living Income Differential (LID). Additionally, the farmers considered global market dynamics, including a more than 35% increase in the International Cocoa Organization (ICCO) world cocoa market price. They also factored in challenges such as the unstable Ghanaian cedi, high inflation rates, costly labor, and the necessity for farmers to receive fair compensation for their hard work.

The GCCP, an independent campaign and advocacy platform in the cocoa sector, raised concerns about cocoa smuggling by farmers due to the low farmgate price. They believe that this year’s frequent incidents of cocoa smuggling have significantly hindered Ghana from achieving its cocoa production targets.

The farmers highlighted that cocoa producers in Ghana are now well-informed about international cocoa industry dynamics and market price trends, especially in the West African cocoa-producing region. They argued that neighboring countries using a more liberalized cocoa marketing approach have increased their farmgate prices. In some cases, cocoa was sold in Togo for the equivalent of GHS1,500 per bag, nearly twice Ghana’s farmgate price, which incentivized smuggling. The farmers claimed that the lack of funds to purchase cocoa at certain points in the season led some farmers to sell their produce to smugglers who transported it to neighboring countries.

The GCCP also expressed concerns about mining activities in cocoa communities. Some frustrated cocoa farmers and landowners have been selling off their farmlands to miners for significant financial gains. Leticia Yankey argued that these farmers do not feel adequately compensated for their hard work, prompting them to leave the cocoa industry and cash in on their land.

To address these challenges in the cocoa sector, the GCCP called upon the Ghana Cocoa Board to enhance competitiveness by raising the farmgate price to levels that cover the farmers’ production costs.

In an unprecedented development, Ghana is set to announce a new farmgate price for cocoa on September 8, 2023, one month ahead of the annual Cocoa Day celebration on October 1. Bloomberg reported that sources within Cocobod have hinted at an approximate 63% increase in Ghana’s farmgate price to GHS20,800 per ton or GHS1300 per bag. Additionally, President Nana Akufo-Addo is scheduled to address an industry gathering to mark the official opening of the 2023/24 crop season on September 9, 2023, in Tepa, a town in Ghana’s leading cocoa-producing Ashanti Region.