Ghana To Loss Position On World Cocoa League – CAL

Spread the love

Government has on Monday, November 19 2018, commenced an engagements with cocoa farmers across the country seeking to strengthen interaction with the Cocoa Sector.

The engagements began in Koforidua, Tafo in the Eastern Region and will continue in other Cocoa growing districts in Brong-Ahafo, Ashanti, Western and Central Regions of Ghana.

Following this, we at the Centre for Agro Liberty (CAL) have observed that government is about trying to show concern that it cares, but is government really going to tell the framers the truth about why their cocoa beans are so important, how it is sold and how gainful its export is?

This, CAL thinks, should not be the aim to score political points on score sheets for votes but once its contributions to GDP is significant, it must be done in the interest of the farmers and of the economy.

Again, we do not know if farmer groups or associations were given notice of the purpose of their visits and what kind of discussions and what form would it take so they could prepare to document their grievances and recommendations to enhance productions on a win-win base between government and the farmers.

We know most of the discussions would be centered around fertilizer subsidies and distributions as well as diseases. These are not new thing to the farmers. It’s indispensable for innovative discussions to secure the sector when most are moving away from cocoa to rubber.

We are therefore very surprised that the government under the leadership of Nana Akuffo-Addo, after all the lofty promises it made to the farmers when in opposition, would now take a u-turn and be charging farmers for fertilizers marked “not for sale”.

However, this is the first time such a high delegation from government is meeting farmers across the country. Is this going to be the first and the last and if not, how often is government going to engage these farmers? Any roadmap of engagement?

That notwithstanding, CAL in engaging most of these farmer associations in the Eastern, Ashanti and the Brong Ahafo Regions, they were not aware of any government’s engagement with farmers across the country. Those they first engaged in the Eastern Region said called them in a meeting all of a sudden and they new virtually nothing about it.

Speaking to Asunafo North Co-operative Cocoa Farmers and Marketing Union in the Asunafo North Municipality of Brong Ahafo Region, which constitutes a membership of over 7,000 in about 69 communities, as well as leading cocoa production in the Region for two consecutive times, they said they haven’t heard of any engagement of farmers across the country with the government.

Government has however, secured an amount of US$ 1.3 billion to produce and purchase cocoa for the 2018/19 season, we think because government wants value for money, there is the needs to engage the farmers as to how to bring out quality produce in order to avoid losses.

The visit is in the interest of the government, as to how it can export more tonnes of cocoa than the previously did, so it can use that as an achievement in the sector.

This comparative analysis is what the government is seeking. Regardless of this, the government also wants to assure farmers of their support.

Total Cocoa production under the previous administration 778,000 metric tonnes, which was a shortfall of 72 tonnes of the targeted 850 tonnes.

Meanwhile, the Chief Executive Officer (CEO) of COCOBOD, Joseph Boahen Aidoo, said Ghana ‘s cocoa production is expected to hit two million (2m) metric tonnes by 2019.

According to Satista.com, cocoa production in the 2014/2015 season was 740.000MT, and the 2015/2016 season was 778.000MT.

However, the 2016/2017 season saw an increase to 970.000MT, but was further declined in production from 970.000MT to 880.000MT in 2017/18 season, thus it is gradually killing the interest of Ghanaians in cocoa sector.

Below is the year-on-year statistics by Statista.com

2014/2015 – 740.000MT
2015/2016 – 778.000MT
2016/2017 – 970.000MT
2017/2018 – 880.000MT

Cocobod CEO Joseph Boahen Aidoo said in an interview with Reuters that “Output by the number 2 grower of cocoa, Ghana was falling short.

“The high price has led to a 2 billion cedi deficit at Cocobod, and in January the government proposed cutting the price, pegging it to 70 percent of world market prices. However that plan is subject to approval by President Nana Akufo-Addo.

Personally, I see it as a very tall order and a tough call for the President because it hinges on sustainability of the industry.”

Surprisingly, when COCOBOD was crying over lack of funds as a result of declining world market prices, they were able to raise over Gh¢ 1million for the renovation of the residence of the minister for Food and Agriculture.

The question is, is the minister’s comfort a priority over the welfare of our Farmers?

The standard of living has become hard and the price of everything in the economy has gone up, meanwhile the income of the hard working cocoa farmer has remained static nominally, and decreasing in real terms. So, while the cost of living is rising, the real incomes of farmers are dwindling.

The real producer price after accounting for inflation, declined by 16% in 2017 and further down by 8% in 2018. So cumulatively, the real price paid to cocoa farmers diminished by 24% from 2016 up till today.

So the decision to maintain cocoa prices in these hard times, the cocoa farmer is far worse off than he was in 2016. Why should government in the first place fail to improve the welfare of the farmer whose labour brings value to the entire country?

According to Send-Ghana, “Governments have for years failed to meet Comprehensive Africa Agriculture Development Programme obligations and invested less than 10% of its annual expenditure in agriculture. According them, more than half (51.2 percent) of the Ministry of Food & Agriculture projected expenditures in 2019 are set to be sourced from donors.

“With Ghana’s attainment of lower middle income status, donor support may start to dwindle. To make Ghana self-sufficient and attain a Ghana Beyond Aid as well as Sustainable Development Goals 1, 2 and 17.1, (i.e., no poverty, no hunger and strengthened domestic resource mobilization), government must find a sustainable way to fund and implement its own capital investments.”

Cocobod said the current total national capacity was woefully inadequate to generate the needed revenue to support national development, thus they are resolve to work tirelessly to put pragmatic measures and other innovative programs and policies in place to achieve that.

Meanwhile, let us not forget that Farmers are not expanding their cocoa farms like before. Others are cutting it down to make way for other purposes. This means that, the uncountable tonnes of cocoa the government needs for export may not be met. You know, cocoa farms are shrinking while rubber is getting the expansion.

This is because, CAL has recently received several complaints from cocoa farmers across cocoa growing regions of Ghana about the unusual delays in payments for their produce. Farmers who sell their produce to the Produce Buying Company (PBC) and other local License Buying Companies (LBCs) are the most affected.

We further observed that, COCOBOD has either refused, neglected or failed as it is obligated to allocate the local LBCs portions of their annual syndicated loan for the 2018/2019 crop season, thus the Local LBCs are being compelled to solicit for loans from banks at considerably higher interest rates to buy produce for this season.

Again, in cases where the LBCs have taken loans, purchased and delivered cocoa beans to COCOBOD, COCOBOD has failed to pay these local LBCs. These developments explain the unusual delays in paying cocoa farmers this crop season, which signals a negative effect on the cocoa production in the country.

So this tells clearly that, there is a shift commodity cultivation of cash crops for export and Ghana may lose it position on the world as one of the leading cocoa producers and exports.

About CAL;
Centre for Agro Liberty (CAL) under ILAPI – Ghana), is a Ghanaian based free market and policy Think Tank whose mission is to provide innovative economic research and pensive multidisciplinary public policy advocacy through intellectually inspired leadership to help create freedom and prosperity for a free society. You can visit our website on www.ilapi.org

Signed:

Ernest Danso Abiam,
Director – CAL
0244033571

Samuel Adjei Kwarteng,
Co-Director – CAL
0246330513

Leave a Comment

Your email address will not be published. Required fields are marked *