Bloomberg News

Ghana Cocoa Farmers Pressure Board for More Money as Prices Fall

June 10, 2012

Ghana’s cocoa-industry regulator is facing calls from some farmers in the world’s second-biggest grower who want to be paid more for their crop, even as global prices have dropped 20 percent over the past year.

The Ghana Cocoa Board “must and can do something to increase the producer price for us,” said Nicholas Kobina, an 80-year-old chief farmer who said he supervises more than 40,000 growers in Ghana’s Western region, which produces about 55 percent of the country’s annual crop.

Cocoa, Ghana’s second-biggest export after gold, is expected to decline by 13 percent this season to 890,000 metric tons, according to Ecobank Transnational Inc. (ETI), based in Lome, Togo. Declining world prices for the chocolate ingredient mean some farmers may stop growing cocoa and turn to other crops such as rubber, according to the Accra-based, state-controlled board, known as Cocobod.

The West African nation should end subsidies on fertilizers and a spraying program where farmers are given disease- and pest-controlling chemicals for free and use the savings to pay a higher price for the beans, Kobina said.

The “government must stop the mass spraying exercise and pay that mass of money on to the producer price,” said Nana Paul Kodjoe, a 73-year-old farmer who heads a group of 1,000 growers in Jomoro, 260 kilometers (161 miles) west of Accra. Farmers don’t always benefit from the Cocobod-organized spraying because of problems in the program including corruption, he said.

Not Feasible

The current rate of 3,280 cedis ($1,710) a ton was set at the start of the 2011-12 season in October. Cocoa for December delivery gained 0.6 percent to 1,530 pounds ($2,366) per ton by 7:47 p.m. in London on June 8.

“If government pays 4,000 cedis per ton we will be happy, the sector will be more lucrative and attractive,” Kobina said. “Farmers will buy their own inputs and produce more.”

The request by the farmers to end subsidies is “not feasible and cannot happen,” Noah Amenyah, Cocobod’s spokesman, said by phone on June 6.

The board spent about 18.8 million cedis in 2009 and 2010 on chemicals to prevent fungus and pests, he said. Cocobod pays a 44-cedi subsidy on a 50-kilogram (110-pound) bag of fertilizer, leaving farmers to pay 33 cedis, Amenyah said. Even at that price, some growers complain about the expense, he said.

Without the free chemical spraying, small-holding farmers “will not be able to spray their cocoa and will end up reinfesting neighboring farms which would have been sprayed and render the whole process useless,” Amenyah said.

Production rose to a record of more than 1 million tons in 2010-11 amid good weather and as investment the government- funded programs curbed the spread of fungus and insects, according to the board.

To contact the reporter on this story: Ekow Dontoh in Accra at edontoh@bloomberg.net

To contact the editor responsible for this story: Emily Bowers at ebowers1@bloomberg.net


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