The producer price of cocoa has been reviewed upwards from GH¢3,392 to GH¢5,520 per tonne for the 2014/2015 cocoa season.
The new price is an increase of GH¢2,128 over the previous price, representing a 62.74 per cent rise.
The upward review has thus revised the price per bag of 64 kilogrammes to GH¢345, from the old price of GH¢212.
The new price takes effect from today, Friday, October 3, 2014 when the 2014/2015 season opens.
The Minister of Finance, Mr Seth Terkper, who announced this at a press conference in Accra yesterday, said the increment represented about 75 per cent of the net free on board (FOB).
Bonuses
He said the government and the Ghana Cocoa Board (COCOBOD) had also decided to pay bonuses to farmers at the time of sale of their produce, adding, “Accordingly, an additional amount of GH¢5 per bag of 64kg gross weight has been approved.”
“Therefore, for each bag of 64kg gross weight of cocoa sold by the farmer, he shall be paid GH¢345 per bag plus GH¢5 as bonus,” he said.
He, therefore, entreated licensed buying companies (LBCs) to take note of the new arrangement and pay farmers accordingly.
Mr Terkper, who is also the Chairman of the Producer Price Review Committee (PPRC), urged farmers to insist that they be paid GH¢350 per bag of 64kg gross weight at the time of sale, which includes the bonus.
The increment brings the price and the bonus per tonne of cocoa to GH¢5,600 (US$1,750), which is equivalent to 76 per cent of the net FOB.
He recounted that the last two seasons had seen the average FOB prices of cocoa used for the review of the producer price declining from US$3,000 in 2011/2012 to US$2,300 in 2012/2013, adding that the 2013/2014 season even experienced a further decline in the price to US$2,130 per tonne.
The government, he said, was compelled to drastically reduce its share of the 2013/2014 cocoa export duty in order to raise the producer price paid to cocoa farmers.
That decision, he said, was taken to increase the earnings of farmers to enhance their welfare.
Positive developments
“There have been positive developments on the world cocoa market since the last review of the producer price in October 2013.
“It is against these positive price developments that the PPRC met and decided on an upward review of the producer price,” he explained.
Mr Terkper said during the 2008/2009 crop year, the government set up a Stabilisation Fund with annual contributions from the FOB price as a risk mitigating mechanism against a fall in international cocoa prices.
The primary objective of that fund, he said, was to apply it to sustain the earnings of cocoa farmers in challenging times, as was experienced during the 2013/2014 cocoa season.
“The PPRC has decided once again to re-establish the Stabilisation Fund to be able to cushion farmers should the world market price begin to decline as we move into the future,” he said.
In a related development, Mr Terkper also announced that the PPRC had approved other rates and fees for all other stakeholders in the industry.
These include buyers’ margin, hauliers’ rate, warehousing and internal market costs, as well as fees for disinfestation, grading and sealing.
Social interventions
He said the government would continue to support other interventions, including the mass spraying and the fertiliser application programmes, to increase the productivity of cocoa farmers.
Other interventions, he said, were the rehabilitation and replanting of cocoa farms, the provision of 50 million free improved seedlings to farmers over the next three years to help replant diseased-infected trees that would be removed over the period.
“To enhance the welfare of our cocoa growing communities, the government is supporting COCOBOD to expand its cocoa roads rehabilitation programme. COCOBOD has also put in place a child educational support programme which aims at building schools and libraries in deprived cocoa communities,” he said.
The government, he said, would continue to support COCOBOD to play its role as a major contributor to the economic development of Ghana.
Optimistic projection
The Chief Executive Officer of COCOBOD, Dr Stephen Opuni, said a projection of 850,000 metric tonnes had been made but expressed optimism that with the good rains experienced, coupled with other favourable factors, the projection could go beyond one million metric tonnes.
On the issue of the illegal adjustment of weighing scales by purchasing clerks, he said that issue was of a major concern to COCOBOD and the LBCs, adding that the two bodies had met and decided that any clerk found culpable would be handed over to the police for prosecution.
The Deputy National Chief Farmer, Nana Adjei Damoah, described the increase in the producer price of cocoa as “a booster price” and unprecedented.
He said the government and COCOBOD were doing well to make cocoa farming lucrative and attractive to the youth.
He, therefore, urged cocoa farmers to accept the new price and be encouraged to work harder to exceed the national projection.
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