Government maintains producer price of cocoa
The government has maintained the producer price paid to cocoa farmers at GH¢3,392 per tonne, despite a consistent fall in the price of the crop on the international commodity market. This means that the government will lose about 62 per cent of its share of the export tax on the free on board (FOB) price to be able to pay the new producer price to farmers in the ongoing 2013/2014 cocoa season.
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A deputy Minister of Finance, Mr Cassiel Ato Forson, who disclosed this in Accra yesterday, said the decision to maintain the price showed the government’s commitment to the agricultural sector.
The current price was announced after the Producer Price Review Committee (PPRC), made up of the Minister of Finance, representatives of the Ghana Cocoa Board (COCOBOD), cocoa farmers, among others, had completed their annual review meetings.
Neighbouring Cote d’Ivoire, which is the largest producer of the crop, raised its farm-gate price (the equivalent of the producer price in the case of Ghana) to a corresponding GH¢3,224 per tonne from GH¢3,009 per tonne a year ago.
Mr Forson said the country’s price of GH¢3,392 per tonne was decent enough to prevent people from smuggling the beans across the border to Cote d’Ivoire.
A lower producer price always serves as a disincentive to growers and buyers of the crop, thereby causing some to smuggle it to neighbouring countries that offer comparatively higher prices.
The world price of cocoa has fallen from about US$2,639 at the beginning of the year to US$2,431 in mid-October, this year and that has caused the government to lose a substantial amount of revenue in export earnings.
This consistent dip in the price of the crop came after it had risen significantly over the past years, which motivated the government to raise the producer price paid to farmers five consecutive times.
The President of the Cocoa, Coffee and Sheanut Farmers Association (COCOSHE), Alhaji Alhassan Bukari, said in a separate interview that his outfit was impressed by the government’s decision to maintain the price, despite the difficult situation in the industry.
The deputy Minister of Finance added that the committee also approved a two per cent reduction in other fees and rates paid to some stakeholders in the industry.
He mentioned hauliers’ rate, warehousing and internal marketing fees, as well as fees for disinfestation, grading, sealing and scaling, as some of the areas that suffered the two per cent reduction.
The buyers’ margin was, however, maintained.
By Maxwell Adombila Akalaare/Daily Graphic/Ghana