New cocoa prices motivation for farmers
Last week Wednesday, the government announced an unprecedented 129.36 per cent increase in cocoa prices for the 2024/25 season.
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Cocoa prices at the farm gate was increased from GH¢20,928 at the beginning of the 2023/2024 season to GH¢48,000 for the 2024/2025 season which commenced on September 11.
The Daily Graphic believes this bold decision is a milestone in the country's efforts to improve the cocoa industry and the livelihood of farmers. This is a clear testament of the government's commitment to the welfare of cocoa farmers.
It's a decision that deserves commendation, particularly in the light of the extreme volatility witnessed in the global cocoa market over the past year.
Cocoa prices on the world market soared from US$2,000 per tonne in March 2023 to a staggering US$12,072 in February 2024. It, however, dropped to US$7,960 by September 2024.
The country nevertheless did not benefit much from this price boom because the cocoa regulator, COCOBOD, had already sold majority of the cocoa beans on forward sales contacts ranging from $2600 to $2700..
However, in response to the price surge, the government increased the price of cocoa from GH¢20,928 to GH¢33,120. Such wild fluctuations underscore the precarious nature of the cocoa market and the challenges faced by producing countries.
The paper is of the view that this price hike is a significant step towards realising the country’s vision of improving the livelihood of farmers who put in so much effort to secure the country’s spot as the second largest cocoa producer in the world.
It not only provides immediate relief to farmers but also sends a strong signal about Ghana's commitment to its cocoa sector.
However, as we celebrate this development, we must consider its long-term implications. Will this price increase be sustainable if global prices fall further? How will it affect Ghana's competitiveness in the global market? These are questions that demand careful consideration.
Moreover, while the price increase indeed calls for celebration, it should be seen as part of a broader strategy to motivate the farmer to further improve yields.
Other areas the country should prioritise in its efforts to increase production is the improvement of infrastructure, promotion of sustainable farming practices and diversification of the agricultural sector.
With COCOBOD yet to raise its annual syndicated loan, many have expressed concern about how it intends to buy the cocoa beans from the farmers.
It will be recalled that the management of COCOBOD earlier announced that it was breaking away from the 32-year cycle, and would therefore not be raising money from the international capital market this year.
This was, however, clarified by the Minister of Finance who explained that COCOBOD would be raising about $600 million from the syndication to complement its own resources to finance the new season.
But with the syndication yet to come in, and the new season already started, market watchers have raised issues over how farmers would receive prompt payments for their cocoa beans.
The Minister of Food and Agriculture, Bryan Acheampong, has, however, assured all stakeholders that COCOBOD was positioned financially to buy the crops from farmers and trade same, stressing that neither the government nor COCOBOD had reported that it had no money to purchase cocoa beans from the farms.
With these pieces of information therefore, the Daily Graphic expresses the hope the farmers will receive payments for their produce promptly.
As the 2024/25 cocoa season opens, there is a sense of optimism among Ghana's cocoa farmers because they see this price hike as offering them the much-needed respite and motivation to continue their hard work.
This historic increase in cocoa prices is a bold move that demonstrates the government's commitment to the sector.
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However, the true measure of its success will be in its long-term impact on the lives of farmers and the sustainability of Ghana's cocoa industry as a whole. Our hope is that this would mark the beginning of a new era of prosperity for Ghana's cocoa sector.