Opinion: Raw deal for cocoa farmers in Ghana
By Hon Dr Owusu Afriyie Akoto, MP KWADASO
The Government has announced a producer price for cocoa farmers in the current 2013/14 (Oct – Sept) crop season. At GH¢3,392 per metric tonnes, the price is the same as that paid during the 2012/13 season.
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For the last nine years or so, cocoa producer prices have been raised at the beginning of every buying season. Indeed, there were two instances where prices were revised upward within the buying season (2007/08 and 2009/10).
This is, therefore, the first time in nine years that the government has broken this practice and decided not to increase the producer price of cocoa.
With rising inflation and a substantial depreciation of the domestic currency, the Cedi, the decision not to increase the producer price means a sharp reduction in the real price and income of nearly one million cocoa farm families of this country.
The living standards of cocoa farmers and their families would suffer a significant drop. This situation is simply not acceptable, given the enormous contribution cocoa farmers continue to make to the economy of this country.
At a press conference on Friday, October 18, 2013, the Deputy Minister of Finance and Economic Planning, Hon. C. A. Forson, was reported to have stated that the price of cocoa on the international market had fallen and hence the decision not to increase the cocoa producer price this year. This explanation cannot be allowed to go unchallenged.
As had been the standard practice, Ghana sold the bulk of the 2011/12 harvest against prices prevailing on the international (London) trading months January-April, 2012.
Similarly, it sold the bulk of the 2012/13 harvest against prices prevailing during the international (London) trading months January – April, 2013.
The average price on the London Terminal Market (LIFFE) in the period January – April, 2012 was US$2,323 per metric tonne and that for January – April, 2013 was US$2,230. Hence, there was only a marginal decline of US$93 between the two periods. This represents an insignificant decrease of four per cent.
In international commodity trading terms, a marginal decline of four per cent is considered only a blip and it cannot be used as an excuse to deny nearly a million poor smallholding farmers their rightful livelihood. In fact, prices have been rising since the first quarter of 2013, and stood at US$2,760 in mid-October, 2013.
As mentioned earlier, since farmers are paid in the local currency, one should examine the exchange rate of the cedi against the US Dollar, the currency in which cocoa is traded on the international markets. It is a fact that in October, 2012 the US Dollar was fetching GH¢1.50 and is currently fetching GH¢2.20 (October 2013). This represents a depreciation of the value of the cedi by 31.8 per cent. So compared to the movement of the dollar price on the international market, the farmer more than deserves an increase in the cedi price which the government pays for his cocoa.
The government should come again with a better explanation as to why it is denying poor cocoa farmers a deserved increase in their producer price.
The unfairness of the government’s decision also hangs on the fact that inflation has been rising in the past 12 months, and given the fiscal and other macroeconomic indicators, the rate of inflation is likely to accelerate in the coming year.
It is presumed that government has awarded salary increases of 10 per cent to public sector workers in lieu of the expected increase in inflation. And the same government does not think cocoa farmers deserve an adjustment in the producer price for the deterioration of macroeconomic conditions in the country?
What makes the plight of cocoa farmers even worse is the recent unannounced cut back in the agronomic support programmes which they have enjoyed since 2001/2002. These are the hi-tech and mass spraying and Free seedling programmes.
Contrary to what the deputy minister announced to the world on October 18, 2013, there has been a sharp reduction in these programmes.
Until the 2011/12 crop season, cocoa farmers were provided with 22 million bags of fertiliser every year under the hi-tech programme. Last year (2012/13), farmers were supplied with only 500,000 bags of fertiliser.
Similarly, under the mass spraying programme, cocoa trees were sprayed six times in a year for effective control of swollen shoot disease, and three times for the control of black pod and capsid diseases. If not effectively controlled, these endemic diseases could cause a severe reduction in cocoa yields and production.
Unfortunately, in the past two crop seasons, there has been a substantial cut-back in the mass spraying programme. In 2011/12 mass spraying against the incidence of swollen shoot was reduced to four times and then to only two times in 2012/13.
Mass spraying to control black pod and capsid diseases has suffered a similar fate. Up to 2010/11, cocoa trees were sprayed three times per year. In 2011/12 that was cut to two times a year and in 2012/13 only once. Indications are that the two mass spraying programmes may cease altogether during 2013/14.
Daily Graphic/Ghana
A version of this article appears in print on November 8, 2013, on page 17 of the Daily Graphic with the headline: Raw deal for cocoa farmers in Ghana
