Pay farmers 70 per cent of FOB price of cocoa
The Minority in Parliament has called on the government to, as a matter of urgency, pay Ghanaian cocoa farmers at least 70 per cent of the free-on-board (FOB) price of cocoa.
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They argued that the steep depreciation of the cedi against the dollar, high cost of living and increase in cocoa prices on the world market were enough justification to ensure that the farmers received their due for their labour.
The Minority Spokesperson on Agriculture, Dr Owusu Afriyie Akoto, made the call at a press conference in the Sefwi Wiawso Municipality in the Western Region.
He said any attempt by the government not to pay the 70 per cent FOB prices would be amount to reneging on its own promise made to the hardworking farmers and also hoodwinking them.
Explanation
Explaining the basis for the argument, Dr Akoto, who is also the New Patriotic Party (NPP) Member of Parliament for Kwadaso, noted that in 2013, the government did not increase the prices for the 2013/2014 farming season because of the cedi depreciation of over 20 per cent between the time the producer price was announced and the opening of the new cocoa season.
He added that a close examination of cocoa prices on the international market for the relevant marketing periods did not confirm a drop in dollar prices to justify such punitive decision against cocoa farmers.
“On the contrary, the sharp depreciation of the cedi, more than 20 per cent in 2013 and 40 per cent so far this year 2014, was a strong basis for an increased in the local basis for an increased in the local prices paid to cocoa farmers”, he added.
Prices
Dr Afriyie said it was imperative that the government restored the policy of awarding cocoa farmers at least 70 per cent of the FOB price.
“At today’s world prices and exchange rates, this means that prices paid to producers should be more than double from the current Ghc3, 392 per metric tonne (Ghc 212 per 64kg bag), to Ghc7,665 (Ghc 479 per bag) equivalent to a rise of 126 per cent.
Cocoa Smuggling
Another argument advanced by the minority was that a 64 kilogramme bag of cocoa was selling at around GHc 400 in Ivory Coast as compared to Ghc 212 in Ghana.
“That price is about 100 per cent more than the price of the same commodity in Ghana. Without a substantial revision upward in local producer prices, the continued depreciation of the cedi would encourage more smuggling of Ghana’s cocoa to our neighbours”
Export Prices
Dr Akoto said the current exchange rate of the cedi to the dollar is Gh¢3.80 to $ 1, thus, the FOB export price was equivalent to Gh¢10,950 per metric tonne adding that this compared at the current fixed price paid to the farmer of Gh¢3,392 per metric tonne which was equivalent to only 31 per cent of the stipulated FOB price of cocoa.
“At the current price, the cocoa farmer in Ghana is paid less than a third of the current FOB export price contrary to the government’s own avowed target of at least 70 per cent of the world market price of cocoa,” he added.
NDC/President Promises
He described the current prices to the farmers as a betrayal of the promise in the National Democratic Congress (NDC) manifesto, page 53, which stated that the party would ensure that cocoa farmers got a minimum of 70 per cent of the FOB export price for their crop.
Dr Akoto said same page 53 of the 2008 manifesto of the governing- NDC which stated that “the 70 per cent price will not include the cost of coco diseases and pest control, coco roads, COCOBOD scholarships, hi-tech production and bonuses”
Contrary to all the above promises to the cocoa farmers in the country, the NDC was paying not at least 70 per cent but a meagre 30 per cent.
