Government has been advised to maintain the producer price of Cocoa for the season if it cannot increase the price, failure of which will result in massive demonstrations across the country.
President of Amansie West (CCP) Co-operative Cocoa Farmers and Marketing Union Ltd, Rev Thomas Oppong, says reducing the producer price of Cocoa may discourage farmers, adding that cocoa farmers in the country are poor yet they support the economy greatly.
Rev Oppong told Boss Fm’s Nana Afia Broni in an interview that adjusting the Cocoa price downwards as directed by the International Monetary Fund(IMF) will bring hardship to the already suffering Cocoa farmers in the country because there are large number of farmers who are into Cocoa cultivation and so that will mean that they will not be happy as cocoa farmers.
The International Monetary Fund (IMF) has advised the government to adjust the producer price of cocoa to reflect changes in international cocoa prices.
According to the IMF, the downward adjustment had become necessary because the Ghana Cocoa Board (COCOBOD) was grappling with a funding gap of GH¢1 billion due to the government’s inability to reduce producer prices paid to cocoa farmers at a time global prices of the crop had been falling.
In its seventh and eighth review documents under the recently concluded Extended Credit Facility (ECF) Programme, the IMF explained that the adjustment was needed to save COCOBOD from expanding the financing gap.
“The state-owned cocoa marketing company (COCOBOD) is also experiencing difficulties,” the IMF said in one of the documents that were released this month.
COCOBOD faces an estimated financing gap of GH¢1 billion (0.3 per cent of gross domestic product) in the current crop year.
“In (IMF) staff’s view, producer prices should be adjusted to reflect changes in international cocoa prices,” it said.
The fund said although the government and COCOBOD were taking appropriate measures to provide some temporary relief, “more is needed to strengthen COCOBOD’s financial position
Before the commencement of a cocoa season, mostly in October every year, COCOBOD normally announces a farmgate price – the producer price – that it will pay to farmers for their beans in the crop season.
That price was last increased by 11.76 per cent in October 2016 to cover the 2016/2017 season.
Since then, it has remained unchanged at GH¢7,600 per tonne, translating into GH¢475 per bag of 64 kilogramme (kg) gross weight.
Within the same period, however, the price of cocoa on the international market suffered a tumultuous fall, dropping from an average of US$2,500 per tonne in November 2016 before ending that year at US$2,287 per tonne, according to the International Cocoa Organisation (ICCO).
But reacting to this directive by the IMF, Rev Thomas Oppong said the government will face their wrath if it adjust the producer price of Cocoa downwards.
He said Cocoa farmer in the country deserve to be treated better as they bring millions of cedis into the country’s economy.
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