The 2019/20 cocoa season begins in October (next month) and farmers are anxiously waiting on the Nana Addo gov’t for the determination of the producer price of cocoa for the season.
The Ghanaian cocoa farmer has, within the past three years of Nana Addo’s rule, been famished and exposed to extreme penury to the extent that most cocoa farmers have had to pawn their cocoa farms in order to survive under the current excruciating economic conditions in Ghana.
To arrive at a fair and realistic farm gate price for the cocoa farmer, successive governments have considered some critical factors including, inter – alia, the cost of living, the FOB price of cocoa, the premium receipts for the delivery of the best quality cocoa in the world, the exchange rate and operational cost.
In the face of rising fuel prices, increased communication tax, upwards review of health insurance registration fees, increased water and electricity tariffs fanning inflation, the REAL INCOME of the cocoa farmer who has lived on stagnated nominal income for three years under Nana Addo’s government, has fallen significantly. For example, in 2016, a bag of cocoa was purchased at GHC 475 and a bag of cement was sold at GHC 22 in the Western Region. The cocoa farmer with a bag of cocoa during Mahama’s era could buy 22 bags of cement. Today, under Nana Addo’s government, the same farmer with the same bag of cocoa can buy ONLY 13 bags indicating a loss of 9 bags of cement. The need for a realistic farmgate price for the cocoa farmer is, therefore, a legitimate call, which must be heeded by every sensitive government.
The FOB price of $2300 secured for the 2019/20 crop year is higher than the2018/19 price of $2200.Even the argument that the world market price has declined, making an upward review of farm gate price impossible has lost its potency in the face of galloping exchange rate. To demonstrate this point, we wish to compare cocoa inflows in 2016/17 and 2019/20. We should be mindful of the fact that Ghana through forward-sales, has sold the 2019/20 produce though we are yet to harvest.
2016/17
FOB price+Premium $2950
(Per tonne which is 16 bags)
At $ 1 to GHC 3.9
Value in GHC 11,505
2019/20
FOB price-Premium $2300
(Per tonne which is 16 bags)
At $ 1to GHC 5.3
Value in GHC 12,190
The above illustration clearly establishes the point that the NPP government is raking in more revenue from cocoa than we did.
Ghana produces the best quality cocoa in the world and as such attract a premium from buyers of our cocoa. For the past 3 years that the NPP government has been in office, It has received $577,250,000 as premium payments on our cocoa. This comes in as surplus and additional income independent of the syndicated cocoa loan. Unfortunately, the utilisation of this huge amount is shrouded in secrecy.
In an earlier presser, we argued that the investment in quality cocoa is entirely the work of the farmer so why is the government denying them the fruit of their own labour?
Had the government added the premium receipts to FOB price of cocoa, the farm gate price of a bag of cocoa as at today would have been not less than GHC 800.
We must not forget that President Rawlings exited office with a producer price of cocoa of GHC 20.17 per a bag of 64 kilos.
President John Agyekum Kufour left the seat of government with a per bag price of ghc102 indicating that for the entire 8 years of President Kufour, GHC 80.03 was added to the price.
President Atta Mills exited when the farm gate price was GHC 212. This means that in 4 years president Mills added GHC 110 to the price of a bag of cocoa.
President Mahama left office with a per bag farmgate price of ghc475 indicating an increase of ghc263 over his 4 year period.
President Nana Addo Danquah Akuffo Addo has been in office for 3 years and our sources from COCOBOD states that the president will on 1st October 2019 announce a new farm gate price of ghc500. This would mean that President Akuffo Addo will add ghc25 to the price for the period of 3 years.
Are we making progress or retrogressing?
It must be stated that any price below ghc800 will be unfair, unrealistic and a demonstration of insensitivity to the plight of the Ghanaian cocoa farmer.
We urge government to, as a matter of urgency, Reduce the over-bloated office expenditure so that cocoa farmers can have a sigh of relieve.
Signed:
Hon.Eric Opoku
Ranking member on Agric, Food and COCOA Affairs