In the ever-essential cocoa industry, a stark contrast emerges between the producer prices set by the previous National Democratic Congress (NDC) government and the present New Patriotic Party (NPP) administration.
The review of the producer price of cocoa for the 2023/24 season under President Akufo-Addo’s government, has sparked debates and discussions among stakeholders.
The world market price per ton of cocoa currently stands at an impressive Ten thousand dollars ($10,000). This corresponds to a world market price per ton of 130,000 Ghana Cedis (GH¢ 130,000) or GH¢ Eight thousand one hundred and twenty five (8,125) per bag of cocoa (16 bags per ton).
Analyzing the distribution of this price between farmers and the government reveals interesting figures.
Comparing the figures with the NDC’s price determination formula for the 2016/2017 season, when the F.O.B price per ton (world market) reached Two thousand nine hundred and fifty dollars ($2,950), we can observe a significant increase in the current price structure.
During that time, the F.O.B price per bag was Seven hundred and nineteen Ghana Cedis (GH¢719), with the farmer’s share at Four hundred and seventy five (GH¢475) and the government’s share at Two hundred and forty four Ghana Cedis (GH¢244).
Under the current regime, farmers receive a larger share of Two thousand and seventy Ghana Cedis (GH¢2,070) per bag (25.47% of the total price), while the government’s share per bag has increased to Six thousand and fifty five Ghana Cedis (GH¢6,055) representing (74.53% of the total price).
This represents a considerable shift in favour of the farmers, with a higher percentage allocated to them compared to the NDC. In contrast, the NDC government allocated 66.06% to farmers and 33.94% to government when cocoa prices were lower.
These changes in the distribution of the producer price of cocoa have been welcomed by farmers, as it is seen as a significant improvement in their income. However, stakeholders remain divided on whether these measures will be sustainable in the long run, considering fluctuations in the world market price of cocoa and the impact on the government’s finances.
It is worth noting that cocoa is a critical export commodity for Ghana, and any decision regarding producer prices has a direct impact on the livelihoods of thousands of small-scale farmers. As both the NDC and NPP governments recognize the importance of the cocoa industry, their approaches to price determination have differed, with the current government prioritizing a larger share for farmers.
As the cocoa industry continues to play a vital role in Ghana’s economy, the debate surrounding producer prices and their impact on farmers and the government’s finances will persist. It remains to be seen how future administrations will navigate these challenges to achieve a fair and sustainable pricing structure for cocoa producers.
