COCOBOD will not heed the advice of the IMF to reduce the price of cocoa

The Ghana Cocoa Board (COCOBOD) has said that it will not heed the call by the International Monetary Fund (IMF) to reduce the producer price of cocoa.

Chief Executive Officer of COCOBOD, Joseph Boahen Aidoo

According to the Chief Executive Officer of COCOBOD, Joseph Boahen Aidoo, even though the call “makes economic sense” any attempt to “reduce the price by even GH¢5 will spell doom for the industry.”

He explained that such a reduction will motivate farmers to give their farmlands for illegal mining, rubber and cashew plantations to the detriment of the cocoa industry.

His comments come after the IMF admonished the board and the government to reduce the producer price of cocoa to reflect global trends.

The fund said the reduction was necessary to ensure that COCOBOD did not expand its financing gap estimated at GH¢1 billion.

However, Mr Aidoo said this justifies the board’s decision to maintain the price paid to cocoa farmers at GH¢7,600 per tonne for two years in a row at a time prices of the crop had fallen by an average of 40 percent on the world market.

He explained that unlike other cocoa producing countries, Ghana’s cocoa sector was competing with illegal mining, cashew and rubber plantations for the same land.

He added that the low productivity in the sector has led farmers to give their cocoa farms for other ventures that could fetch them comparatively higher incomes.

“When you go to Weichi in the Brong Ahafo Region, the large tracts of cashew farms you see there now used to be cocoa farms, but because of the low productivity and loss of interest in cocoa farming, farmers started converting their farms to cashew farms.”

“So the justification (for maintaining the price) is that we had to actually put measures in place to sort of bring a break to the way the industry was losing land to illegal mining. Because if the price of cocoa had been reduced in 2017 by even GH¢5, when cocoa prices on the world market fell by more than 40 percent, most cocoa farmers would have sold their land to illegal miners,” he added.

He also stated that in the unlikely event that prices fall below a danger level, the board, the government, and the farmers “will have to sit and take a decision.

Until then, Mr Aidoo said, the board and the government would continue to keep the price at GH¢7,600 per tonne while intensifying the productivity-enhancing programmes (PEPS) to help protect farmers’ incomes.

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