Ghana’s government raises cocoa prices by 63%, supporting key agricultural communities
Cocoa farming in Ghana and Ivory Coast remains a key industry (pic, ICAM)
A breakthrough in cocoa farmer pay has been achieved in Ghana, as the government has raised state guaranteed prices by a total of 63% in an active bid to raise income standards and tackle crop smuggling to neighbouring countries, writes Neill Barston.
The landmark move, reported initially by Reuters, comes as the region has faced significant supply chain challenges in the wake of the Covid-19 panic and cost of living crisis worsened by the Ukraine war, leaving many agricultural communities significantly negatively impacted.
As part of the new deal, President Nana Akufo-Addo reportedly said that farmers will now be paid 20,943 Ghana cedi ($1,837) per tonne for the upcoming 2023/24 season, against the 12,800 they received for the previous year. It was reported that at the launch of the initiative, that this represented the highest settlement for farmers in the past 50 years, and comes as the region faces a deficit of cocoa supplies amid challenging growing climate conditions.
The issue of creating a living income for farmers across Ghana and Ivory Coast has remained a key issue for the industry in recent years, with many farming communities expressing direct concerns at the level of challenges faced, with many previously earning below UN-defined poverty level payment of around $1 a day.
Consequently, the pay rise move was also reportedly aimed at preventing illegal smuggling of cocoa to neighbouring countries, where supplies may fetch a higher price, which remains a concern for industry observers amid a drive to deliver greater transparency within supply chains to protect producing communities.
As recently reported by Confectionery Production, an Oxfam report noted that the Covid-19 pandemic had left farmers in Ghana around 16% worse off, with the majority of respondents from these communities in its study expressing concern that they were struggling to make ends meet.
Significantly, the fresh pay deal for Ghana’s cocoa farmers follows in the wake of a reported 12-year high on the New York exchange for cocoa, with crops trading at more than $3,000 a tonne. This followed an even larger record of a 46-year high on London markets, as the commodity soared in value do to a reported supply shortage in meeting the global demand for chocolate and wider confectionery products.