Ghana Cocoa Board (Cocobod) has dismissed suggestions by the Minority in Parliament that government is unfairly treating cocoa farmers in the face of a decline in international prices.
At a press conference in Accra on Wednesday, Minority Spokesperson on Food, Agriculture and Cocoa Affairs Eric Opoku demanded immediate usage of the Cocoa Stabilisation Fund created under John Dramani Mahama.
But in a response, Cocobod said the Fund was established in the 2007/2008 cocoa season and just as it was activated in 2014, it will be activated this year though there is a long-term vision between Ghana and Cote d’Ivoire to ensure better pricing of the cash crop.
Below is the Cocobod response:
RE- MINORITY PRESS CONFERENCE ON COCOA
Ghana Cocoa Board (COCOBOD) wishes to clarify issues raised in a recent press conference on cocoa by the Minority in Parliament.
Increase in Producer Price of Cocoa
According to the press statement, Hon. Joseph Boahen Aidoo is purported to have said that cocoa prices will not be increased due to the fall in world market price of the commodity. We will like to explain that, as indicated in the statement by the Minority, the Producer Price Review Committee is the only body mandated by law to set price of cocoa, and the Chief Executive has already reiterated that at various fora.
Cocoa Stabilisation Fund
We would like to put it on record that the Stabilization fund was established during the 2007/08 cocoa season. Government set up the Fund as part of measures to guarantee stable income for cocoa farmers. In other words, the Fund was meant to maintain the prevailing producer price in the event that the net FOB price falls drastically, as being experienced now, so that Government does not reduce the producer price.
The creation of the Fund, therefore, underpins Government’s commitment to reduce the exposure of cocoa farmers to price volatility on the world cocoa market.
It is, therefore, unfortunate to assume that the Fund was set up to increase producer price. The Stabilization Fund is rather a standby Fund which ensures that irrespective of how low cocoa prices fall on the world market, Ghanaian farmers do not suffer a reduction in producer price.
We also wish to put on record that in the 2012/13 and 2013/2014 crop seasons, following a drastic fall in world prices of cocoa, COCOBOD used the stabilisation to maintain the producer price of cocoa per tonne at GH¢3,392.00. It is, therefore, not out of place for COCOBOD to take similar measures in the 2017/18 crop season to avoid a total collapse of the cocoa sector and to sustain cocoa farmer’s interest in the industry.
The Stabilization Fund, therefore, is neither to be used to increase producer price nor pay bonuses as stated by the Minority in Parliament, but rather as the name implies to stabilise prices to the farmers.
The producer price of Gh¢7,600.00 per tonne of cocoa announced at the beginning of the 2016/2017 crop season has not, and will not be reviewed downwards as being speculated, despite the fall in the world price of cocoa from over US$3,122 per tonne in June, 2016 to as low as US$1,900 in June, 2017.
Even though such conditions which saw 40% fall in the world market price of cocoa have the potential to cause a reduction in the producer price, as being done in neighbouring Cote d’Ivoire, Nigeria and Cameroon, COCOBOD has decided to absorb the loss and by this arrangement cocoa farmers are being paid extra $400 above what the market prescribes for every tonne of cocoa bought from them.