By Alex Ababio
An American professor, Steve Hanke, has accused the Ghana Cocoa Board (COCOBOD) of not paying cocoa farmers fairly. Hanke, an economist at Johns Hopkins University, said that COCOBOD gives farmers only one-third of the market price for cocoa.
In a post on his social media platform X (formerly Twitter), he said:
“The Ghana Cocoa Board rips off Ghanaian farmers. The board pays farmers only one-third of the market price for cocoa. The Cocoa Board is a typical corrupt Ghanaian institution.”
His statement has started a big discussion about how Ghana treats its cocoa farmers.
COCOBOD’s Response and Plans
The new Chief Executive of COCOBOD, Dr. Randy Abbey, disagrees with Hanke’s statement. He says the government is working hard to support cocoa farmers by:
Encouraging local cocoa processing
Increasing the amount of cocoa consumed in Ghana
Helping farmers get better prices for their cocoa
Low Domestic Cocoa Processing
Dr. Abbey explained that Ghana has factories that can process 504,780 tonnes of cocoa, but they are working at less than 50% capacity. This means Ghana does not process enough cocoa into chocolate and other products.
He added that Ghana’s per capita cocoa consumption (the amount of cocoa each person eats per year) has increased from 0.5kg to 1kg, but this is still very low compared to countries in Europe and America.
> “Ghana has long been recognized as one of the world’s leading producers of cocoa, yet we are yet to reap the full benefits of this beloved crop in terms of domestic consumption,” he said.
Dr. Abbey believes that if more cocoa is used in Ghana, it will help farmers earn more money instead of relying only on foreign buyers.
What Is Ghana Doing to Support Farmers?
The government has introduced two major policies to help farmers:
1. Higher Producer Prices
In September 2023, the government increased the price of cocoa for farmers by 63.6%, from GHS800 to GHS1,308 per bag.
Farmers now receive 70.5% of the Gross FOB price, which is USD 1,821 per tonne.
2. Support for Local Processing
The government is working with private companies to increase cocoa processing in Ghana.
This will help create more jobs and ensure farmers get better prices for their cocoa.
COCOBOD’s History and Farmer Complaints
COCOBOD was created in 1947 to manage Ghana’s cocoa industry. It sets cocoa prices, regulates the industry, and helps farmers. However, over the years, many farmers have complained that:
COCOBOD sets prices too low.
Farmers do not get a fair share of the international cocoa price.
Corruption within COCOBOD prevents farmers from getting more money.
These issues have led to many farmers struggling to make a good living.
Comparing Ghana’s Cocoa Prices to Other Countries
Ghana is not the only country where cocoa farmers have pricing problems. Other countries in West Africa, such as Côte d’Ivoire and Burkina Faso, face similar challenges.
Côte d’Ivoire (Ivory Coast)
The country introduced the Living Income Differential (LID) in 2019, which adds $400 per tonne to cocoa prices.
This initiative helps Ivorian farmers earn more than Ghanaian farmers.
Burkina Faso
Farmers in Burkina Faso often sell their cocoa at higher prices to traders in neighboring countries.
Ghana and Côte d’Ivoire together produce about 60% of the world’s cocoa, but farmers in both countries still earn very little compared to the global market price.
How Cocoa Supports Ghana’s Economy
Cocoa farming is very important for Ghana. The cocoa industry:
Contributes 3.5% to Ghana’s GDP.
Makes up about 25% of Ghana’s total export earnings.
Provides jobs for about 800,000 smallholder farm families.
Despite this, many farmers live in poverty because they do not get a fair price for their cocoa.
Challenges Facing Ghana’s Cocoa Industry
Even though cocoa farming is important, Ghana’s cocoa industry faces many problems, including:
1. Illegal Gold Mining (Galamsey)
Illegal gold mining is destroying cocoa farms and polluting water sources.
Many farmers are selling their land to miners instead of growing cocoa.
This has led to a decline in cocoa production and an increase in global chocolate prices.
2. Climate Change
Unpredictable weather and less rainfall are affecting cocoa farms.
Diseases like the cacao swollen-shoot virus are reducing cocoa yields.
Some farmers are switching to other crops that are easier to grow.
Ghana’s Cocoa Industry and it’s International Partners
Several international organizations have given their opinions on Ghana’s cocoa problems:
World Bank
The World Bank says Ghana needs governance reforms to fix problems in the cocoa sector.
They believe that corruption in COCOBOD is stopping farmers from getting better prices.
European Union (EU)
The EU has introduced new laws to protect forests, which prevent farmers from expanding their cocoa farms.
These laws promote sustainability, but they also make it harder for Ghana to increase cocoa production.
Conclusion
Steve Hanke’s accusation has brought attention to the challenges facing Ghana’s cocoa farmers. While the government has increased prices and is supporting local cocoa processing, farmers still struggle with low incomes, illegal mining, and climate change.
Comparing Ghana to Côte d’Ivoire and Burkina Faso shows that Ghanaian farmers receive lower prices. Meanwhile, international organizations like the World Bank and EU suggest that corruption and poor policies are holding back the industry.
For Ghana to improve its cocoa sector, it must:
Ensure farmers get fair prices.
Increase local cocoa processing.
Stop illegal mining on cocoa farms.
Adapt to climate change.
Without these changes, cocoa farmers in Ghana will continue to struggle despite their hard work.