A communication, seen by ConfectioneryNews, from the PCID said: “In recent months, the price of cocoa on the international market has risen to its highest level for over seven years. As a result, cocoa farmers are holding out hope that the field-gate price of cocoa will reflect the rise seen on the international market. All the more so since the Ivorian government has pledged that ‘the in-field price will be set at at least 60% of the international price (CAF price)’, as reiterated by the Vice-President of the Republic on 30 September 2022”.
In Ghana, there has been calls for the resignation of Joseph Boahen Aidoo, the Chief Executive Officer of the Ghana Cocoa Board (COCOBOD) by Ghana’s Minority party in Parliament, citing alleged mismanagement of the cocoa sector and a deterioration in the conditions of cocoa farmers and allegedly offering them “a meagre increase” in the price of a bag of cocoa to GHC1,300 ($113.10).
The Minority Party has levelled accusations of alleged incompetence and corruption against Aidoo, asserting that he has failed to implement necessary reforms to enhance the cocoa sector and that he is no longer suitable for the role of CEO.
Ghanaweb reported that Minority Leader Dr Cassiel Ato Forson has expressed concerns about the state of the country’s cocoa sector, despite an announced 68% increase in the producer price.
"Clearly, something is amiss at COCOBOD because we are seeing the production of cocoa coming down to the lowest in the last fifteen years, and we have also seen them recording massive losses since 2017. Last year, according to their own audit report, we declared a loss of GH¢2.4 billion in one year, and so I don’t see why the CEO should be in office despite these happenings," he told reporters.
While the Ivorian Platform for Sustainable Cocoa said it welcomes its government's efforts to achieve a decent income for cocoa producers, the document draws attention to a number of points if the objective is for a sustainable cocoa sector, which is also vital to the county’s economy.
Reminder of the price of the 2022-2023 campaign and its impact
In Cote d’Ivoire, for the 2022-2023 season, the on-board price of cocoa has been set at 900 FCFA. This price was 75 FCFA higher than the price for the previous main season. “But despite this increase, the price was not enough to significantly improve the situation of producers,” the PCID said.
As several studies have shown, the production cost of cocoa is estimated at 677.211 FCFA/Kg. If this production cost is deducted from the farmgate price, set at 900 for the 2022-2023 season, only FCFA 222.79 remains as real income. Based on the farmgate price for the 2022-2023 season, the income of an average grower with 3 hectares and an average yield of 500 kg/ha is 1,350,000 CFA francs, or 112,500 CFA francs/month.
“This is a far cry from the living wage, estimated at 262,000 CFA francs per month in 2017 by CIRES (Rapport sur le revenu vital, Cote d'Ivoire Rurale, Zone de production de cacao, CIRES, 2018).
“Although there has been no similar study since 2017, it is certain that production costs have risen since 2017, particularly given the international context and the inflation observed in recent years.”
The PCID said the situation is likely to jeopardise the sustainability of the cocoa sector, “insofar as cocoa producers are unable to make a living from their work and make the necessary investments for sustainable cocoa.”
Cote d’Ivoire is the largest producer in the world, followed closely by its neighbour Ghana. Together it is estimated they account for almost 70% of the world’s cocoa beans.
In a statement released by Ghana Civil-society Cocoa Platform (GCCP) it calls for its government to also raise farmgate prices ‘to levels that are commensurate with the work farmers put into producing cocoa beans’.
Ghana's weak cedi
Ghana’s cocoa sector has been affected by a weak cedi in free-fall against major trading currencies, which has led to unprecedented inflation levels and high costs of goods and services.
The GCCP said: “We also take notice of the issue of unavailability of funds to purchase cocoa which saw farmers not being paid on the spot when they deliver their beans at the cocoa shed. Some had to wait for months before they were paid what was rightfully due them. We are hopeful that this coming season will see improvements and farmers will not have to wait for months before being paid what is rightfully due them.”
There is also the threat of illegal gold mining, with farmers selling their land for cash to rogue speculators and giving up on cocoa all together.
As previously reported by this publication, there is evidence of unprecedented cocoa smuggling across Ghana, where a bag of cocoa beans in neighbouring Togo can fetch GHS1,500 over 30-40% above the prevailing market price in Ghana.
The GCCP said based on the working assumption of the Producer Price Review Committee (PPRC), which aims at ensuring that farmgate price is pegged at a minimum of 70% of the net Free on Board (FoB) price of cocoa beans, it is of the firm opinion that farmers in Ghana should be receiving a minimum of GHS22,080 per tonne, which is equivalent to GHS1,380 per bag (62.5kg) of cocoa beans. This figure was arrived at using the lowest projected values available including an LID of $400 per tonne as agreed.
From a living wage to a decent income
Looking beyond the 2023-2024 season, the PCID said it is calling for discussions on the field price, which should be set at 60% of the international market price.
“Producers must move from a state of survival to a dignified standard of living. It is for this reason, and in the name of the alignment efforts undertaken between Côte d'Ivoire and Ghana in particular, that it is necessary to open discussions on this 60% rate as a reference for setting the farmgate price.
“The platform is asking the Ivorian authorities to consider its recommendation, which is to set the field price at least 70% of the market price … this would have a definite impact on producers' purchasing power.”
The PCID said it supported the boycott by the regulator, the Conseil du Café-Cacao, (along with COCOBOD) of the annual meeting of the World Cocoa Foundation in October 2022. We welcomed and strongly support the rapprochement between the Ivorian and Ghanaian authorities to pool their efforts and act together for the wellbeing of producers in both countries.”
- Both COCOBOD and Conseil du Café-Cacao have so far declined to comment on the issues raised in this article.