The Ministry of Finance and Economic Planning in collaboration with COCOBOD, farmer groups and other stakeholders in the cocoa industry will continue to review the producer price of the crop quarterly to ensure that developments on the international market reflect on the local industry.
Consequently, the Minister of Finance, Dr Kwabena Duffuor on January 7, after a meeting with stakeholders, announced a new producer price of GH¢2,400 per tonne, up from the GH¢2,208 approved last October.
The figure translates into GH¢150 per a bag of 64 kilogrammes, an increase from the GH¢138 per a 64 kilogramme bag, representing 72.16 per cent of the net Free on Board (FOB) price.
Dr Duffuor expressed the hope that the new price and fees would motivate the farmers to offer off their best and also help stem the tide of smuggling of the crop out of the borders of the country.
He also indicated that the Social Security Fund for Cocoa farmers had been set up as per the 2010 Budget and that COCOBOD would prepare modalities for its implementation.
In spite of these paced efforts, there are reports that smuggling was still rampant along some borders with Cote d'Ivoire, where prices are slightly higher.
In the current review, the finance minister also increased the buyers' margin from GH¢250 to GH¢280 per tonne, which means that intermediaries who help to purchase the cash crop from the hinterland growing areas will also make good returns to cover cost and make way for reinvestment.
Ghana's cocoa industry is very well regulated and is one of the successful home-grown initiatives that has stood the test of time, in spite of calls for its abolition by some development partners.
There is a board that is solely responsible for marketing the beans outside the country and on its behalf in land by the Cocoa Marketing Company. The board has licensed buyers who execute purchases on its behalf.
By this arrangement, all players within the cocoa value chain have guaranteed prices, predetermined at the beginning of every season, thus motivating each on the chain to be in business.
It is in this spirit that the rate of hauling cocoa beans from a buyer point to the harbour (rate for hauliers) has also been increased from GH¢105 per tonne to GH¢113 with effect from January 8 as is the case for all the price adjustments.
Smuggling
It is regrettable, however, to know that in spite of the good faith in price adjustments by the government and the stakeholders, some unscrupulous Ghanaians are still carrying the crop across to neighbouring countries for slightly higher prices.
This is an opportunity for people to demonstrate patriotism and reciprocate the good intentions of the authorities so as to encourage them to do more. Money should not always be the consideration for all actions. It is important to note that the prices offered the farmers represent over 70 per cent of the price of the commodity shipped, leaving less than 30 per cent of the proceeds into government coffers, thus for the generality of Ghanaians.
This way, the farmers and other players in the cocoa industry get double benefit; the direct cash and the development projects to which the over 25 per cent that accrues to the government would be put. It should equally be noted that the government also incurs other forms of costs to keep the cocoa industry running.
These includes free spraying of cocoa farms, the provision of extension services and inputs. In addition, since cocoa issues are a priority in this country, the government through the COCOBOD keeps a reasonable stock level of vaccines for cocoa disease outbreaks, which all hurt the national kitty. The least a citizen could do to help the system would be to smuggle.
The GRAPHIC BUSINESS has gathered that some of the security operatives tasked with the checking of smuggling the crop are actually dabbling and abetting the crime. The suggestion, therefore, is that community policing should rather be strengthened, while district chief executives and some stakeholders are involved in the Anti-Smuggling Taskforce.
It is important to stress home the point that increasing the FoB price should not only be the way out of curbing the smuggling. This is because Ghana's system is such that the government at every point in time absorbs every loss that arise. It is therefore imperative that every windfall on the trade is fairly shared.
It is also significant that clerks of licensed buying companies be educated to support anti-smuggling efforts. Channeling more money into community policing could also be an effective means of weeding out the smuggling canker from the cocoa industry.
