COCOBOD has debunked assertions by the Minority group in Parliament that government is offering cocoa producers a terrible deal by its decision not to increase cocoa producer price due to fall in world market price.
The minority at press conference today argued that, government must utilize the cocoa stabilization fund established by the previous government, to cushion farmers instead of the insensitive approach COCOBOD intends to use.
But in rebuttal, COCOBOD said “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”.
A statement copied to Citi Business News further said “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”.
Below is the full statement
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, COCOBODused 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, despitethe fall in the world price of cocoa from overUS$3,122 per tonne in June, 2016 to as low as US$1,900 in June, 2017.
Even though such conditionswhich saw 40% fall in the world market price of cocoahave 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.
The Cocoa Fertilizer Programme(Hi-Tech Programme)
We also wish to state, for the records, that Cocoa Fertilizer Distribution Programme, otherwise known as Cocoa Hi-Tech Programme was introduced in 2004 to improve soil fertility, among others. Since the introduction of the programme, a lot of successes have been chalked in terms of production output. Until 2014, fertilizers were being subsidized and farmers had easy access to the inputs. However, from the beginning of the 2014/2015 crop season, COCOBOD decided to give out the fertilizers free of charge to farmers for application on their farms. Even though the idea was laudable, the consequences were far from the anticipated intentions. Farmers complained of inadequate supply as well as diversion of the inputs. It is therefore in response to the several requests and recommendations from farmers that management decided to re-introduce the fertilizer subsidy programme. The minority will be surprised to know that the very farmers they seem to be crying for have overwhelmingly embraced the programme.
This will ensure that the fertilizers will be readily available at all sales outlets across the cocoa growing areas interested farmers will buy and apply them accordingly. The free fertilizer policy created a lot of loopholes for diversion and smuggling of the inputs to the detriment of our cherished cocoa farmers. We again emphasise for the records that the fertilizer subsidy programme will make the inputs available and readily accessible to all cocoa farmers.
We wish to assure our cherished farmers that management is putting in place measures that will reduce our over-dependence on foreign buyers in the determination of cocoa prices. Among these, Ghana and Côte d’ Ivoire have started dialoguing to cooperate on measures to ensure better prices for cocoa. Key on the recent Joint Cooperation Meeting between the two countries held in Accra –Ghana was the need for both countries to ensure that at least 50% of cocoa produced in their respective countries is processed locally.
The National Cocoa Consumption Campaign rolled out by the government of Ghana, which aims at boosting local consumption of cocoa, is also in motion. COCOBOD is also exploiting the consumption of cocoa in emerging markets. All these measures are to reduce the volume of raw beans exported.
We would like to appeal to our cherished farmers to disregard any publication and comments which seek to suggest that cocoa farmers are being treated unfairly.
ISSUED BY PUBLIC AFFAIRS DEPARTMENT