Cocoa farmers in Ghana and Cote d’Ivoire will henceforth be entitled to a minimum of seventy percent of the agreed floor price.
By this, farmers are expected to receive 1,820 dollars per tonne of cocoa beans sold granted the floor price is held constant at 2,600 dollars.
In addition, the farmers will henceforth be protected from any significant drop in prices on the international world market.
It follows what the two countries have agreed on as living income differentials for the producers of the cash crop.
The two countries at a meeting in Abidjan on July 3, 2019, agreed on an additional four hundred dollars per tonne price for cocoa going forward.
This is to ensure that the minimum floor price of 2,600 dollars per tonne for the commodity is achieved at any moment in time.
The CEO of COCOBOD, Joseph Boahen Aidoo in a media engagement on Monday said the move should improve the welfare of farmers.
“Last year, we produced around 900,000 metric tonnes so with the constant fixed extra $400, this will have fetched this country $360m and this is outside the terminal market price…In a way, it is a form of redistributing income along the cocoa supply chain. We all know that those in the upper level of the industry have been making huge profits and at the lower level where our farmers belong, they have been taking unremunerative prices,” he surmised.
Mr. Aidoo further explained that the two countries have initiated plans to set up a stabilisation fund to cater for extreme drop in prices of cocoa on the international market.
For the stabilization fund, an achieved price in excess of 3,000 dollars for any production year will be channeled for further distribution in times of price drop on the international market.