The Minority in Parliament has accused the government of saying that the story the International Monetary Fund (IMF) has advised it to reduce the producer price of cocoa to reflect changes in international cocoa prices.
The Ranking Member, Food, Agriculture and Cocoa Affairs, Mr Eric Opoku, said the government wanted to create the impression that it was under pressure from the IMF to bring down the producer price of cocoa in order not to increase the price for farmers.
Speaking in an interview with journalists last Wednesday, Mr Opoku, who is the National Democratic Congress (NDC) Member of Parliament (MP) for Asunafo South, asked the government to come clean on the matter.
He said the release of the purported directive from the IMF was a “pre-emptive” move by the government to prepare the minds of cocoa farmers that the producer price of cocoa in Ghana was too high and so they should not expect any increases.
Per the information from the IMF, the downward adjustment had become necessary because the Ghana Cocoa Board (COCOBOD) was grappling with a funding gap of GH¢1 billion due to the government’s inability to reduce producer prices paid to cocoa farmers at a time global prices of the crop had been falling.
In its seventh and eighth review documents under the recently concluded Extended Credit Facility (ECF) Programme, the IMF explained that the adjustment was needed to save COCOBOD from expanding the financing gap.
“The state-owned cocoa marketing company (COCOBOD) is also experiencing difficulties. COCOBOD faces an estimated financing gap of GH¢1 billion (0.3 per cent of gross domestic product) in the current crop year.
“In (IMF) staff’s view, producer prices should be adjusted to reflect changes in international cocoa prices,” the IMF was quoted as saying in one of the documents that were released this month.
Reacting to the IMF’s directive, the COCOBOD said it would not yield to the directives of the IMF to reduce the current prices of cocoa because it would push farmers into selling their cocoa farms to illegal miners despite government’s efforts to deal with the menace.
It said the decision would force farmers to easily give out farmlands to illegal miners compared with the prices of their products.
Speaking on the issue, a Manager at the office of the Chief Executive Officer for COCOBOD, Mr Fiifi Boafo, said “Reducing price of cocoa will become an incentive for farmers to sell farmlands to illegal miners.”
Before the commencement of a cocoa season, mostly in October every year, COCOBOD normally announces the producer price of cocoa in the crop season.
That price was last increased by 11.76 per cent in October 2016 to cover the 2016/2017 season. The price has since remained unchanged at GH¢7,600 per tonne, translating into GH¢475 per bag of 64 kilogramme (kg) gross weight.
According to the International Cocoa Organisation (ICCO), the price of cocoa on the international market within the same period dropped from an average of US$2,500 per tonne in November 2016 before ending that year at US$2,287 per tonne.