Ghana has raised the fixed farmgate price paid to cocoa farmers by nearly 45% to help boost their incomes and curb smuggling.
The new price raises the payment for a 64-kilogramme bag of cocoa beans to $192, up from $132. This brings the farm gate price to $3,063 per tonne, a 129% increase from the opening price of $1,335 per tonne for the 2023/2024 season.
Global cocoa prices have been buoyant this year as disease and adverse weather in Ghana and Ivory Coast, which supply more than 60% of the world’s cocoa, pushed the market to a third successive deficit.
Ghana’s cocoa sector, which accounts for about 10% of the nation’s GDP, relies heavily on cocoa farmers. The move aims to improve the welfare of the farmers as a new season begins.
Agriculture Minister Bryan Acheampong described the price increase as unprecedented while stating that it signifies the government’s commitment to improving the sector by curbing smuggling, which has been a significant issue in the cocoa industry.
According to the minister, a similar price increase could be implemented in Ivory Coast next month, given that both countries coordinate farmgate prices and cocoa supplies.
He added that before the government raises the anticipated $600 million syndicated loan, Ghana’s cocoa marketing board, Cocobod, has sufficient funds to buy cocoa from farmers this season.
Ghanaian cocoa farmers expect a boost in crop output in the 2024/2025 season due to improved weather and rehabilitated farms. The minister said he now expects cocoa production to exceed the previous target of 650,000 metric tons.
Experts believe that raising the farm gate price could make it less appealing for farmers to engage in illicit cross-border sales and enable them to reinvest in their cocoa plantations, thereby mitigating the global supply shortfall.
