Let the Producer Price Review Committee do its job – Cocoa Buyers’ Association

Amid calls for a review of the producer cocoa price ahead of the upcoming cocoa season, ostensibly to adjust it upward from the current rate of GH¢10,560 per metric tonne that was used for the 2021/2022 crop season, the Licenced Cocoa Buyers Association of Ghana (LICOBAG) has called for the Producer Price Review Committee (PPRC) to lead deliberations.

While acknowledging the principal role of farmers in the sector, the Association argued that having the Committee at the fore of the conversation will allow for a more objective, fair and robust decision-making process as the Committee has representation from all stakeholder groups in the cocoa value chain.

The call was conveyed in a statement from LICOBAG signed by its Executive Secretary, Victus Dzareh Dzah, which stressed that the process must be devoid of “sentiment or political expediency”.

“We have noted with great interest the agitation for an increase in producer price of cocoa, which we think is a step in the right direction… Much as we agree that the cost of doing any kind of business at this time is extremely high, we believe that a scientific approach must be taken in the price review exercise,” the statement read in part.

“In this regard, the Producer Price Review Committee, which has always had the mandate to deal with matters relating to the pricing of the crop, must be given the chance to do its job… However, a systemic approach to the issue reveals that all other stakeholders are part of the whole, and in fact interconnected. When the farmer produces cocoa it must be bought, graded and sealed, evacuated and shipped before the value is added to it – or else it is valueless,” LICOBAG added, while cautioning that failure to attain equitable input and distribution could severely hamper the entire cocoa value chain.

Last year, despite the fall in global market price for cocoa, government after deliberations with the PPRC maintained the producer price for purchasing cocoa beans at GH¢10,560 per metric tonne for the 2021/2022 crop season – a value that was 87.15 percent of the Free on Board (FOB) value.

Consequently, a 64-kilogramme gross weight bag of cocoa beans was sold for GH¢660, which at the time placed it as one of the highest-priced within the sub-region.

This came after Ghana Cocoa Board (Cocobod) raised the producer price by 28 percent per bag from GH¢515 in the 2019/2020 season, and the US$400 per metric tonne Living Income Differential (LID) came into effect.

This year, however, there have been renewed calls for an upward adjustment of the price to factor-in an appreciation of cocoa prices globally… as well as the sharp increase in cost of living and doing business.

The cedi’s fall in value against the US dollar ensures that cocoa farmers now earn approximately US$65 per bag versus US$100 a year ago.