Government raises cocoa producer prices

The Ghanaian government has opened this year's main cocoa buying season,in which it expects the biggest crop for 40 years, by announcing an unprecedented increase in producer prices, the fourth in three years. "The producer price is increased from 8.5 million cedis US$1,013) to 9 million cedis ($1,073) per metric tonne of cocoa. This takes immediate effect," Finance Minister, Yaw Osafo Maafo, told reporters in Accra. Cocoa and gold are the backbone of the Ghanaian economy. Six out of the country's 10 regions grow cocoa, the largest producers being the Western, Brong-Ahafo and Ashanti regions. In recent years, Ghana lost its traditional position as the world's second largest cocoa producer after neighbouring Cote d'Ivoire to Indonesia. But officials at the Ghana Cocoa Board said Ghana should regain the number two spot in 2002/2003 with an estimated crop of 497,000 tonnes, the biggest for 40 years. Crop diseases and the rampant smuggling of cocoa beans to Cote d'Ivoire led to a decline in production. But Cocoa Board officials said improved farming techniques a major disease control campaign had enabled Ghana to bounce back. And in recent weeks Ivorian cocoa has started flowing into Ghana to take advantage of producer prices that are now over 50 percent higher than in Cote d'Ivoire. Cote d'Ivoire's Cocoa and Coffee Production and Development Corporation has forecast a drop in cocoa production of more than 20 percent this year to between 900,000 and one million tonnes from 1.2 million previously, largely as a result of the country's civil war. This has led to cocoa smuggling into Guinea as well as Ghana. Osafo-Maafo said that in recognition of the efforts of Ghanaian cocoa farmers, a pre-season bonus of about $937,00 would be paid to farmers. This would bring the total bonus paid out for the 2002/2003 season to about $19 million. The government is also pumping an additional $143,000 into the Cocoa Scholarship scheme, which was instituted by Ghana's first president, Kwame Nkrumah in the 1960's, to support the education of children of cocoa farmers. Government officials said in order to add value to locally produced cocoa, Ghana would increase the percentage of the crop that was processed locally from 32 percent at present to 40 percent in the coming years.