The Ghana COCOBOD has been urged to introduce alternative cash ‘intercrops’ in order to accrue over $5.0 billion annually.
According to the Chamber for District and Community Industry, this would drastically improve the country’s Gross Domestic Product (GDP), help improve the value of the cedi for a longer period, boost the processing industry while creating between 80,000 and 100,000 direct jobs and over 400,000 indirect jobs.
“The cocoa sector, for many years, has become the backbone or support for our exchange rate stability. The government, through COCOBOD every year, issues a syndicated loan between $1billion and $1.5billion, purposely for the forward sale of cocoa for a particular crop season. This has curbed the seasonal sharp depreciation of the cedi, improved our balance of payment as well as the reserve position of the country.”
“Unfortunately, more than half of the producers of cocoa live below the poverty line, with a monthly wage of less than GH¢150 or $400 per acre for a year compared to other cash crops. This has enticed the cocoa farmers to easily give out their coca farmlands for illegal mining in the country, as this provides non sustainable cash up-front to these farmers, a statement issued by the Chamber for District and Community Industry (CDCI) and signed by its Convenor, Solomon Kattah, said.
“The government of Ghana is aware that the economic and social development of the country depends on improving the living and working conditions of producers for which per our Living Income Differential (LID) introduced by the government is a step in the right direction. But the yield per hectare age is woefully inadequate”, the statement said.
Furthermore, it said “COCOBOD with its large farmer data base and hectare age in the cocoa sector can introduce alternative cash ‘intercrops’ which has improved the farmer income to about 500 per cent. It has also increased net earnings above $5billion.”
The statement also urged COCOBOD and the government to consider those key prepositions and also put in place strategies and programmes with private capital injection (long term) to help cocoa farmers to take advantage of the Africa Continental Free Trade Agreement.
Moreover, it explained that the cocoa sector could support the structural transformation of the country, and thus promote greater economic and social inclusion for a more harmonious development, adding if the industry was lucrative, galamsey which has destroyed the forest reserves and water bodies would not have happened.
“COCOBOD should realise that over the years, cocoa alone has not been able to improve the livelihood of the farmers, and therefore, should consider institutional diversification. Upon all the efforts, the government has put in place to introduce the LID, it is still less profitable compared to a lot of cash crops”.
Additionally, it said “COCOBOD should be innovative by creating multiple cash crop platforms because the age bracket for most of these cocoa farmers are rising, adding the yield per acre which is $400 without cost of inputs is unattractive”.
Also, the statement said the sad story for these cocoa farmers could change if it decided to introduce land utilisation programmes for the farmers and also increased environmental safeguards.
Incentives to farmers
“COCOBOD in the past has lacked the capacity to give economic incentives to farmers to behave as entrepreneurs, but they did protect the farmers from price-fluctuations by offering stable prices, introduced subsidised input schemes (paid by FoB margin) and made sure the quality of the exported cocoa was high. The advantage of this system is to stabilise prices and cocoa farmers in Ghana are relatively well-off. But on the downside, there are many inefficiencies due to the fact that a public entity is running a private business”.
To sustain the economy going forward, the statement urged the government to invest massively in other cash crops such as coconut, avocado, water melon etc. which falls under the same climatic conditions with cocoa on a large scale.