Cocoa Price Up By 50 Per Cent

Accra, - 11 June

The Government, in consultation with stakeholders of the Cocoa industry, today increased the producer price of Cocoa by 50 per cent from 1.2 million cedis per tonne to 1.8 million cedis. The increase which takes immediate effect translates to 112,500 cedis per bag of 62.5 kilograms as against 75,000 cedis. This was announced in Accra by Mr. Victor Selormey, Deputy Minister of Finance, at a meeting with the Producer Price Review Committee (PPRC), Farmers, Cocobod, Licensed Buying Companies and Haulers.

Mr. Selormey said the new price, which represents 54 per cent of the estimated Free On Board (FOB) price for the next cocoa season, was decided after considering the recommendations of the PPRC technical committee and other factors pertaining to the cocoa industry. He said the new price shows Government's commitment to "increase progressively, the producer price until it reaches at least 60 per cent of the FOB price by the year 2000."

New rates were also approved by government for Licensed Buying Companies, Haulage and other service providers to the industry. Mr. Selormey said the increases will be subjected to further review by the PPRC within the year. On the liberalisation of the external marketing of cocoa, the Deputy Minister said government will not be coerced by any pressure from the Bretten Woods Institutions (World Bank and IMF) to liberalise that area.

''Government will not liberalise the external marketing of cocoa as proposed by those institutions. If we do that we will lose the quality of our cocoa and kill the cocoa industry,'' Mr. Selormey said. Rather, the government under its on-going review of the cocoa sector, is considering various internal marketing arrangements to bring efficiency into the operations of the sector. These include splitting the Produce Buying Company, the single largest local purchaser of cocoa, into two or more groups ''to ensure that the industry will not (rpt not) experience undue convulsions.'' Mr. Selormey said.

Under this arrangement government will search for strategic investors to buy into these smaller companies while equities in these companies will be floated through the Ghana Stock Exchange. Workers in the cocoa industry, especially existing staff of PBC, will be supported to acquire shares in the privatised PBC. Mr. Selormey said government will engage a consultant to advise it on the proposed re-organisation of PBC and expressed the hope that the details of the split will be announced by the end of September. On the numerous abuses of the use of cash to purchase cocoa, Mr. Selormey said government is negotiating with some banks to re-introduce the use of the post office savings and credit scheme to consolidate the Akuafo Cheque system.

The Minister assured farmers that a study is being conducted into the delivery of extension services by Cocobod and the Ministry of Food and Agriculture to rationalise extension services to ensure effectiveness and efficiency in the agricultural sector.

Nana Erhuma Kpanyinli the sixth, national chief farmer, welcomed the increase as not only "significant, but a concrete demonstration of the government's concern for the welfare of farmers." The Chief Farmer thanked government for its development programme for the rural areas. "By improving the earning capacity of farmers and the provision of basic amenities in the rural areas, the drift of the youth from the rural areas will be abated," he said. Mr. Kwame Baah, a representative of the Licensed Buying Companies (LBC), said the non-availability of banks in the buying centres has pushed cocoa buyers to use cash instead of cheques. He also appealed to the government to provide LBC's with funds or access to credit to meet the high cost of cocoa.