Gov't Gives Ultimatum on Cocoa Exports

The government has said the Cocoa Marketing Company (CMC) is the only recognised entity allowed to export cocoa and has therefore asked all Licensed Buying Companies (LBCs) to present their licence within seven days.

Speaking to the ADM last Friday after a press conference to announce the new producer price of cocoa, the Minister of Finance, Mr. Yaw Osafo-Maafo said it has come to government's notice that most of the LBCs in the country are operating in Cote d'Ivoire which is illegal.

He told the ADM: "If you are an LBC you must buy for CMC if you don't, your licence would be destroyed. And we are giving them seven days from today to declare or get their licence destroyed; and we are serious."

As to measures the government is taking to retain its second position in the world ranking of cocoa, he said government is in negotiations with the COCOBOD to assist cocoa farmers to purchase fertilizers to ensure increase in production.

Earlier at the press conference, he announced the upward adjustment of the producer price of cocoa from ?6,200,000 per tonne to ?8,500,000 per tonne with effect from last Friday.

Mr. Osafo-Maafo said this means a bag of 64.0 kilograms of cocoa would now sell at ?531,250 as against ?387,500 during the last season.

He said the price of cocoa would be increased annually until a 70% share is achieved by the year 2004/5. The current price stands at 67%.

He said: "this new competitive price should discourage smuggling of cocoa out of Ghana. Government is also putting in measures at the borders to minimise the smuggling of cocoa".

Mr. Osafo-Maafo said as part of the measures to boost the cocoa industry government has authorised the immediate payment of a pre-season bonus of ?50 billion, which is approximately ?8,000 per bag for purchases of cocoa during the last crop season.

He said: "government intends to pursue a pricing policy which would guarantee and protect farmers income through sustainable price policy".

Further, he said an amount of ?242 billion has been set aside for cocoa farmers to control diseases such as black pod and capsid and also to increase productivity.

The sector minister said an additional amount of ?10 billion has been allocated to support the scholarship scheme for the wards of cocoa farmers in the country. Also, government has secured an amount of Euro 10 million (?82bn) to rehabilitate existing roads and to construct new ones in the cocoa growing areas to help transport cocoa and other foodstuff.

He said government has directed the COCOBOD to use the Akuafo Cheque System to pay farmers to ensure an efficient system of payment. COCOBOD and the Bank of Ghana (BoG), he said, have put in place arrangements to ensure sufficient money in the banks to pay for any produce purchased.

This is the third time the Kufuor administration in a period of one year nine months is increasing prices of cocoa.

The first increase in May last year was from ?3,475,000 to 3,872,000 per metric tonne that is 217,187 per bag of 64 kilograms gross with further increases in October, 2001 and February, 2002 to ?6,200,000 per metric tonne or ?387,500 per bag.