Member of Parliament for Manhyia South, Dr. Matthew Opoku Prempeh has cautioned Ghana Cocoa Board and the government not to increase the purchase price of cocoa on the local market.
According to him, the implementation of the decision would make cocoa farmers poorer. It will also amount to stealing from the poor farmers.
“The rippling effect of the decision of the government is that it is going to make the farmers poorer. They are actually stealing from the pockets of the farmers”, he noted.
Speaking in an exclusive interview with The Chronicle, Dr. Prempeh said the stance of the government was not fair in ensuring sanity in the cocoa industry.
The government in its 2014 Financial Policy statement has decided to maintain the purchase price of cocoa for the 2012/2013 season, despite the increment of the commodity on the international market. No official explanation has been given for that.
During the 2012/2013 crop season, the government purchased a 64kg bag of cocoa at Ghc212, representing 78.42% of the net Free On Board (FOB) price.
This translated the price of the country’s number one export commodity into Ghc3,392 per tonne, a Ghc112 price increase from the previous season of Ghc3,280 – despite falling world market prices of the commodity.
Former Minister of Finance, Dr. Kwabena Duffour, at the time, attributed the purchasing price of the commodity on the local market to the government’s commitment to ensuring that the welfare of the cocoa farmer was continuously enhanced.
Dr. Kwabena Duffour also noted that “In fulfillment of this commitment, the government has decided to reduce its share of the 2012/2013 cocoa export duty, in order to raise the producer price paid to our hardworking cocoa farmers. This decision was taken to increase the earnings of farmers so as to enhance their welfare.”
But Dr. Prempeh, commenting further, wondered why the government has decided to drag its feet, not to adjust the purchase price of cocoa on the local market to reflect the prevailing price on the world market.
Cocoa prices on the world market declined from US$3,000 in 2011/2012 crop season to US$2,300 in the 2012/2013 season.
StockMarketWatch/Futures Daily puts the prevailing world market price of cocoa on the London Commodity market at US$2,827 per tonne. The International Cocoa Organisation also puts the price on the New York Stock Exchange (NYSE) as US$2,839.45 per tonne.
The increase, Dr. Prempeh argued, represents about 21% and wants it to reflect on the local market to help improve on the living conditions of cocoa farmers who had to endure the pain as a result of the free fall of the cedi.
“Purchasing price of cocoa is determined by the indicative on the world market. So, what we were trying to explain to the Minister of Finance was that since every year, they increase the salaries of civil servants to take care of inflation and depreciation of the cedi, it was better for them to do same to the cocoa farmer.
“But he seems not to side with us. This is cheating on cocoa farmers. It is a disincentive to them,” Dr. Prempeh bemoaned.
Continuing, Dr. Prempeh, who is also a member of the Parliamentary Select Committee on Health recalled the repercussion of the government’s decision on the cocoa farmer and economy, noting that it could open the doors to smuggling of the product to neighboring La Cote D’Ivoire for good prices.
Going forward on the matter, he urged the government to immediately release funds to pay the bonuses of cocoa farmers, which had accumulated over the last three years.
