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Business News Sun, 28 Apr 2019

Minority opposes IMF’s calls to reduce producer price of cocoa

The Minority in Parliament has called on the government to ignore calls from the International Monetary Fund (IMF) to reduce the producer price of cocoa from the current GH¢7,600 per tonne.

According to the IMF, it has become critical for government to reduce the producer price of cocoa to ensure that the Ghana Cocoa Board (COCOBOD’s) current funding gap of GH¢1 billion does not expand.

COCOBOD last reviewed upwards, the producer price of cocoa from GH¢6,720 per tonne to GH¢7,520 for the 2016/2017 season.

But according to the IMF, a reduction is needed this time around to reflect the changes in cocoa price on the international market.

In an interview with Citi Business News on the matter, NDC MP for Chereponi and Deputy Ranking member of the Food, Agriculture and Cocoa Affairs committee, Samuel Abdulai Jabanyite highlighted the impact that reducing the price would have on farmers.

“We as a government in 2014 foresaw that commodity prices in general fluctuate, so for that matter in October 2014, the government established the Cocoa Stabilization Fund. What has been accrued in it should be sufficient enough to maintain the producer price so that the farmer can also live comfortably. If you decrease the price of cocoa which is the mainstay of the farmer, where is he going to get the money to be able to go into the market to buy his self-needs? So that is not an option that we are going to consider.”

Mr. Jabanyite further outlined what steps COCOBOD needs to take to be able to maintain the producer price to where it stands currently .

“We think that COCOBOD shot itself because they are cause of the problem. What they have brought out from 2017/2018 in their own budget shows that their overheads are way above, some of the investments that they’ve made, we can say are unreasonable. So we believe that if COCOBOD can cut its overhead expenditure, they should be able to have enough money. If they also make good use of the stabilization fund they should have sufficient money to cushion the farmers against these external shocks.”

Producer Price maintained for 2018/2019 cocoa season

The government maintained the producer price of cocoa for the 2018/2019 cocoa season at GH¢7,600 per tonne, translating into GH¢475 per bag of 64 kilogramme (kg) gross weight.

This was announced by the Minister of Food and Agriculture, Dr. Owusu Afriyie Akoto, at the 2018 Cocoa Day Grand Durbar in Accra.

He said the decline in the price of the commodity on the international market, which had forced all the other 21 producing countries to slash their producer prices, made it impossible for the government to review the producer price upwards.

Source: citibusinessnews.com
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