The General Agricultural Workers Union (GAWU) has challenged government to increase the farmgate price of cocoa by 150 percent. GAWU is of the view that such an increase, will not only encourage farmers to produce more, but will also help reduce practices where farmlands are sold to illegal miners.

Speaking to Joy Business in reaction to reports that COCOBOD is considering an upward adjustment of cocoa prices for farmers, the General Secretary of GAWU, Dr. Edward Kareweh argued that the financial wellbeing of cocoa farmers must be paramount.

He stated that there is no justification for government to continue pegging cocoa prices below Ivory Coast any time COCOBOD announces the price for the new planting season.

“Why must we always look at the price set by Ivory Coast and fix our price slightly below theirs. Ivory Coast has increased their price by 100 percent. What I hear is we are considering 50 percent. Why can’t we increase cocoa price by 150 percent”, he argued.

Dr. Kareweh observed that such an increase will motivate farmers to increase production and stop selling farmlands to illegal miners who offer exorbitant deal.

“When you listen to the farmers selling their farmlands, they tell you that the miners offer them huge amount of money, which they can’t decline. If the cocoa farmer is earning better, they won’t sell their farms”.

Dr. Kareweh underscored the need to protect cocoa farmers since the product is very essential in fetching the country foreign earnings.

He pointed out that the foreign income from cocoa has been a reliable source of funding to support Ghana’s economic growth.

Touching on the increasing prices of cocoa on the world market, Dr. Kareweh said the high demand of the product indicates that it is time for the producer to determine the price.

“We have seen the consumer of cocoa always setting the price. However as the price go up on the world market, the producer must take advantage to set the price”, he said.

Calls for price increase  

The Ghana COCOBOD has told Joy Business government is considering an increase in the farmgate prices of cocoa beans for farmers.

The decision, which is currently being deliberated upon by stakeholders in the cocoa sector is targeted at improving farmers’ wellbeing, as well as reduce illegal movement of cocoa beans to neighboring countries.

The reason for this move, according to COCOBOD is to also help stop smuggling to neighboring countries, particularly Ivory Coast which has announced a 100 percent increase in farmgate prices, following a surge in global prices of the commodity.

Already, Bloomberg is predicting government may announce above 50 percent increase in the prices for farmers.

According to Bloomberg, If Ghana, which is the world’s second-biggest producer of the chocolate ingredient should proceed with the pay boost, it would mark the first time that the country will raise farmers pay twice during the main crop season, which started last September and ends on June 30.

Government has already raised the rate by 63.5 percent to 20,928 cedis a ton at the beginning of the period.

Reasons world prices went up

Bloomberg analysis shows that Cocoa futures in New York soared to multiple records in recent months after bad weather and disease hurt output from Africa.

The rush to secure supplies first pushed prices higher, but futures have now more than doubled this year as margin calls and forced buying put traders under stress.

The analysis also said the spike in wholesale markets means the share received by Ghanaian farmers has dwindled to 16% from 44% seven months ago, when the government last updated the farmgate price. Even if farmer pay doubles, it will remain far below levels on the world market.