The Institute of Economic Research and Public Policy (IERPP) has warned that recent developments in the cocoa sector could pose risks to Ghana’s economy and national security following the government’s decision to reduce the producer price of cocoa from GH₵3,625 to GH₵2,587.

In a statement signed by Professor Isaac Boadi, Executive Director of IERPP, the institute said the price reduction has been rejected by cocoa farmers, who have criticised the government’s justification for the move.

According to IERPP, the decision could have long-term implications for the cocoa industry and the broader economy if not addressed.

The institute noted that more than one million people are directly involved in Ghana’s cocoa sector. It cautioned that the lower price may discourage continued participation in cocoa farming and deter new entrants into the industry.

It added that some farmers could abandon their farms, leading to job losses and possible social challenges in affected communities.

IERPP also raised concerns about the potential environmental impact of the situation. It suggested that some farmers might turn to illegal mining activities, commonly known as galamsey, or sell their lands to illegal miners if cocoa farming becomes less viable.

Ghana has in recent years faced significant environmental challenges linked to illegal mining.

Describing cocoa as a longstanding pillar of the national economy, the institute said any sustained disruption in the sector could negatively affect Ghana’s economic stability.

Cocoa has historically been one of the country’s major export earners, alongside gold and, more recently, oil.

IERPP called on the government to take urgent steps to address tensions within the sector, including reconsidering the new producer price.

It urged authorities to restore the previous price of GH₵3,625 to mitigate potential economic and security consequences.