According to the Ghana Civil-society Cocoa Platform (GCCP), uncompetitive cocoa prices on the global market are encouraging cocoa farmers in gold-producing regions to surrender farmlands for illicit mining activities.

Given that cocoa has historically been the primary cash crop and the foundation of the economy, the situation is pretty alarming.

Ghana currently ranks second to Cote d'Ivoire in terms of cocoa production.

According to GCCP, Ghana's common cocoa farmers are feeling the effects of the uncompetitive cocoa prices on the global market.

As a result, landowners and cocoa farmers are selling their land to miners for cash.

“They do not feel that their efforts and toil are being properly and fairly compensated, hence they cash-in and move out of the cocoa space,” the group stated.

The emerging development, the group said, remains a threat to long-term survivability of the cocoa industry.

Given this, the civil society group asserted that increasing the farm gate-price to levels that are commensurate with the work farmers put into producing cocoa beans is the surest solution to making the cocoa industry competitive.

In a statement issued by the independent campaign and advocacy platform for civil society actors in the cocoa sector, they argued that based on the working assumption of the Producer Price Review Committee (PPRC) of COCOBOD, cocoa farmers should receive a minimum of GH₵838 (US$98) per bag (62.5kg) of cocoa beans.

This figure was arrived at using the lowest projected values available including a LID of US$400 per tonne as agreed, according to the GCCP.

“As we always do, we have also looked at the numbers; and based on our very modest and somewhat conservative estimates, have arrived at a minimum 15-20 percent increment in the farm-gate price of cocoa for this season,” the statement captured.

Furthermore, they said this expectation was reached while taking note of all the challenges posed by the unstable Ghanaian cedi, threats posed by mining and the need for farmers to be paid adequate and commensurate prices for their efforts.

The current International Cocoa Organisation (ICCO) world cocoa market price – which averages Europe, New York and London futures stands at US$2,248 per tonne of cocoa beans.

“We also acknowledge the fact that Ghana is ‘forced’ to sell cocoa on the terminal market at a discounted price. Again, there has been a drastic drop in the origin differential/country premium – from over US$400 to a current US$65.

“In effect, the expectation is that the net country cocoa selling price (producer price) will be not less than US$2,103. Based on the 2020/2021 parameters for calculating the net FoB for cocoa beans, GCCP observed that the net FoB for the 2022/2023 cocoa season to be not less than 80 percent of the prevailing producer price, which should be around US$1,682.

“By applying the PPRC working assumption of a minimum of 70 percent of net FoB going to farmers, this translates into US$1,178 per tonne for the farmer. This figure is less than the US$400 LID that was instituted and charged by COCOBOD on all futures for the 2020/2021 cocoa season.

“Assuming COCOBOD gives all the US$400 LID to the farmers, it brings the farm-gate price to US$1,578 per tonne for the 2022/2023 cocoa season. Using the year-on-year Bank of Ghana (BoG) exchange rate of US$1 to GH₵8.5, cocoa farmers are expected to receive not less than GH₵13,413 per tonne of cocoa beans – which should translate into a minimum GH₵838 per bag of cocoa beans.”

It further reiterated that these estimations are based on the minimum projected figures, and the assumption that farmers will receive a minimum 100 percent of LID.