COCOBOD prioritises farmer payments
The Ghana Cocoa Board has pledged to make cocoa farmer payments the organisation's top financial priority amidst growing concerns over funding challenges in the sector.
This commitment comes at a critical time when Ghana's cocoa industry faces mounting pressure, including smuggling of the beans to neighbouring countries despite declining local production.
Responding to a question from the Graphic Business during a meeting with some farmers, the new Chief Executive of the Board, Dr Ransford Anertey Abbey, said despite COCOBOD's inability to access international market funds this season, the organisation would prioritise payments for cocoa purchases over all other financial obligations.
This assurance aims to address mounting anxiety among farmers who are worried about potential payment delays.
"We will be extremely transparent with them and let them know what the situation is," the CEO stated, adding that when funds become available, payments for cocoa purchases would take precedence over other expenditures to ensure farmers receive their due compensation promptly.
He said by prioritising farmer payments and welfare, COCOBOD would maintain stability in the industry.
Farmers input
The new CEO said he would integrate cocoa farmers' input into all policy decisions, acknowledging their decades of experience and crucial role in the industry.
To address declining production, COCOBOD plans to intensify the rehabilitation of ageing farms while simultaneously pursuing an ambitious expansion into large-scale farming.
Dr Abbey pointed to successful models in Côte d'Ivoire and South American countries, suggesting Ghana needs to complement its traditional smallholder farming system with larger operations.
He said COCOBOD was also developing incentives to encourage collaboration with potential large-scale cocoa farming investors while maintaining support for the country's existing small-scale farmers who have been the backbone of Ghana's cocoa industry for generations.
In tackling the persistent challenge of smuggling, COCOBOD has initiated collaboration with National Security, with the National Security Advisor already assembling a dedicated team to craft comprehensive anti-smuggling strategies.
This coordinated approach signals a more aggressive stance against the illegal trade that has plagued the industry.
Sector challenges
As the world's second-largest cocoa producer after Côte d'Ivoire, Ghana faces significant challenges in its cocoa sector that demand immediate attention from incoming leadership at COCOBOD.
The sector has experienced a dramatic decline in production, falling from a record high of 1.033 million tonnes in 2020/2021 to 550,000 tonnes in 2023/2024, though COCOBOD aims to reach 650,000 tonnes in the current season.
This decline stems from multiple factors, including climate change impacts, widespread tree diseases and disruption from illegal mining activities.
Financial challenges stand at the forefront of COCOBOD's concerns. The organisation faces mounting debt and operational difficulties that have hindered its ability to make timely payments to farmers and maintain essential infrastructure.
The International Monetary Fund has identified COCOBOD's recurring annual losses as a significant threat to both the sector and Ghana's broader fiscal stability.
These losses stem from multiple factors: high costs from rolling over outstanding cocoa bills, elevated producer prices compared to operational costs and extensive quasi-fiscal operations, including fertiliser provision and rural road development.
The sustainability imperative presents another crucial challenge. As global chocolate manufacturers commit to deforestation-free supply chains and enhanced farmer incomes by 2025, COCOBOD must modernise its traceability systems and certification processes.
This transformation needs to occur while preserving Ghana's premium position in the global market and ensuring that new sustainability requirements remain manageable for the country's approximately 800,000 cocoa farmers.
Climate change poses an existential threat to the sector, with shifting weather patterns and rising temperatures endangering traditional growing regions.
This environmental challenge requires innovative adaptation strategies and robust support for farmers adapting to new conditions. The demographic challenge of an ageing farmer population also demands urgent attention.
With the average cocoa farmer now over 50, the sector must become more attractive to younger generations.
This necessitates a comprehensive approach to modernisation, including digitalisation, mechanisation and the development of value-addition opportunities that can make cocoa farming a viable and appealing career choice for Ghana's youth.