The Co-Chair of the NPP Agric Policy Committee, George Oduro has questioned whether cocoa farmers are receiving an adequate share of the value of their produce under the current pricing arrangement.
Speaking to Isaac Addae on Morning Starr on Starr FM, Mr Oduro argued that the 70% share allocated to cocoa farmers should be reflected in the producer price, particularly given prevailing international cocoa prices and the rising cost of production.
He said calculations based on the Bank of Ghana’s exchange rate and a minimum international cocoa price of about $5,500 per tonne indicate that the amount reaching farmers is inadequate.
Mr Oduro explained that adding the Living Income Differential (LID) to the international cocoa price brings the figure to about $5,900 per tonne.
He said applying the 70% farmer-share arrangement to the calculation should result in a higher amount for farmers.
“Farmers, they buy, we decide, and then the labour cost has not come down. I’m sure that one, you are aware that labour cost doesn’t come down in Ghana here,” he said.
According to Mr Oduro, farmers continue to face high production costs, particularly labour, while the cost of inputs has also remained a concern.
He questioned why farmers should be paid at the current rate when their production costs remain high.
“If the labour cost maintains or goes up, why should you pay the farmer at that price?” he asked.
Mr Oduro also questioned the basis for the cocoa price being used, particularly the GH¢5,100 figure.
“We are asking them where do they get the price? Because the price COCOBOD use is the ICO,” he said.
He further argued that the international cocoa price he cited was significantly higher than the figure being used in the domestic calculation.
Mr Oduro said the calculation should take into account the prevailing international cocoa price, the applicable LID and the exchange rate used in determining the value of cocoa.
He maintained that using the Bank of Ghana’s exchange rate for the calculation was a conservative approach, arguing that actual dollar transactions in the market could involve higher exchange rates.
Mr Oduro therefore called for greater clarity on how the producer price is determined, arguing that the 70% share intended for farmers should be reflected in the price they receive for their cocoa.
Source: Starrfm.com.gh/Pamela Quayson
