Ghana’s cocoa industry is facing a crisis requiring urgent restructuring. President John Mahama warned of a potential $1.3 billion loss impacting farmers’ wages. The current government-controlled cocoa pricing system fails to adapt to market demands, threatening industry sustainability and farmer livelihoods. Without significant changes, both farmers and the confectionery sector might face dire consequences.
Ghana faces a significant cocoa crisis that necessitates urgent structural reforms to ensure its future viability. Newly-elected President John Mahama highlighted the potential loss of $1.3 billion for Cocobod, the governing body for cocoa in Ghana, due to year-long rollover contracts amid high crop prices. This situation is troubling as cocoa farmers, along with those in nearby Ivory Coast, strive to achieve a living wage, an objective that now appears distant.
The potential $1.3 billion loss could have financed improvements in regenerative agriculture and increased raw farmgate prices, which remain inadequate against global cocoa price rises. Last year, cocoa prices were reportedly trading at around $12,000 per tonne but have since stabilized between $7,000 and $8,000 per tonne, still significantly higher than two years ago.
The core issue lies within Ghana’s government-controlled cocoa management system established decades ago to stabilize prices. This system lacks flexibility, often selling cocoa stock a year ahead, hindering its ability to adapt to current market dynamics. As a result, while there have been minor pay increases, these fall short of enabling farmers to achieve a living wage.
Industry experts emphasize that unless a comprehensive overhaul occurs in how cocoa is traded in West Africa’s markets, the sustainability of both the cocoa industry and the relying confectionery sector will be jeopardized. The situation underscores the need for immediate and effective changes to protect the livelihoods of cocoa farmers and the larger economy dependent on this vital sector.
The cocoa industry in Ghana is at a critical juncture requiring substantial reforms to address both economic challenges and the living wage plight of farmers. The $1.3 billion potential loss emphasizes the need for system changes in cocoa management, ensuring that the sector can adapt to market fluctuations while promoting the sustainability necessary for future success.
Original Source: www.confectioneryproduction.com
