Ghana has increased the price it pays to cocoa farmers by more than 60%, a move that is likely to put pressure on rival producers like Ivory Coast and could push global cocoa costs even higher.
Finance Minister Cassiel Ato Forson announced on Monday that the new producer price will be $5,040 per tonne, up from the previous rate of $3,100.
This substantial increase is a fulfilment of a campaign promise by President John Mahama, who pledged to ensure farmers receive at least 70% of the Free-On-Board (FOB) value of cocoa.
Ghana, the world’s second-largest cocoa producer, typically sets its prices before Ivory Coast, the largest producer, which currently pays its farmers around $3,900 per tonne.
The government’s decision is aimed at rewarding farmers and keeping them in the cocoa sector, a key part of Ghana’s economy.
Credit: GPO
Forson also announced the reintroduction of a government programme to provide farmers with free fertilisers, insecticides, and other tools to boost crop yields and income.
The new price is expected to help address the issue of some farmers selling their land to informal gold miners, which has negatively impacted cocoa production.
The move comes at a time when global cocoa prices are already high due to climate challenges and ageing farms.
Ghana’s price controls are intended to stabilise farmer earnings, but critics have previously argued that these controls have not kept pace with global market highs.
