Bonuses for Cocoa Farmers in Ghana

Over the past week, several sources reported that the Ghanian Cocoa Board (COCOBOD) released a second round of bonuses to cocoa farmers. According to the Joy Online, a total of GH¢16,035,161.35 (about $16.45 million) will be released to the Licensed Buying Companies for distribution to individual farmers. The amount translates to about GH¢1.71 ($1,75) per bag of cocoa. That does not seem much but for a country with an per capita income of $2,700 and many cocoa farmers making less than that, $1.75 per bag bonus makes a difference.

It is not clear, though, if that bonus is simply the high world market prices trickling down to the farmers. Much of the cocoa has already been sold in forward contracts and the current spot market prices apply to only a fraction of the cocoa sold. An more likely explanation is the election campaign going on in Ghana at the moment. The current president, John Kufuor, and the New Patriotic Party (NPP) came to power in 2004 and their term is up this December.

The candidate of main opposition party, the National Democratic Congress (NDC), has promised cocoa farmers to return to the policy of paying farmers 70% of the world market price. John Atta Mills claims that under his policy, cocoa farmers would be able to buy 13 bags of cement for the price of one bag of cocoa while the under the current government, they same bag of cocoa only fetches 6 bags of cement.

The NPP, of course, did not let this stand and hit back, claiming that the goal of paying farmers GH¢180 rather than GH¢75 per bag is unrealistic and will bankrupt the government. They also blamed the NDC government prior to 2004 for the neglect of and low prices paid to farmers then. It was under the NPP that the mass spraying of cocoa trees by the government was introduced.

The NDC is the party with which Jerry Rawlings, erstwhile Flight Lieutenant and head of two military coups d’état (1979 and 1981) legitimized his rule and entered the democratic era in 1992. The NPP coming to power in 2004 represented the first change of power under the new constitution.

Whether or not cocoa farmers will actually benefit more under one regime than another remains an open question. Traditionally, they have always been treated as cash cows by whatever regimes have been in power. Now they are least being wooed by politicians. If that translates into $1.75 more per bag of cocoa, that’s an added bonus.

Share: Email this to someoneTweet about this on TwitterShare on TumblrShare on FacebookPrint this page
Tagged on: , ,