The Poor Produce the Golden Bean, the Irony of Ghana’s Cocoa Sector | ILAPI

Cocoa, a cash crop referred to in this article as the golden bean because of its enormous benefits is produced in Eastern, Western, Ashanti and other parts of Ghana. Historically, it is believed that Tetteh Quarshie brought cocoa to Ghana from Fernando Po (in modern day Equatorial Guinea) in the year 1876. Although the golden bean is produced in other parts of the world, Ghana and Cote d’Ivoire are the largest producers in the world accounting for more than 50% of global production (Statista.com).

There is about $9.9 billion in the golden bean industry with a forecasted growth rate of 3.76% annually with Ghana enjoying about $2 billion from the golden bean industry (COCOBOD). A tonne of golden bean sells at GHS 8,249 and a bag currently sells at GHS 515. In Ghana, government is the main exporter of golden bean with highly supervised private participation (Section 4 (6) of PNDC Law 81).

Government sets the price for cocoa at the beginning of each golden bean season but ironically, golden bean is not a seasonal crop. Despite the huge sums of money in the golden bean sector, most golden bean farmers do not enjoy decent lives and can be described at best as poor.

First, government does not give them the exact price on the international market. On average, a tonne of cocoa sells for almost GHS 12,900 ($2,400) and ironically the government, through COCOBOD, buys it at only GHS 8,249 ($1,523) thereby robbing the already poor golden bean farmer of about GHS 4,651 ($877) Again, some of the private buyers of the golden bean who act on behalf of licensed buying companies in the golden bean producing areas popularly referred to as “Cocoa Krakyes” can be liken to the equivocator in Shakespeare’s Macbeth because they adjust the scales used to measure the golden bean hence robbing the golden bean farmers of their sweat. We recommend that government should strictly enforce the use of electronic scales that cannot be adjusted by all golden-bean buying companies.

The Cocoa Krakyes also mostly rob golden bean farmers of their deserving bonuses making the golden bean farmers perpetual victims of Cocoa-Krakye and state sponsored poverty. For this to be changed, we advocate that the top hierarchy of these licensed buying companies should enforce strict measures to combat the cheating of farmers at the various buying centers. It is also advocated that these companies give their operations a more human face with less emphasis on profit. They should rather focus their energies on helping achieve at least Sustainable Development Goal 1(no poverty) through their operations with these farmers who are mostly rural dwellers with a meagre daily income estimated to be approximately GHS 2.17-2.44 ($0.40-0.45).

For Ghana to enjoy a greater pie of the huge sums of dollars in the golden bean industry, no modicum of golden bean should be exported without being processed. The golden bean industry should also be liberalized and allow the free market to set the price without government intervention. That is, going forward, the export of processed golden bean should virtually be in the hands of the private sector. Golden bean has played a major role in our economic success as a nation. Right from independence, revenue from the golden bean has played a major role in financing major projects and presently serves as a source of livelihood for over 800,000 farmers in the country. Though this has been a “wonder crop” for several generations, the sector has not been bereft of challenges. Due to our association of farm size to harvest, farmers consistently keep clearing new lands to increase their harvest instead of ensuring their farms produce to the optimum.

In the golden bean sector, Ghanaian farmers produce an average yield of 350kg-400kg per hectare whilst Indonesia (the third-largest producer of cocoa after Ivory Coast and Ghana) achieves an average of 800kg per hectare as compared with a maximum of 1.5 to 2 tonnes per hectare observed at research stations. This means that even though we produce a lot of golden bean than Indonesia, any issue that leads to a reduction in land area cropped with golden bean will have a significant impact on total yield in Ghana than it would have in Indonesia. A perfect example is the galamsey scare that was ravaging several tracts of farmland. Yield per hectare in Ghana is comparatively low partly because most golden bean farms are poorly managed, and due to the smuggling of state sponsored fertilizers by unscrupulous persons, they do not reach the golden bean farmers for onward applications on their golden bean farms.

For this, we recommend that the fertilizer welfare policy by government should be changed from a lump sum one to a per unit one. That is golden bean fertilizer subsidies should be added to the price of the golden bean rather than buying the fertilizers for the farmers. After all, most golden bean farmers buy their own fertilizers. Sadly, more production does not always equal more income for a nation. This is particularly true in our case as a nation that produces many materials in their raw form for export. For most cash crops produced, we export them in their raw state with no or very little processing; this means we get very little value for our bumper harvests.

The chocolate industry is the best depiction of this. It is gratifying that Ghana and Cote d’Ivoire has finally managed to come to a consensus as to how to trade golden bean on the global market. According to a September 4, 2018 report by GraphicOnline, the Chief Executive Officer of COCOBOD, Mr Joseph Aidoo, is reported to have said at a meeting between representatives from Ghana and Cote d’Ivoire that “One of the things we will do is to try and make our trading systems work along the same lines. We want it to be such that we can say we are both selling at this time, at this price and anything below that we will not sell,”. This strategy has been done by these countries to ensure they get the most out of their produce.

Far more gratifying is the consensus established between the major golden bean buyers and the joint committee to a floor price of $2,600. Nevertheless, one wonders what will happen to the golden beans should the price on the world market fall below the floor price set by the joint commission of these two countries? Will the golden bean be stored? Very unlikely as we cannot do this partly because initiatives such as the silos built by Dr Kwame Nkrumah have been abandoned and probably left as monuments of a great past. Will COCOBOD fix them? That’s an alternative that can be explored. Otherwise, the other ‘dreaded’ but the seemingly better alternative of processing the golden beans locally will have to be given a lot more attention. This can be as “simple” as encouraging a local bean-to-bar movement.  

 

Authors

Peter Dadzie Research

Fellow, Institute of Liberty and Policy Innovation (ILAPI)  

 

Abednego Opey Brandy

Winner, Kuapa Kokoo/MPA Inter Tertiary Debate  

Source: ILAPI