COCOBOD Focuses on Prioritizing Payments to Farmers

The Ghana Cocoa Board (COCOBOD) has pledged to make the timely payment of cocoa farmers a primary financial priority as the sector grapples with mounting challenges, including funding shortages. This promise comes at a pivotal time when Ghana’s cocoa industry is under increasing pressure, particularly due to the smuggling of cocoa beans into neighboring countries, despite a significant decline in domestic production.

Dr. Ransford Anertey Abbey, the newly appointed Chief Executive Officer (CEO) of COCOBOD, reassured farmers that, despite the organization’s difficulties in accessing international market funds this season, the payment for cocoa purchases would be the top financial priority. This move aims to ease the anxiety of cocoa farmers who have been concerned about potential delays in receiving their payments.

“We will be transparent with them and keep them informed about the situation,” Dr. Abbey said, underscoring the importance of prioritizing farmer payments above all other financial obligations once funds become available. The CEO further explained that ensuring farmers receive their due compensation promptly would help maintain stability within the sector.

Dr. Abbey emphasized his commitment to incorporating the input of cocoa farmers into the organization’s policy decisions, recognizing their vital role and decades of experience in the industry. To combat the decline in production, COCOBOD intends to intensify efforts to rehabilitate aging cocoa farms. Simultaneously, the organization plans to explore large-scale farming as part of an ambitious expansion strategy.

The CEO pointed to successful models in countries such as Côte d’Ivoire and various South American nations, suggesting that Ghana could benefit from supplementing its traditional smallholder farming system with larger commercial operations. Dr. Abbey also highlighted COCOBOD’s efforts to develop incentives that will attract investment in large-scale cocoa farming while maintaining support for the nation’s small-scale farmers, who have long been the backbone of Ghana’s cocoa industry.

A major challenge COCOBOD continues to face is cocoa smuggling, which has further destabilized the sector. To tackle this issue, COCOBOD has partnered with the National Security apparatus. The National Security Advisor has already assembled a dedicated team to craft and implement effective anti-smuggling strategies, marking a more aggressive stance against the illegal cocoa trade that has long been a problem in the country.

Ghana, as the world’s second-largest cocoa producer after Côte d’Ivoire, faces significant hurdles in its cocoa industry. One of the most pressing concerns is the sharp decline in production, which has plummeted from a record high of 1.033 million tonnes in the 2020/2021 season to just 550,000 tonnes in the 2023/2024 season. COCOBOD aims to increase this number to 650,000 tonnes in the current season. This decrease in production is primarily attributed to the impacts of climate change, the spread of tree diseases, and disruptions caused by illegal mining activities.

Financial sustainability remains a central challenge for COCOBOD. The organization is struggling with high levels of debt and operational difficulties that have impeded its ability to make timely payments to farmers and maintain critical infrastructure. The International Monetary Fund (IMF) has warned that COCOBOD’s ongoing financial losses pose a serious risk not only to the cocoa sector but also to Ghana’s broader fiscal stability.

The persistent losses stem from several factors, including the high cost of rolling over cocoa bills, producer prices that exceed operational costs, and the extensive quasi-fiscal operations COCOBOD undertakes, such as the distribution of fertilizers and the construction of rural roads. These issues have strained the organization’s finances and complicated its efforts to improve the sector’s performance.

Another critical issue facing the cocoa industry is sustainability. With global chocolate manufacturers committing to deforestation-free supply chains and enhanced farmer incomes by 2025, COCOBOD must overhaul its traceability and certification systems. This transformation is essential for maintaining Ghana’s premium position in the global cocoa market while ensuring that the new sustainability requirements are manageable for the country’s approximately 800,000 cocoa farmers.

Climate change continues to present a grave threat to the sector, with rising temperatures and shifting weather patterns affecting traditional cocoa-growing regions. Addressing these environmental challenges requires innovative adaptation strategies and substantial support for farmers who are struggling to cope with these changes.

In addition to these environmental issues, the cocoa sector also faces a demographic challenge. The average cocoa farmer in Ghana is now over 50 years old, and the industry needs to become more attractive to younger generations. To achieve this, COCOBOD plans to modernize the sector through the introduction of digital technologies, mechanization, and the development of value-added opportunities that can make cocoa farming a more viable and appealing career for Ghana’s youth. This modernization strategy is essential to ensuring the long-term sustainability of the cocoa industry and reversing the trend of an aging farmer population.

while the Ghanaian cocoa sector faces a number of significant challenges, COCOBOD is determined to prioritize the welfare of cocoa farmers and invest in both short-term and long-term solutions that will enhance the sustainability and profitability of the industry.