A large number of cocoa farmers in Ghana – the second largest producer in the world – are resorting to illegal trade in order to survive, despite the recent rise in the prices of their crops and the state’s efforts to stabilize the sector.
“The cedi (Ghana’s currency) is losing value every day, and selling in Ghana is no longer enough,” Issac Antwi, a Ghanaian cocoa farmer who had to cross to neighboring Ivory Coast to sell his crop for a higher return, was quoted by AFP as saying.
Mr. Sayed is backing down
Ghana is emerging from one of its worst economic crises in years, after obtaining a $3 billion loan from the International Monetary Fund and restructuring most of its debts.
But the decline of the cedi, which lost more than 20% of its value against the US dollar this year, seriously affected the profitability of cocoa cultivation, despite the rise in global prices for this material used in making chocolate.
Production costs have risen dramatically, and purchasing fertilizers and other agricultural materials has become a greater burden on farmers.
Poor road networks also inflated transportation costs, further reducing farmers’ profit margins.
The sector is highly regulated in Ghana, with cocoa farmers forced to sell their produce to the Ghana Cocoa Board, a public body that sets prices to protect farmers from market fluctuations.
The government recently increased the purchase price of cocoa from farmers to $2,188 (33,120 in local currency) per ton, an increase of 58%, but this was not enough to compensate for the high production costs or reduce the attractiveness of the higher prices in neighboring Ivory Coast and Togo.
“If the government increases the price of cocoa to match that of our neighbours, smuggling will stop,” says Serwa Adji, another farmer in Sohum.
Small farms
Ghana’s cocoa sector represents about 10% of the country’s gross domestic product, relies heavily on small farmers, and supports one million people out of 33 million in this West African country.
However, cocoa farmers find themselves in an increasingly worsening situation.
Denis Nyameki, a farmer in the western region, explains the economic reasons for smuggling.
“A bag of cocoa sells for no less than $137 in Ghana, but when we smuggle it to Ivory Coast, we can sell it for about $152,” says Nyameke, a father of four children.
Sector experts estimate that more than 100,000 tons of cocoa beans have been smuggled to Ivory Coast since last year.
The cocoa sector faces several challenges, including illegal gold mining, known locally as galamsey, which is widespread in rural Ghana, affecting water supplies and preventing farmers from accessing their land. But bad weather conditions, as well as a disease known as cocoa bloated buds, are also causing crop failure.
According to the Ghana Cocoa Board, Ghana has lost 500,000 hectares of cocoa-cultivated area in recent years, or about 29% of the total land allocated to cocoa in the country.
Cocoa revenues fell by $500 million during the first quarter of 2024, according to the Central Bank of Ghana.
“We are fighting a difficult battle,” says Fifi Boafo, head of public affairs at the Ghana Cocoa Board, noting that “major efforts are being made to improve the situation of farmers.”
Obed Owusu Addai, an activist with EcoCare Ghana, a group that advocates for the rights of cocoa farmers, calls for major reforms including “stabilizing the cedi exchange rate” and “granting subsidies” to farmers.
