Unpaid cocoa growers in Ghana are compelled to go hungry

Joseph Bermah Dautey, a cocoa farmer from Ghana, delivered six bags of beans for sale months ago, yet he is still awaiting payment from the country’s regulator. This delay has compelled the 65-year-old to restrict his meals to just one per day.

He is one of many farmers in Ghana, the world’s second largest cocoa producer, facing challenges in securing funds for food, covering their children’s school fees, and investing in essential farm upkeep as thousands of tons of unsold beans accumulate.

The scenario in Ivory Coast, the largest producer, mirrors this trend, as there has been a significant decline in global cocoa demand, resulting in a halving of global prices over the past year to two-year lows of approximately $4,000 per metric ton.

Prior to that, a deficient harvest had resulted in a surge in prices on global markets.

Dautey, a former teacher, informed Reuters that he is struggling to afford his older daughter’s tuition, while his younger daughter continues to reach out for financial support.

He invested 3,600 cedis ($328.77) in maintaining a 25-acre farm in Assin Foso, a prominent cocoa-growing district, using borrowed funds, and currently has an outstanding debt of 2,000 cedis.

“For approximately three weeks, I have been eating once a day; things have been quite challenging for me,” Dautey expressed. “Its impact on my life is so profound that words fail to capture it.”

Another farmer, Jacob Agbeko Tetteh, informed Reuters that his children are unable to return to university due to his unpaid compensation for six bags of cocoa he delivered. He does not have the financial resources to replace the aging cocoa trees, which have seen a decrease in yield.

International traders cease purchasing.

The annual farmgate price for Ghana, determined by the market regulator Cocobod, stands at 58,000 cedis per ton, equivalent to nearly $5,300. This situation results in international traders experiencing losses on their cocoa purchases from Ghana. Their purchases have decreased, resulting in farmers not receiving payment.

Last week, the regulator announced that it has approximately 50,000 metric tons of unsold cocoa at ports and is currently in discussions with farmers and the Finance Ministry to address the issue.

Farmers informed Reuters that they possess considerable unsold stocks of beans at home, yet lack access to buyers since the district officers of the Licensed Buying Companies, the sole entities permitted to purchase from the farmers, have shut their shops.

Cocoa has a shelf life of 6-12 months in hot, humid countries before it begins to lose its quality.

DISCREPANCY BETWEEN GLOBAL PRICES AND FARMGATE PRICES

Ghana cocoa farmers are missing meals and facing difficulties with school fees as 
Last week, the licensed buyers called on the regulator Cocobod to urgently secure funding for the purchase of around 300,000 tons of cocoa.

A coalition of cocoa farmers in Ghana expressed their readiness to accept reduced prices for future deliveries, provided the government consents to sign a memorandum of understanding that ties farmgate rates to international market prices moving forward.

Nonetheless, the Ghana Cooperative Cocoa Farmers and Marketing Association, representing approximately 395,000 members, emphasized that the government must first settle its debts for beans that have already been delivered at the official price. “The payments for what they have already purchased and not yet compensated should be addressed immediately,” stated Theophilus Tamakloe, the association’s national vice president, in an interview with Reuters. “Following that, they can engage with us to discuss a potential reduction of the farmgate price.”

Tetteh expressed his willingness to accept a government price reduction if it allows the regulator to buy the remaining stocks and compensate for the beans that have already been delivered. “It’s business, so if prices rise in the international market, farmgate prices should also increase.” “If they come down, the farmgate price must come down too,” said the farmer, who is still drying fresh cocoa with no place to sell it.