The never-ending cocoa producer price politics

Here we go again- ruling versus opposition party on the just announced producer price of cocoa.

It is an ongoing ritual where the ruling parties defend and the opposition criticise the price offered to farmers.

But can anyone really blame the main opposition New Patriotic Party (NPP) and their response to the new cocoa producer price?

No. After all, in opposition, the National Democratic Congress (NDC) not only pointed out the inadequacy of the price offered by their government but went as far as promising a specific amount to cocoa farmers if elected. 

In fact, there was an infographic that was circulated widely with an intriguing formula that suggested the NPP government in the 2023/24 cocoa season kept 74.53 per cent of the world market price per ton and offered farmers only 25.47 per cent.

Alternatively, it showed that in the 2016/17 season, the NDC government kept only 33.94 per cent of the world market price per ton and offered farmers 66.06 per cent. 

During the vetting process, the Finance Minister, Dr Cassiel Ato Forson, reiterated the NDC’s argument that cocoa farmers deserved a fair price and the NPP government should have offered farmers a much higher price than they did.

So, with the election won and a new cocoa season coming up, the only politically acceptable outcome was offering the price promised. But as we have seen, that was not the case.

The unfortunate outcome, in my opinion, is that even with some important policy steps that came with the announcement, the inability of the government to offer the price promised in opposition has dominated a lot of conversations.

Sure, you can be tempted to blame the opposition for driving and sustaining the narrative about promises not kept, but can you really blame them?

Economic realities

I refuse to believe that our policy-making politicians are not aware of the economic and policy realities that shape the determination of the producer price government offers our cocoa farmers every season.

The world market price is only one component of that economic reality. It is quite worrying anytime I observe the fairness and unfairness argument framed using just the world market price. 

There are other economic and policy realities – a) the exchange rate; b) the policy of forward sales versus the use of spot prices; c) a pricing formula that must contend with non-economic factors like expected crop yield when estimating revenue; d) operational expenditures of COCOBOD; and e) the monopoly enjoyed by COCOBOD.

Here is an important point worth noting. If the pricing formula is allowed to work the way it is designed to, there are times when changes to any of the economic inputs (world market price, exchange rate) should result in a lower producer price compared to the previous season.  

All these economic realities and our policy choices affect what price a given government can offer cocoa farmers. Any discussion of the fairness or otherwise of the cocoa producer price must acknowledge this. 

Political realities

Why do we, each cocoa season, regularly subject ourselves to this unending ritual? I am sure there is broad support for offering the cocoa farmer a fair price.

Anyone familiar with the toil of cocoa farmers, like my mother, will not argue against a cocoa producer price that allows them to have a decent socio-economic life. 

However, in a democracy with regular competitive elections, where rival political parties are seeking to win over voters, some of whom are cocoa farmers or live in cocoa growing regions and ultimately for power, a fair price is not only an economic determination but a political pronouncement as well.

This political reality means that no matter how sound the economic explanations of the new price offered by the CEO of COCBOD are, the reference point will continue to be what the government promised while in opposition.

And that is a difficult situation to deal with because I believe there are positive steps the government is taking to address some of the challenges facing COCOBOD. 

The re-introduction of free supply of cocoa fertilisers, insecticides, spraying machines, fungicides and free flower inducers, in my opinion, is designed to appease cocoa farmers who may express dissatisfaction with the government.

Lesson learned?

Will an opposition party restrain itself from promising a better producer price to cocoa farmers in the next election, knowing the economic realities and policy choices governing the cocoa sector?

I am not sure I can confidently say yes.

For now, though, I expect the opposition to leverage this for any possible political mileage it offers. 

For the government, the next election is three years away, which means it has time to make peace with cocoa farmers before the party’s successor to President Mahama faces voters.

When all is said and done, is this the last we will see of cocoa producer price politics? 

The writer is the Project Director, Democracy Project.