Ghanaian cocoa farmer Isaac Antwi smuggles his beans to Ivory Coast to earn a decent profit. The cedi’s sharp decline and soaring production costs have pushed many farmers in the world’s second-largest cocoa producer to illicit trade.
Antwi, living in Suhum, 46 miles from Accra, explained, “With the cedi losing value every day, selling in Ghana just doesn’t cut it. The prices are better across the border, and the stronger currency means I can feed my family and pay off my debts.”
Ghana is emerging from a severe economic crisis after securing a $3 billion IMF credit and restructuring most of its debt. However, the cedi has lost over 20 percent of its value against the dollar this year, severely impacting cocoa farming profitability. International cocoa prices topped $10,000 per ton in March but have receded recently. Production costs have jumped, with fertilizers and other farming materials becoming increasingly expensive. Poor road networks have also inflated transportation costs, further squeezing farmers’ margins.
Cocoa farmers must sell their produce to the state-run Ghana Cocoa Board (COCOBOD), which fixes prices to protect farmers from market volatility. In April, the government increased the cocoa price paid to farmers to $2,188 (33,120 cedis) per ton, a 58.26 percent hike. However, this hasn’t offset the rising costs and the allure of higher prices in Ivory Coast and Togo.
“If the government increased the cocoa price to match our neighbors, the smuggling would stop,” said another Suhum farmer, Serwaa Adjei. “We need to survive.”
Ghana’s cocoa sector, accounting for about 10 percent of the nation’s GDP, relies heavily on smallholder farmers. These growers are in an increasingly precarious situation. Dennis Nyameke, a veteran farmer from the Western Region, explained the economics behind smuggling. “A bag of cocoa sells for at least $137 in Ghana, but when we smuggle it to Ivory Coast, we can get close to $152. With four children to care for, I can’t afford to ignore that difference.”
Despite efforts by COCOBOD to tackle these challenges, farmers are still struggling. Fiifi Boafo, head of public affairs at COCOBOD, acknowledged the impact of smuggling, illegal mining, and adverse weather conditions on cocoa production. Illegal mining for gold, known locally as Galamsey, is rife in rural Ghana, impacting water supplies and keeping farmers from the land. “Illegal mining activities are cutting off farmers from their farms and polluting water bodies needed to irrigate cocoa farms,” Boafo said. He also noted climate change’s impact on cocoa yields. “We are doing a lot to improve the situation of the farmers. We are motivating cocoa farmers by paying them more for their produce, but the economic pressures are immense, and we are fighting a tough battle.”
Obed Owusu-Addai, a campaigner at EcoCare Ghana, a group advocating for community rights, called for comprehensive reforms. “The government must take urgent action to stabilize the cedi and support farmers with subsidies and better infrastructure. It’s not just about higher prices; it’s about creating a sustainable environment for our farmers to thrive.”
The cocoa sector, battling an outbreak of Cocoa Swollen Shoot Virus Disease, has seen a significant decline in production and revenue in recent years. Ghana has lost harvests from nearly 500,000 hectares of land, about 29 percent of its total cocoa production area of 1.7 million hectares. Ghana’s struggles have global implications. Industry experts estimate that over 100,000 tons of cocoa beans have been smuggled into Ivory Coast from Ghana since last year. Smuggling, combined with other challenges, led to a $ 500 million drop in cocoa revenue in the first quarter of 2024, according to recent data released by the Bank of Ghana.
Boafo said Ghana’s cocoa production is projected to reach 800,000 tons by year-end, reversing significant losses of recent years. With over one million people reliant on the cocoa industry in Ghana, the stakes are high. “We’re very optimistic,” Boafo said.
Source: The Guardian
