Increase in cocoa production cost does not reflect in prices - APRA

Cocoa sector has been accused of promoting deforestation

Decline in world market prices affects government’s ability to offer loans

Cocoa production expands to 1 million tons

Researchers of the Agricultural Policy in Africa (APRA), Ghana project have said the cost of cocoa farming has increased significantly (land, labour, inputs) but are not reflected in international prices and price fluctuations.

According to the team of APRA Ghana researchers, this results in declining profit margins, relatively high input prices, and increasing strains on large number of farmers to intensify production with high inputs.

In the last few years, world market prices have dropped sharply affecting ability of government to raise syndicated loans from cocoa and to supply cocoa services.

Also in the last decade, cocoa production expanded to nearly 1 million tons from under 200,000 tons in 1980s. This has been achieved by state pricing reforms and subsidized inputs for farmers that have encouraged them to rehabilitate and replant old cocoa plantations.

The research conducted by APRA show that average yields still remain low between 300-400 kg/ha (as compared to potential of 1,000 kg/ha).

Over 60% of farmers are estimated to be poor and most farmers are unable to follow extension recommendations because cost of inputs are comparatively high in relation to their profit margins.

Meanwhile, the cocoa sector has also been accused of promoting deforestation which also results in increasing cost of production and vulnerability of cocoa to infections, pests and premature old age.

APRA Ghana therefore wants stakeholders to create more diverse agroforests with different income generating products to hedge risk against fluctuating prices, including fruit trees – e.g. cola, allanblackia, coffee, and non-timber forest products and also focus on raising incomes rather than maximising yields.

Meanwhile, these findings were shared at a national dissemination workshop held on November 30, 2021 at the Alisa Hotel in Accra to share results of the five-year (March 2017 – May 2021) APRA Ghana project.

The workshop also discussed policy implications on how agricultural commercialisation can reduce rural poverty, empower women and girls, and improve food and nutrition security in Ghana.

The APRA Ghana project is hosted by the Institute of Statistical, Social and Economic Research (ISSER), and implemented by a team of University of Ghana-based researchers, including: Professor Joseph Yaro, Professor Kojo Amanor, Professor Joseph Teye and Dr. Fred Dzanku, among others.