ghana
Cocoa - the backbone of the economy
For most of this century, cocoa has been Ghana’s biggest earner, accounting for
one-third of total exports - the second largest export earner after gold.
Ghana follows Ivory Coast in cocoa production. Between them, the two countries produce
60% of global output. According to the government, almost half of the population
depends in some way or other on the sector.
"
There are about 700,000 cocoa farmers in
reputation for high quality cocoa, and in the 1960’s
Ghana, and an average of nine people rely
production reached about 560,000 tonnes.
on that single cocoa farmer, so immediately
one is looking at a figure of about seven million
to 160,000 tonnes. A combination of factors -
people, just under half the population," says John
drought, bushfires, neglect and poor management -
Newman, chairman of the state-owned Cocoa
caused the country to lose its lead in the sector.
Marketing Board (Cocobod).
Cocoa is not indigenous to Ghana, but originated
a steady recovery, and now averages 400,000
tonnes per year. Government has a target of reach-
the tree Theobroma cacao. According to Ghanaian
ing 550,000 tonnes in the medium term and
history, it was introduced to the country in 1898 by
750,000 tonnes in the long term. The medium term
who had an interest in farming. Returning
c o c o a
Since the late 1980s, production has been making
from South and Central America. It is the seed of
Tetteh Quarshie, a blacksmith from Accra,
from a trip to Fernando Poo (Equatorial
target can be reached quite quickly, Mr
Newman believes. "Yield is relatively low at
present, at 350-400 kilos per hectare.
Guinea) he brought back cocoa seeds
“With better agronomic practices this
with him and planted them in
could increase to about 600 kilos, the
Ghana. The crop soon took off,
and seeds were sent to other
West African countries, where
it began to thrive too.
Ghana soon became the
world's leading cocoa
producer, with a
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In the early 1980s, however, production declined
same as Ivory Coast."
This alone could bring production to 500,000 tonnes.
Considerable losses have
been caused by disease,
pests and poor
maintenance of farms.
ghana
Part of the problem is that the
ing its attention to liberalising
stock of cocoa trees is ageing,
external marketing. In the
more prone to disease, and past
2000/2001 season, private com-
prime yielding years. Re-planting
panies will be able to export 30%
is costly and takes time before
of what they purchase. Only a
producing marketable cocoa. The
small part of the crop will be
sector also needs to attract a
available (about 10%) to start
younger generation of farmers.
with. Strict conditions apply; only
The average cocoa farmer is 55
those companies which have
years old.
been able to purchase a mini-
Ghanaian cocoa is known for
mum of 10,000 tonnes of cocoa
its high-grade quality, due, in part
in the three previous seasons will
at least, to the smallholder
qualify.
method. "It is the fermentation
“We want to nurture them into
and drying that really produces
the market slowly, and make sure
the kind of quality that we have.
they can hold their own against
The farmer is a smallholder, and
the big players," explained Mr
takes the trouble to sort the bad
Newman. "We don't want them to
nuts from the cocoa. There is a
rush into selling cocoa on the
lot more of the human aspect,
commodities market, because
people take pains to look after
there are so many conditions, so
their product unlike in larger-
many rules, so much to learn."
scale production."
The Cocoa Marketing Board, the
Each farmer produces about 10
bags of cocoa, or half a ton.
wholly-owned subsidiary of
Cocobod, will continue to handle
When the bright yellow pod is
the bulk of sales.
ripe, it is harvested, the farmer
Slump in world price
splits open the pod, scoops out
the beans, and covers them with
leaves to ferment for five or six
days. Then they spread them on
mats on wooden stilts to dry in
the sunlight. In the evening they
are covered with leaves so that
they can breathe, removing the
leaves in the morning. Drying
takes about 10 days, after which
the product is delivered to a buying point of one of the licensed
companies.
Gradual liberalisation
In 1993 domestic production
Coming under donor pressure
of the world price. The slump in
to liberalise the sector, the gov-
prices appears mainly to be an
ernment is in a difficult position.
increase in availability of cocoa
Over the past decade it has been
on the market - production
ensuring farmers' incomes, by
increased in Ghana, Ivory Coast
setting producer prices and this
and Indonesia, while consump-
policy has no doubt contributed to
tion dropped. Added to this was
the expansion of the sector. But
the liberalisation of the sector in
the sharp drop in cocoa prices in
Ivory Coast, making more cocoa
1999 means that the government
available on the market.
is paying dearly for this policy.
Observers also believe that
Cocoa prices dropped more or
cocoa fell victim to the general
less 30% between 1998 and
recession in the world economy;
1999, but the government made
considered as a luxury product,
a commitment to keep the
consumption of cocoa declined.
was partially liberalised, and
producer price at the same level.
there are now about 20 compa-
This means that cocoa farmers
ernment policy of price support.
nies registered to buy cocoa from
are being paid about 70% of the
"It's an issue of government
the farmers. Under donor pres-
world price, much higher than the
vision and policy. The cocoa
sure, the government is now turn-
original agreement of up to 60%
farmer is so important. They have
Ghana cocoa is known for
its high-grade quality, due
in part at least to the
smallholder method
Mr Newman defends the gov-
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ghana
been taxed so much over the years, contributing
substantially to the social development of the
country."
The recent introduction of VAT at 10% is fortunate, as the government will get more revenue
from its tax regime, allowing it to lower its tax on
cocoa.
Supply and demand was also a factor. But the
surplus of supply over demand is set to continue
over the next few years, as production increases in
EU chocolate directive
Another worry for Ghanaian cocoa is the effect of
the recent EU ruling on the content of chocolate.
This ruling allows products to be marketed throughout the EU with the name "chocolate" even though
up to five per cent vegetable fat replaces some of
the cocoa. Many believe it will have an effect.
"The decision denies producers the opportunity to
sell about 200,000 tonnes of cocoa," says Mr
Newman. He believes that
Malaysia and Indonesia.
using vegetable fat will
The example of liberalisation in Ivory Coast has also
change the component of
chocolate, and the taste pat-
been caught in this depress-
“It's an issue of government
vision and policy. The cocoa
farmer is so important. They
have been taxed so much
over the years, contributing
substantially to the social
ing situation, and it has
development of the country."
of the label.”
raised concern about going
any further. There, liberalisation coincided with the drop
in world prices, causing
severe problems for cocoa
farmers. "Ivory Coast has
caused a lot of problems.
The higher prices paid for cocoa in Ghana has
led to problems of smuggling and the risk that
cocoa coming in was not up to Ghana’s standards.
Efforts are being made to curb this, by putting strict
quality control mechanisms in place.
labelling should be clear on
the percentage of vegetable
fat "but the average person
who is buying chocolate is
not looking at the nitty-gritty
Ghana have such a big part
decent prices which would
Newman.
Directive specifies that the
Since Ivory Coast and
Farmers are not being paid
enable them to continue planting cocoa," says Mr
terns of the consumer. The
of the market, efforts are
being made for the two countries to work together.
Meetings are held at ministerial level, to try to find
common ground to push the cocoa market, not only
on price but also promotion, consumption and support to farmers.
Value-added processing has been an average of
20% in the last few years, and government plans
that this should rise to about 30%.
Each farmer produces about 10 bags of cocoa, or half a
ton. When the bright yellow pod is ripe, it is harvested, the
farmer splits open the pod and scoops out the beans, and
covers them with leaves to ferment for five or six days.
Then they are spread on mats on wooden stilts and dried
in the sunlight. In the evening they are covered with
leaves so that they can breathe, removing the leaves in
the morning. Drying takes about 10 days, at the end of
which the product is delivered to a buying point, one of
the licensed companies.
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