‘I’m a Cocoa Farmer Too’: President Mahama on Value Cuts, Farmer Hardship, and Cocoa Sector Crises

Published on: February 17, 2024

In a striking personal admission, Ghanaian President John Dramani Mahama has directly linked national cocoa policy to the lived realities of farmers, stating, “I’m a cocoa farmer too.” Speaking at the inaugural Ghana Tree Crops Investment Summit, he addressed the recent, highly contentious reduction in the farmgate cocoa price and its tangible impact on rural households. This article provides a comprehensive, SEO-optimized analysis of the policy shift, the volatile global cocoa market, and the critical need for farmer-centred reforms in the world’s second-largest cocoa producer.

Introduction: A President’s Personal Stake in Ghana’s Cocoa Crisis

The Ghanaian cocoa sector, a cornerstone of the national economy and the livelihood for over 800,000 families, is navigating a period of acute tension. At the heart of this tension is a fundamental disconnect between global market signals and the income security of the farmers who power the industry. President Mahama’s recent statements, made at a high-profile summit on February 17, 2024, have cast a sharp light on this issue. By declaring his own status as a cocoa farmer with 50 acres of planted land, he moved the policy debate from abstract economic theory to personal and familial consequence. His core message was unambiguous: government pricing decisions must be rooted in an empathetic understanding of their effect on farmer welfare, rural education, and family stability. This comes in the immediate aftermath of the Ghana Cocoa Board (COCOBOD) slashing the official farmgate price per bag by nearly 30%, from GH¢3,625 to GH¢2,587. This analysis unpacks the layers of this crisis, examining the global price dynamics that prompted the cut, the domestic policy response, and the path forward for a sustainable and equitable Ghanaian cocoa industry.

Key Points: The Core of the Debate

• Personal Connection: President Mahama identifies as a cocoa farmer, using his own experience to underscore the human cost of pricing policies.
• Price Cut Justification: The government reduced the farmgate price to align with a sharp decline in international cocoa prices after they reached historic highs.
• Global Volatility: International cocoa prices surged to over $10,000 per tonne in 2024 before falling, creating a “rollercoaster” effect for producer nations.
• Economic Stakes: Cocoa is Ghana’s primary agricultural export and a vital foreign currency earner, supporting millions across the value chain.
• Policy Imperative: The President stressed that future reforms must prioritise long-term farmer revenue, sustainability, and equity to safeguard the sector’s future.
• Summit Context: The speech was delivered at the Ghana Tree Crops Investment Summit, which aims to diversify and add value to key tree crops like cocoa, cashew, and oil palm.

Background: Ghana’s Cocoa Economy at a Crossroads

The Pillar of the National Economy

Ghana’s identity as a nation is inextricably linked to cocoa. Following Côte d’Ivoire, it is the world’s second-largest producer, responsible for approximately 20% of global supply. The sector’s importance transcends farming; it fuels export revenues, supports ancillary industries (transport, logistics, processing), and is the primary income source for a vast rural population. The livelihoods of more than 800,000 farm families, and millions more in dependent communities, hinge on the annual producer price set by COCOBOD.

The 2024 Price Rollercoaster: From Record Highs to Correction

Understanding the recent policy requires a look at the unprecedented global market dynamics of 2023-2024. Driven by concerns over supply deficits from West Africa (due to climatic pressures like Harmattan winds and disease), cocoa prices on international exchanges skyrocketed. In December 2023 and early 2024, prices breached the historic psychological barrier of $10,000 per metric tonne, a level unimaginable just years prior. This surge initially suggested windfall revenues for producing countries. However, as the main crop harvest progressed in early 2024, improved production forecasts from key regions triggered a sharp market correction. Prices fell significantly, erasing the earlier gains. This volatility is the primary contextual factor cited for the adjustment in Ghana’s domestic pricing.

Analysis: Deconstructing the Price Cut and the Farmer-Centric Call

The Mechanics of the Farmgate Price Reduction

The decision by COCOBOD to reduce the farmgate price from GH¢3,625 to GH¢2,587 per 64kg bag represented a reduction of approximately 28.6%. The government’s stated rationale was straightforward: to synchronise the domestic price with the now-lower international market reality to which Ghana’s cocoa is tied. The logic follows that if global prices fall, the price paid to farmers cannot sustainably remain at a level that would create a massive financial drain on COCOBOD’s reserves and distort the market. However, this technical explanation collides directly with the economic reality for farmers, who face fixed costs for labour, agrochemicals, and land that do not decrease when the farmgate price does.

“I Am a Cocoa Farmer Too”: The Politics of Empathy and Policy

President Mahama’s personal declaration is a strategic and emotive rhetorical device with several layers:

1. Legitimacy: It grounds his authority in shared experience, moving beyond a purely technocratic or political perspective.
2. Moral Framing: It transforms the price cut from a cold economic adjustment into a decision with direct personal and familial consequences. “It affects me too,” he noted, framing policy as an issue of shared national sacrifice or, conversely, shared hardship.
3. Call for Empathetic Governance: The statement is a plea for policy-making that begins with the farmer’s experience. He advocates for a system where pricing decisions are made with a visceral understanding of their impact on school fees, healthcare, and food security in cocoa-growing communities.

The Structural Vulnerabilities of the Ghanaian Cocoa Farmer

The current crisis highlights long-standing structural issues:

• Price Pass-Through Lag: There is often a time lag between global price movements and domestic price adjustments, leaving farmers vulnerable during periods of rapid decline.
• Lack of Direct Market Access: Farmers are price-takers through COCOBOD, with limited ability to capture more value or hedge against price swings.
• Cost Inflation: While farmgate prices fluctuate, the costs of farming inputs (fertiliser, pesticides, hired labour) have trended upward, squeezing profit margins.
• Climate & Disease Pressures: Years of drought, excessive rainfall, and diseases like Swollen Shoot Virus have reduced yields per hectare, meaning farmers produce less even as per-bag revenue drops.

Practical Advice: What This Means for Stakeholders

For Cocoa Farmers and Farming Communities

• Diversify Income: Explore inter-cropping with food crops (plantain, cassava) or other tree crops (cashew, citrus) to mitigate reliance on a single annual cocoa income.
• Engage with Cooperatives: Strengthen farmer-based organisations to aggregate voices, access better financial services, and potentially negotiate collectively.
• Document Impacts: Keep records of how price changes affect household budgets, school enrolment, and farm investments. This data is crucial for advocacy.
• Access Support Programs: Proactively seek information on government and NGO-sponsored programmes for input subsidies, extension services, and climate-smart agriculture training.

For Policymakers and COCOBOD

• Establish a Stabilisation Fund: A robust, transparent fund built during high-price periods can be used to smooth income during price collapses, protecting farmers from the worst of volatility.
• Accelerate Value Addition: Invest in local processing capacity. Ghana exports primarily raw beans. Capturing more of the chocolate-making value chain domestically would increase overall sector revenue and resilience.
• Transparent Pricing Formula: Publicly communicate the clear formula used to set the farmgate price (e.g., international price reference minus estimated costs, plus a stable margin). Transparency builds trust.
• Link Price to Quality & Sustainability: Develop premium payment systems that reward farmers for higher-quality yields and adoption of sustainable, climate-resilient farming practices.

For Investors and the Private Sector

• Direct Farmer Partnerships: Invest in outgrower schemes and direct sourcing models that provide farmers with guaranteed off-take at fair prices, bypassing some of the volatility of the bulk commodity market.
• Finance the Supply Chain: Provide affordable credit and insurance products tailored to cocoa farmers’ seasonal cash flow cycles.
• Support Certification: Back initiatives for sustainable cocoa (e.g., Rainforest Alliance, Fairtrade) which often command price premiums that can trickle down to farmers.

FAQ: Common Questions About Ghana’s Cocoa Price Policy

Why did Ghana lower the cocoa price if global prices were high earlier?

The global cocoa price is highly volatile. While prices spiked to record highs in late 2023/early 2024, they fell sharply by the time Ghana’s main crop harvest was in full swing in early 2024. COCOBOD’s price is set based on projected average international prices for the season. The cut reflects the lower, corrected market reality at the time of the decision, not the earlier peak.

How is the farmgate price in Ghana determined?

The price is announced annually by COCOBOD. It is influenced by several factors: the prevailing and projected international market price for cocoa, the Ghanaian cedi’s exchange rate against the US dollar (cocoa is traded in USD), operational costs of COCOBOD (including buying, hauling, and storing beans), and a targeted margin to ensure the board’s financial sustainability. The exact formula is often not fully transparent to the public.

What is the difference between the farmgate price and the international price?

The international price (e.g., ICE futures) is the wholesale price for cocoa beans on global commodity markets, typically per tonne in USD. The farmgate price is the price paid directly to the Ghanaian farmer per standard bag (64kg or 100kg) in Ghanaian cedis. The farmgate price is derived from the international price after deducting costs for freight, insurance, COCOBOD operations, taxes, and a margin.

Can Ghanaian farmers sell their cocoa to anyone they want?

No. Ghana operates a monopsony system for cocoa. By law, all cocoa produced in Ghana must be sold to COCOBOD or its licensed buying companies (LBCs). Farmers do not have the legal right to sell directly to private international buyers. This system is designed to give the government control over quality, revenue collection, and market influence but limits farmer autonomy.

What other tree crops are being promoted at the summit?

The Ghana Tree Crops Investment Summit, organised with the Ghana Tree Crops Authority (GTCA), focuses on diversifying beyond cocoa. Key target crops include cashew, rubber, coconut, and oil palm. The goal is to boost the production, processing, and export value of these crops to strengthen Ghana’s overall agricultural economy and resilience.

Conclusion: The Path to a Resilient, Farmer-First Cocoa Sector

President Mahama’s candid identification as a cocoa farmer has injected a crucial human dimension into a complex policy debate. It underscores a fundamental truth: the long-term viability of Ghana’s cocoa sector is inseparable from the economic well-being of its producers. The 2024 farmgate price cut, while economically rational in response to a falling global market, has exacerbated financial stress on an already vulnerable base. The summit’s focus on investment and diversification is a positive step, but the core challenge remains: building a pricing and support system that insulates farmers from the worst extremes of commodity price swings.

The roadmap forward requires a multi-pronged approach: implementing effective price stabilization mechanisms, radically increasing transparency in price setting, aggressively pursuing local value addition, and empowering farmers through stronger cooperatives and direct access to finance and markets. As Mahama stated, policy must be made with a clear-eyed understanding of its impact on families. For Ghana’s 800,000 cocoa farming families, and for the nation’s economy that depends on them, the success of these forthcoming reforms is not merely an economic issue—it is a matter of national equity and sustainability.

Sources and Further Reading

• Ghana Cocoa Board (COCOBOD). Official Press Releases and Annual Reports.
• International Cocoa Organization (ICCO). Quarterly Cocoa Market Reports and Statistics.
• Food and Agriculture Organization (FAO). FAOSTAT data on Ghana cocoa production and trade.
• Ghana Tree Crops Authority (GTCA). Summit documentation and national diversification strategies.
• International Monetary Fund (IMF). Reports on Ghana’s economic outlook and commodity dependence.
• Reuters, Bloomberg, and Ghanaian media outlets (e.g., Graphic Online, Citi Newsroom) for contemporaneous reporting on 2024 cocoa price movements.

Disclaimer: The views and opinions expressed in this analysis are for informational and explanatory purposes based on publicly available data and statements. They do not constitute financial or policy advice. Readers are encouraged to consult official sources from the Ghana Cocoa Board and relevant government ministries for authoritative information.