Ghana raised the prices it pays farmers for their cocoa by more than 25 percent on Wednesday in a bid to stop a surge in smuggling and prevent growers from seeking higher profits in neighbouring states.
Deputy Finance Minister George Gyan-Baffour said the decision was taken after reports that massive amounts of cocoa were being taken illegally out of the country as farmers sought to take advantage of high prices on international markets.
"We have had an impressive performance so far in this season but the upsurge of smuggling activities across the western and eastern borders is worrying," he said. "We need to remain alert and be responsive to situations." Ghanaian farmers will now receive 1,200 cedis ($1,230) per tonne of cocoa, up from 950 cedis. The new price takes retrospective effect from February 21.
It was the first time Cocobod announced a new farmgate price in the middle of an active cocoa season in the world's number two grower. One senior official at Cocobod said the decision had been taken because buyers in Ivory Coast were offering 20 percent more for a tonne of cocoa than the amount farmers could receive in Ghana, and that smuggling had taken on worrying proportions.
He said his office had received several calls from customs and border security officers on one day two weeks ago with reports of massive amounts of illegal cocoa shipments.
"It was very alarming. A lot of our farmers, in many instances in collusion with licensed buyers, were carting the beans across the borders for profit," the official said. "In fact, in my whole life in Cocobod I've never experienced such an alarming situation," he said, but declined to give any figures on the amount of cocoa believed to have been smuggled.
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