Dr. Cassiel Ato Forson, the Minister of Finance, has unveiled a comprehensive package of reforms aimed at addressing what he called “gross mismanagement” in the cocoa industry over the past eight years. The Finance Minister said that these steps are intended to ensure fair pricing for farmers, restore financial stability, and safeguard the industry’s long-term viability.
“A careful examination of the cocoa industry over the last eight years has shown severe mismanagement, which needs immediate and complete reforms to tackle the sector’s issues,” Dr Forson stated.Speaking to the media at the Finance Ministry on Thursday, February 12, Dr. Forson said that the Cabinet had authorised significant reforms to reposition the industry and safeguard cocoa producers.
Among the changes are:
1. Paying overdue cocoa farmers right away: The Ghana Cocoa Board (COCOBOD) has been ordered by the cabinet to start making immediate restitution to all cocoa farmers who have been impacted by late payments.
2. Automatic price adjustment mechanism: The Parliament will consider a new COCOBOD Bill that would automatically adjust producer prices in accordance with fluctuations in global market prices, currency rates, and other important economic indicators.
3. Farmers are guaranteed a minimum of 70% of the gross FOB price: According to the suggested legislation, cocoa farmers will be paid at least 70% of the gross Free-On-Board (FOB) price.
4. Implementation of a novel funding approach (valid from the 2026/2027 harvest season): The syndicated loan model will be replaced by the existing financing system, which is now dependent on the buyer. To guarantee sustainability, the government will implement a new funding system.
5. Issuance of bonds for cocoa produced domestically: The new paradigm calls for the sale of domestic cocoa bonds to raise money for cocoa purchases. The revenue will be repaid during each crop year, establishing a revolving fund for COCOBOD activities.
6. Re-establishing local licensed buying corporations (LBCs): Many indigenous LBCs were forced out of business under the current system, but the new funding model is anticipated to revive them.
7. The Produce Buying Company (PBC) is revived. To become the top licensed purchasing firm in the industry and resume complete operations, the state-owned PBC will be brought back to life immediately.
8. Immediate distribution of the remaining crop beans from 2025/2026 for processing in the country: The remaining cocoa beans for the current crop year have been ordered by the Cabinet to be used for domestic processing.
9. Beginning in the 2026/2027 harvest season, at least half of the processing must be done locally. From the next crop year on, at least 50% of Ghana’s cocoa beans will be processed in the nation. The new COCOBOD Bill will include this clause.
10. The Cocoa Processing Company’s (CPC) Revival: As a top priority, the state-owned CPC will be brought back to life in order to become the primary processor of Ghana’s cocoa beans.
The previous syndicated loan model, according to Dr Forson, compelled COCOBOD to sell large quantities of raw beans in advance as collateral, which restricted Ghana’s capacity to maximise global prices and increase its domestic processing capability. He also stated that he and the Minister for Trade, Agribusiness, and Industry have met with local cocoa processors, who have expressed their capacity to handle over 50% of Ghana’s cocoa production. He said that a deal had been made on the immediate implementation of this policy.
With the government portraying the reforms as a decisive intervention to safeguard farmers’ income, encourage value addition, and re-establish financial discipline in COCOBOD, they are one of the most comprehensive structural changes to Ghana’s cocoa industry in decades.
Source: myjoyonline.com
