More Trouble For Economy As Cocoa Proceeds Slump

Government revenues from cocoa have fallen drastically to GH¢40 million in the 2012/2013 crop season from the region of GH¢153.9 million in the 2009/2010 season, primarily due to declining prices of the crop on the international market and low productivity. Cocoa receipts accruing to the government mainly come from duties on cocoa exports. In spite of this decline, the government had to sacrifice 62 per cent of its revenue from cocoa exports to maintain the producer price of cocoa, as farmers were not ready to peg their prices to the behaviour of the world market price. This was because although prices dropped from US$3,392.97 in March 2011 to US$2,359.25 in March to 2012, the government had to pay farmers based on the former price. Consequently, COCOBOD also recorded a loss of GH¢14.94 billion in the 2011/12 season, compared to a profit of GH¢9.82 million in 2010/11. These were contained in a Policy Brief prepared by the Agriculture and Agribusiness Unit of the newly established Real Sector Division at the Ministry of Finance, a copy of which was made available to the GRAPHIC BUSINESS.