COCOBOD MEET-THE-PRESS

Date: 15th October 2024

INTRODUCTION
The narrative of Ghana Cocoa Board (COCOBOD) since January 2017, is a journey of numerous initiatives, incredible innovations and landmark achievements in the face of stormy and a very sticky situation that was being fueled by externalities.

We inherited an aggravated form of cocoa swollen shoot virus disease situation in the country, putting the productivity of farms, the future and sustainability of the industry in jeopardy. Close to 20 per cent of the productive cocoa area in Ghana had been affected, and about the same proportion had become moribund or over-aged and dying. Western North which used to produce one-third of the total national output had lost over 200,000 hectares of cocoa farms to the virus disease out of its 310,000 hectares.

Productivity was very low, 450 kg/ha on the average; world market price had plummeted from around $3,000 per tonne to $2,000 per tonne; cocoa farmers had lost interest and swathes of cocoa farms were being converted to cashew in the Brong Ahafo and to rubber in the Eastern Region, whilst illegal mining was about to explode. A very stormy and sticky situation, indeed!

Under the able leadership of The President, Nana Addo Dankwa Akufo-Addo, ably supported by The Vice President, Dr. Mahamudu Bawumia, the inspirational and progressive government of the New Patriotic Party (NPP), and the forward-looking, current crop of COCOBOD Board, management and staff, who are well-accoutred with innovations and determination, have reversed the situation and turned the industry around from retrogression to transformation.

ACHIEVEMENTS
The list of NPP achievements in the cocoa sector is tall, but suffice it to touch on three key thematic areas, namely:
1. Productivity Enhancement Programmes (PEPs)
2. Innovation / Digitalization
3. Farmer Income Support

1.0 PRODUCTIVITY ENHANCEMENT PROGRAMMES (PEPs)
The Productivity Enhancement Programmes (PEPs) were designed to boost cocoa yields per hectare and improve farmer livelihoods through a series of targeted interventions. These include the cocoa rehabilitation programme, mass cocoa pruning, hand pollination, premium on poultry manure to improve biomass and soil health, and the distribution of high-yielding, disease-resistant seedlings, among others. By improving farm productivity, these initiatives aim to increase cocoa output, enhance sustainability, and ensure long-term economic benefits for smallholder farmers and the country’s cocoa sector.

Today, we have a farmer in Ghana who is producing 6.7 tonnes per hectare, what once used to be like a dream. The industry has become attractive. Farmers who converted their cocoa farms to cashew in the Brong Ahafo and Ashanti Regions before this administration are now turning the farms back to cocoa.

1.1 Cocoa Farms Rehabilitation
A study in 2017 disclosed that the cocoa swollen shoot virus disease (CSSVD) had taken a heavy toll on the cocoa sector with the epicentre being the Western North and spreading fast in the Western South and Eastern regions. The study estimated that 17% of the total national cocoa tree stock at the time had been affected, and 67% of the cocoa farm area in the Western North region, which used to account for 30% of the annual production of the country, had been hit by the CSSVD.

There is no known chemical remedy for CSSVD even after 86 years of scientific research in Ghana. The only answer to the problem is to cut the diseased trees, annihilate them and replant the farm. This calls on affected farmers to restart afresh years of their life-investments, utterly throwing them into great despair, especially without any external support forthcoming.

The CSSVD aside, 23% of the total national area planted to cocoa at the time was found to be over-aged or in moribund condition, registering very insignificant production.

It was clear then that the future of the industry and sustainable production of cocoa in Ghana was a mirage.

COCOBOD with the support of the Government took a bold initiative and with an African Development Bank (AfDB) funding amount of $290 million has embarked on one of the most prolific socio-economic intervention programmes for our cocoa farmers.

Implementation
The initiative is a compensation-based approach, providing a Ghc1000 per hectare stipend each to farmers and the same to landlords with tenanted farmland, to help them cope with loss in their sources of income during the replanting phase of the project.

Apart from the compensation, the entire cost of rehabilitation is borne by COCOBOD and involves the following activities.
o Cutting out of diseased and unproductive farms using chainsaw machines, applying aboricides (annihilation) and replanting with hybrid cocoa seedlings.
o Planting of plantain suckers and shade trees.
o Applying fertilizers/manure to enhance the growth and maturity of the cocoa trees.
o Controlling pests and other parasitic plants such as mistletoes.
o Maintaining the farms for a minimum of two years at no cost to the farmer

Achievements
The implementation of this transformative project for the cocoa industry has led to the successful treatment of diseased and moribund farms, revitalizing productivity and improving farmer livelihoods. 

Project milestones:
i. 74,813 farms, spanning 67,385.43 hectares, owned by 56,105 farmers have been rehabilitated, and are in various stages of growth.
ii. 44,480 farms, spanning 40,150.40 hectares owned by 28,510 farmers are yielding as of August 2024 and will soon be handed over to the farm owners.
iii. Distribution of millions of cocoa seedlings to farmers nationwide to support new establishments/farms. COCOBOD funded the transportation of the seedlings to locations closer to communities and worked with farmer cooperatives to further distribute them to farmers.

The programme will significantly increase productivity and improve the livelihoods of tens of thousands of beneficiary farmers.

1.2 Pruning Exercise
Pruning involves the strategic trimming of cocoa trees to improve airflow, sunlight exposure, and tree health, which in turn boosts flower development and pod formation, whilst at the same time lessening the spread of pests and diseases. Even though many farmers were aware about pruning, less that 5 per cent actually put the exercise into real practice.

In 2018, a nationwide education, training and roll-out of pruning took place as a critical component of efforts to enhance the productivity and sustainability of the cocoa farms unaffected by the CSSVD.

Achievements
i. Improved Yields: The exercise, together with the other interventions, has led to increased cocoa productivity from 450 kg/ha in 2016 to the current 800 kg/ha, allowing farmers to achieve higher yields per hectare.
ii. Enhanced Biomass: Plant litter from the cuttings constitutes important supply of biomass for the soil and replenishing the loss.
iii. Healthier Trees: Regular pruning helps in managing pests and diseases, extending the lifespan of cocoa trees.
iv. Farmer Support: Through training and technical assistance, farmers have been equipped with best practices, leading to long-term benefits for farm management and income.
v. Sustainability: The programme has supported efforts toward sustainable cocoa farming by enhancing tree vitality and reducing the environmental impacts of cocoa production.

1.3 Hand Pollination Exercise
Whereas the cocoa tree can produce over 1,000 flowers a year, studies in Ghana have shown that less than 5% succeed in developing into fruit; the rest drop or abort because of the absence of enough natural insect pollinators.

In 2018, COCOBOD introduced hand pollination as a corrective measure and deployed 10,000  trained youth to the field to teach the farmers the technique. The intervention continued in 2019 and 2020 with 30,000 farm crews spread across the cocoa landscape to bring the farmers on board. Today, hand pollination has become a flagship programme.

A number of our farmers are competing in the range of 4,000 kg/ha and 6,000 kg/ha. Something that looked unattainable in Ghana is now happening live on cocoa farms.

Achievements
i. Farmers who used to see 10 to 50 pods per tree before 2017, are today recording 50-150 pods per tree in a season.
ii. The initiative has created jobs for thousands of young energetic persons, who have been trained to work on the project.

Visuals (still and video) showing rehabilitated farms, pollination, pruning; and testimonials from farmers who have benefited from these interventions will highlight the scope of their impact.

2.0 INNOVATION AND DIGITALIZATION
Under the current administration, COCOBOD has introduced an number of innovative programmes and major policy shift including the new ways of financing cocoa purchases and relative operational activities, putting in place a comprehensive integrated farmer data base and aligning with the European Union Deforestation-free Regulation and other international protocols on sustainable cocoa.

2.1 The New Financing Model
Since post-independence, COCOBOD has always borrowed to finance cocoa purchases and its operations. Before 1992, it was domestic borrowing through raising of Cocoa Bills by the Bank of Ghana on behalf of COCOBOD. The Produce Buying Company (PBC), a subsidiary of COCOBOD, was the sole purchasing agency in the country and a beneficiary of the cocoa bills.

In 1992, when the administration of COCOBOD under the then NDC Government realized that the coupon rates of the Cocoa Bills had become expensive as against better options offshore, they decided to go to Europe, giving birth to the annual syndication of loan.

COCOBOD has been in offshore syndication borrowing for 32 years and decided this year to stay away from the annual syndication. The decision was influenced largely by the very reason that took COCOBOD to overseas borrowing, that is, cost of borrowing, which has consistently been increasing and gone above 8% in recent times.

The financing arrangement being pursued now is a home-grown model, and so far, so good.

What is intriguing about this model is that because it is a zero-borrowing, COCOBOD is unburdened with any interests and ancillary costs.

Because the current contracts are unencumbered, the buyers will be paying directly to CMC account (on behalf of COCOBOD) instead of the previous syndication regime, where the payment would have been directed into an overseas collection account in the name of the syndication banks. This will speed up the flow of cocoa receipts into the country.

Again, even though the traditional offshore syndication brought in FX at a time in a lump sum, it was “BULK-AND-BURST”. The annual syndication money, well anticipated before its arrival, never lasted for a month, and before long, the cedi that would have stabilized briefly was back to depreciation.

In the new financing model, the FX will not be a lump sum but flow in steadily and consistently, thus potentially going to help the cedi stabilize.

2.2 Cocoa Management System (CMS)
The COCOBOD that this current administration inherited was without any real-time data base. Everything was based on guess-estimate.

In 2019, COCOBOD developed an integrated cocoa farmer and farm database called the Cocoa Management System (CMS) to enhance effective policymaking, and traceability, and ensure effective delivery of various tailor-made interventions in the cocoa sector. 

One of the first steps taken was to register cocoa farmers into a centralized database. This process involved the use of the GPS for farm mapping with polygons (collecting detailed information on each farmer, including their location, farm size) and production methods. The aim is to ensure that every cocoa bean can be traced to its source. This level of data collection has significantly improved our oversight and accountability within the supply chain.

Achievements
I. The successful registration of 792,954 cocoa farmers and their entire households and other dependants into the CMS farmer database.
II. Mapping of 1,239.169 hectares of cocoa farms, enabling better resource allocation and improved production tracking.
III. The system is being enhanced to facilitate payment processes, reduce delays, and ensure accurate, direct payments to farmers.

2.3 Ghana Cocoa Traceability System (GCTS)
A critical extension of the CMS is the Ghana Cocoa Traceability System (GCTS). The GCTS was born out of a necessity to meet the growing demands for transparency, quality assurance, and sustainability in the global cocoa industry. Consumers around the world are increasingly concerned about the source of their food, how it is produced, and whether it aligns with ethical and environmental standards. For COCOBOD, traceability is not just a regulatory requirement but it is a strategic imperative that enhances the value of Ghanaian cocoa in the global market.

As of 21st August, 2024, the Regional Manager of the Takoradi Takeover Centre, Mr. Emmanuel Kwabena Yamoah reported that approximately 77.25tons of cocoa, equivalent to about 1,236 bags had been shipped under the GCTS

Achievements
i. Traceability software has been developed and populated with data.
ii. The Ghana Cocoa Traceability System (GCTS) has established 100% first-mile traceability. All cocoa produced in Ghana should be traceable from the port of shipment to the plot of land.
iii. In collaboration with the Forestry Commission and the European Forest Institute, a methodology for the Deforestation Risk Assessment module (DRM) has been developed.
iv. In collaboration with the International Cocoa Initiative, the tools and instruments for the child labour risk assessment module has been developed.
v. The pilot roll out of GCTS is ongoing in Assin Fosu and New Edubiase.
vi. Training of the actors (farmers and LBCs) of the traceability system is on-going.

Benefits
The introduction of the Ghana Cocoa Traceability System has yielded significant benefits across multiple dimensions:

1. Quality Assurance
Traceability has become a cornerstone of our quality assurance efforts. By tracking cocoa beans at every stage of the supply chain, we can quickly identify and address any quality issues, ensuring that only the finest cocoa reaches our international markets. This has reinforced Ghana’s reputation as a producer of premium-quality cocoa.

2. Sustainability and Ethical Sourcing 
Our traceability system plays a critical role in promoting sustainable farming practices. By providing transparency into the origins of our cocoa, we can monitor and enforce standards that prevent deforestation, encourage biodiversity, and ensure fair labour practices. This alignment with international sustainability standards has made Ghanaian cocoa more attractive to ethically conscious buyers.

3. Economic Empowerment and Market Access 
For cocoa farmers, traceability translates into better market access and higher prices. By meeting the stringent requirements of international buyers, including the European Union Deforestation Regulation (EUDR), our farmers can secure premium pricing for their produce. This, in turn, leads to greater income stability and improved livelihoods for thousands of farming families across Ghana.

4. Consumer Confidence 
In today’s market, consumer confidence is paramount. Our traceability system provides the transparency that modern consumers demand, reinforcing their trust in Ghanaian cocoa. This trust is critical to maintaining and expanding our market share in an increasingly competitive global market.

2.4 Sustainability and Climate-Smart Cocoa Production Initiatives
COCOBOD, in collaboration with key stakeholders, has made significant strides in promoting sustainable cocoa farming practices to preserve the environment and ensure long-term productivity through the following initiatives:
i. The Cocoa Forest REDD+ Programme, focuses on reforestation and reducing carbon emissions in cocoa-growing areas.
ii. Agroforestry systems that integrate tree planting with cocoa farming to enhance biodiversity and soil health.
iii. Training and sensitization of all cocoa farmers in the seven cocoa regions on climate-smart agricultural practices, helping them adapt to climate change and improve yields.

These sustainability initiatives promote credibility, improve the environment and also position Ghana’s cocoa sector as a global leader in responsible and ethical cocoa production.

Visuals of agroforestry systems and testimonials from farmers will underscore the success of these efforts.

3.0 FARMER INCOME
3.1 Living Income Differential (LID)
One of the most impactful policies implemented since 2017 is the Living Income Differential (LID) pricing mechanism. Ghana and Cote d’Ivoire reached a strategic price mechanism agreement with global industry players (brands and buyers) in July 2019 and gained the support of consumers.

As a measure of equity, the LID  was to ensure a remunerative income for farmers universally in the two leading cocoa-producing countries to provide solution to sustainable cocoa, which had become elusive in the preceding two decades.    

The LID of extra UD$400 per tonne is paid to producers of the two countries and came into effective in October 2020. Since its implementation, it has earned Ghana and Cote d'Ivoire an incredible average of $1.2 billion per annum outside the FOB, a realization which, ordinarily, would have been absolutely impossible.

3.2 Payment of Remunerative Producer Prices
Since 2017, the Ghana Cocoa Board (COCOBOD) has increased the producer price for Ghanaian cocoa farmers, demonstrating government’s commitment to improving farmer livelihoods and ensuring fair compensation. Each year, COCOBOD reviews the price based on global market trends and input costs, to offer competitive rates that reflect the value of cocoa on the international markets while supporting farmers with interventions such as the free cocoa rehabilitation, mass spraying, subsidized fertilizer, pruning, etc. 

Notable milestones include:
1. 2017/18 and 2018/19 crop season: Producer price of GHS7,600 per tonne remained unchanged. During these periods, the global market had suffered meltdown with plummeted cocoa prices, forcing worldwide producers including the West African cocoa-producing countries to reduce their prices. Ghana resolved to maintain the prevailing prices to cushion the farmers.

2. 2019/20 crop season: The producer price was increased by 8.4% to GHS8,240 per tonne. 

3. 2020/2021 Season: In response to market conditions and the introduction of the Living Income Differential (LID), the price was increased by GHS2,320 per tonne (28.2%) to GHS 10,560 per tonne. The same price prevailed in 2021/22.

4. 2022/23 crop season: The producer price was increased to GHS12,800 per tonne (21.2% increase).

5. 2023/2024 Season: COCOBOD announced a historic 63.5% price increase, raising the producer price to GHS 20,928 per tonne, ensuring that farmers benefit from better market prices amidst rising production costs.

6. For the 2024/2025 crop season, the government has increased the producer price to GHS48,000 per tonne, equivalent to $3,048 per tonne. This price a record producer price at the back of a bullish market and driven by a desire to offer farmers a fairer share of the global market value for cocoa. The increase is part of Ghana's strategy to enhance farmer income, combat poverty, and prevent cocoa smuggling to neighbouring countries.

3.3 Cocoa Farmers Pension Scheme (CFPS)
The Cocoa Farmers Pension Scheme is a landmark initiative to provide financial security and social protection for cocoa farmers in Ghana, many of whom have worked for decades without a formal retirement plan. The COCOBOD Law, PNDC Law 81 enacted in 1984 required the Board to roll out the scheme in 1985. 

The Government of Ghana, in collaboration with the COCOBOD, launched the scheme in 2020. The scheme has since progressed through various phases, enrolling all cocoa farmers for a full-scale implementation of deduction of farmer’s contribution to the scheme. 

This initiative recognizes the invaluable contributions of cocoa farmers to the national economy and seeks to improve their quality of life when they retire from active cocoa farming.

A pilot exercise in three cocoa districts selected from Ashanti and Central Regions in October 2024 recorded significant success and challenges, which are being resolved. 

Through massive sensitization and education, the implementation team hopes to gradually scale up the exercise in other districts to ensure that cocoa farmers enjoy decent pension. 

Benefits
● Financial Security for Farmers: The scheme will ensure that cocoa farmers receive monthly pensions, offering them financial independence and reducing poverty among the elderly in cocoa-growing communities.

● Comprehensive Farmer Registration: The scheme will ensure that no registered cocoa farmer in Ghana is denied their inherent rights and opportunities provided under this novel initiative. 

● Sustainability: The pension scheme is a step towards making cocoa farming more attractive to younger generations, providing long-term benefits that will encourage succession and sustainability in the sector.

● Improved Farmer Welfare: The scheme will promote the overall well-being of cocoa farmers, offering a safety net that complements existing support systems such as the Living Income Differential (LID) and productivity enhancement initiatives.

The Cocoa Farmers Pension Scheme is a vital component of Ghana's effort to reward the hard work of its cocoa farmers and ensure the continued growth and sustainability of the cocoa industry.

Charts and visuals demonstrating the financial benefits of the LID and the annual producer price increments will highlight COCOBOD’s role in improving the incomes of cocoa farmers and enhancing their standard of living.

Conclusion 
The cocoa industry under the current administration and NPP Government has undergone an incredible transformation, driven by forward-looking initiatives and innovations and the digitalization wave. The image of the industry today is different from that of yesteryear. For many cocoa farmers and their families who lost almost everything and were in despair, COCOBOD and this Government have given then hope and a brightening tomorrow. Everything is Nana Akufo-Addo’s legacy for Mother Ghana, and I say so with a sense of pride.

LIST OF ACHIEVEMENTS IN THE COCOA SECTOR UNDER NPP SINCE 2017
i. The record production of 1,045,000 tonnes in the 2020/2021 crop year.

ii. From an average of 450 kg/ha, productivity has improved to 800 kg/ha.

iii. Paradigm shift in the financing of the annual crop, from offshore to onshore borrowing, and for 2024/2025, in particular, zero-borrowing.

iv. Productivity Enhancement Programmes (PEPs) – i.e. agronomic practices that emphasize on vertical productivity as against lateral productivity. It invokes the same or greater yield but on a relatively smaller area.

v. Rehabilitation or cutting and replanting of CSSVD and moribund farms free of charge for affected farmers.

vi. Nationwide mass pruning of cocoa farms to boost flowering and fruiting.

vii. Nationwide hand pollination, which has more than tripled the yields of beneficiary farmers.

viii. Hi-Tech, which was introduced under President Kufuor NPP administration did not see any serious intervention until recently. It has received a new impetus by way of the fertilizers being delivered at the doorsteps of the farmers (villages and towns) instead of at the district capitals.

ix. Placing premium on the use of poultry manure.

x. CODAPEC programme, which was also introduced under President Kufuor NPP Administration had remained the same until 2018. An added dimension, allows mass spraying to start early from February/March (Spring spraying) to knock off the anomis (insects at caterpillar stage) instead of the traditional waiting until August, when the anomis would have matured, mated, already laid their eggs and easy for the matured insects at the farm periphery to escape.

xi. Nationwide distribution of dual-purpose slashing cum pruning machines to cocoa farmers, to replace the use of the machete and make farming less laborious and less energy-sapping. It is also to replace the use of weedicides, whose effects are detrimental to humans, the environment and sustainable cocoa farming.

xii. Pilot irrigation on cocoa farms to test the move from seasonal farming to all year farming, thereby, putting more money in the pockets of farmers who undertake irrigation.

xiii. Tripling the number of extension officers by employing and training more youth (1,300). From an inherited extension officer to farmer ratio of 1:2,900, it has improved to 1:600, which is not too far from the FAO recommended standard of 1:500. The situation has improved the visibility and effectiveness of extension to cocoa farmers.

xiv. The minimum 15 years, and up to 35-40 years, gestation period of shea tree has been shortened by the Cocoa Research Institute of Ghana (CRIG-COCOBOD) to 3 years for clonal materials and 5 years for hybrid seedlings. With this feat, the shea industry is going to phase into commercial farming, stimulate the local economy and help improve the incomes of many in the north.

xv. Nursery facilities at Bole are generating over 100,000 productive shea plants annually for distribution to farmers.

xvi. CRIG has processed shea butter into bio-diesel, which has been found to be more efficient and less smoking than fossil fuel.

xvii. Ghana-Cote d’Ivoire Initiative on Cocoa (CIGCI), which has the status of a Regional Organization is a commodity force purposed for seeing a better price for farmers in the two countries. The CIGCI has its Head Office in Accra.

xviii. The Living Income Differential (LID) is a major outcome of the CIGCI, which earns an extra $400 per tonne above the terminal market price exclusively for cocoa farmers in Ghana and Cote d’Ivoire. Basically, the LID is the brainchild of COCOBOD.

xix. Re-opened West African Mills Company (WAMCO) Limited, a public-private processing factory at Takoradi, after 3 years close shutdown in 2013. Currently, WAMCO is a profitable local cocoa processing factory.

xx. Local processing sector, including Ghanaian-owned processing factories, have retooled and revamped resulting in an increase in local processing and value addition from 23% to 45%.

xxi. Since 2018, Cocoa Marketing Company (CMC) Ghana Limited has adopted direct shipment of cocoa from Kaase in Kumasi. Instead of bagged cocoa being transported from Kaase to Gyetabu (Tema) takeover centre or Kejeibiri (Takoradi) takeover centre before containerization for shipment, the cocoa now leaves Kaase already containerized and bound for shipment.

xxii. Digitalization of the cocoa sector has manifested in the Cocoa Management System (CMS) which is a comprehensive farmer database encompassing the household biodata at the time of the enumeration and connected to his/her farm geospatial data – i.e. shapefiles and polygon maps.

xxiii. The Cocoa Farmers Pension Scheme, which has remained only in the statute books since 1985, was officially launched by The President in 2020. With the CMS now providing a farmer database, COCOBOD has moved into the implementation stage of the Scheme.

xxiv. The CMS has also provided the framework for the Ghana National Cocoa Traceability System (NCTS) to be established and to meet the European Union Deforestation-free Regulation (EUDR).