The Director of Presidential Initiatives in Agriculture and Agribusiness Peter Boamah Otokunor stated on Saturday that the government is currently paying cocoa farmers more than 90 percent of the Free on Board (FOB) price, describing the rate as unprecedented in Ghana’s history.
Speaking on TV3 on February 14, Otokunor maintained that no government in recent years has been as deliberate in improving farmers’ earnings as the current administration has been over the past year. He emphasized that the policy ensures farmers benefit directly from international market prices despite recent declines in global cocoa values.
The statement came two days after Finance Minister Cassiel Ato Forson announced the Producer Price Review Committee (PPRC) had set a new farmgate price of 41,392 cedis per tonne, representing 90 percent of the achieved gross FOB price of 4,200 dollars per tonne. The adjustment took effect on Wednesday, February 12, for the remainder of the 2025-26 crop season.
Otokunor stated that at the current FOB price of 3,700 dollars per tonne referenced in his interview, the amount being paid to cocoa farmers exceeds 90 percent of the export value. He described this as historic since the days of Tetteh Quarshie, who introduced cocoa farming to Ghana in the 1870s.
The director characterized the policy shift as a corrective measure aimed at aligning domestic cocoa prices with international market realities while ensuring farmers receive adequate rewards for their labor. He stated the government wanted to be true and fair to cocoa farmers by ensuring they receive the full benefit of what they are supposed to get.
The new producer price of 2,587 cedis per 64 kilogram bag and 41,392 cedis per tonne marks a reduction from 58,000 cedis per tonne announced in October 2025, though the percentage of FOB paid to farmers increased substantially from the statutory minimum of 70 percent.
World market cocoa prices dropped significantly from an average of 7,200 dollars per tonne when the 2025-26 season began in August 2025 to approximately 4,100 dollars per tonne by February 2026. The collapse in international prices made Ghana’s cocoa beans uncompetitive at previous farmgate rates and created severe liquidity challenges for Ghana Cocoa Board (COCOBOD).
Finance Minister Forson explained on Thursday that the PPRC met to assess challenges facing the sector and concluded that maintaining the October price level would leave Ghana’s cocoa overpriced relative to competing origins. He stated the government chose to pay 90 percent of achieved FOB rather than reverting to the 70 percent statutory minimum to cushion farmers against falling world market prices.
Cabinet approved broader reforms in the cocoa sector including introduction of a new Cocoa Board Bill guaranteeing farmers a minimum of 70 percent of gross FOB with automatic price adjustments reflecting world market movements. The proposed legislation will establish a framework linking producer prices more closely to international market conditions while protecting minimum farmer incomes.
The government announced it would replace the syndicated loan model that collapsed after 32 years and the failed buyer financed model of 2024 with a new domestic cocoa bond financing system for the 2026-27 season. The revolving fund aims to ensure liquidity throughout the crop year and enable timely purchases from farmers.
Otokunor also blamed COCOBOD’s current financial difficulties on persistent mismanagement and unnecessary procurements under the previous Akufo-Addo administration. He cited COCOBOD data showing the board recorded losses of 199 million cedis in 2021, 395 million cedis in 2022, 78 million cedis in 2023, and 426 million cedis in later years despite strong cocoa performance on international markets during much of that period.
The director stated that individuals placed in charge of COCOBOD over the past eight years led the institution into its current difficulties through constant mismanagement. Cabinet has directed the Attorney General to conduct forensic audits and criminal investigations into COCOBOD activities between 2017 and 2024.
COCOBOD awarded cocoa road contracts totaling 26.5 billion cedis between 2014 and 2024, with 21.5 billion cedis committed during just three crop years despite International Monetary Fund (IMF) program requirements to rationalize commitments from 21.7 billion to 6.9 billion cedis. The government announced it would transfer 4.35 billion cedis in road construction liabilities from COCOBOD to the Ministry of Roads and Highways.
The Licensed Cocoa Buyers Association of Ghana (LCOBA) endorsed the reduced producer price as necessary alignment with global market realities. General Secretary Vitus Dzah stated in an interview with Ghana News Agency that long term sector survival depends on collective resolve among government, regulators, buyers and farmers to embrace adjustments responding to market dynamics.
Some cocoa farmers expressed willingness to accept lower prices for future deliveries provided government first cleared outstanding arrears for beans already delivered at previously announced rates. Many farmers endured months without payment as unsold stocks accumulated at collection centers during the period when Ghana’s farmgate prices exceeded international market levels.
The 2025-26 cocoa season began in August 2025 with a producer price of 51,660 cedis per tonne, calculated at 70 percent of a gross FOB price of 7,200 dollars per tonne using an exchange rate of 10.25 cedis to the dollar. Cote d’Ivoire announced a new producer price 20 percent above Ghana’s rate on October 1, 2025, prompting Ghana to raise its farmgate price to 58,000 cedis per tonne on October 2.
The significant difference between Ghana and Ivorian producer prices, coupled with exchange rate movements, encouraged widespread smuggling of beans across borders where farmers received faster payments. The government stated that from the 2026-27 season, a minimum of 50 percent of all cocoa beans must be processed locally, with all remaining 2025-26 season beans allocated for domestic processing.
Ghana historically processes between 30 and 40 percent of cocoa beans locally, with most exports consisting of raw beans that capture only a small fraction of the commodity’s final value in international chocolate and confectionery markets. The government plans to revive state owned Cocoa Processing Company (CPC) and Produce Buying Company (PBC) to lead local processing and purchasing initiatives.
