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0 Ghana’s cocoa sector is in the news once again because COCOBOD is unable to pay some farmers for their produce.
Aside from all the interventions as outlined by the finance minister, Dr Casiel Ato Forson, in response to the looming crises in Ghana’s cocoa sector yesterday, the announcement of a reduction in farm gate prices for cocoa farmers is expectedly dominating the discussions and has sparked a lot of debate in communities and the media space.
While the potentials for key proposals such as increasing local processing and financial re-modelling cannot be overlooked, I cannot equally keep silent over the price reduction and what it means for Ghana’s strides for achieving environmental sustainability.
Indeed, the reduction in cocoa prices to the farmers poses a potentially significant implication to the cocoa farmer, the agricultural and mining sectors, and, more importantly, environmental sustainability.
There are several factors that may support the government’s decision to reduce the prices paid to cocoa farmers.
Firstly, global cocoa prices have experienced a decline, while Ghana’s cocoa looks expensive compared to other producers. The government is therefore compelled to adjust local prices to remain competitive and avoid accumulating unsold stock.
Secondly, the lower prices may be necessary to ensure the sustainability of the cocoa sector by aligning domestic rates with international benchmarks, thereby maintaining export volumes and protecting jobs within the industry.
Additionally, by responding to market forces, the government helps stabilise the economy and prevent potential financial losses that could arise from subsidising higher prices. In all of these, the most impactful outcome is simply a reduction in earnings to the farmers.
While I do not wish to wade into the politics of the policy, it is important that I look into the framework of transparency to appreciate the intention of the government. Indeed, the government’s posture and rationale for lowering cocoa prices appear to be reasonable and well-founded.
However, past political promises and commentaries by the current government dilute its intention and give reasons for opposition to critique.
However, the more concerning issue to me is the timing of the price reduction and its potential consequences for environmental sustainability.
To start with, the lower prices mean that the serious, ambitious, and production-oriented coca farmer will become more aggressive and intensify farming activities to produce more in order to maintain the existing flow of income and living standard.
This will imply the uncontrolled use of chemicals, additional land take for farming, conversion of forest and protected areas into farmlands, and extensive bush burning activities. While these consequences may seem negligible, they cannot be written off in the lens of environmental protection.
The bigger challenge, however, lies in the dynamics of the mining sector. It is not contestable that one of the key factors driving illegal and unsustainable mining activities in Ghana is the limited appeal of alternative livelihoods for those involved in mining.
Many perceive these alternatives as financially unrewarding, a reason that also makes it difficult for the government to persuade illegal miners to transition to other forms of employment.
Notably, cocoa farming is often considered one of the most lucrative and high-earning ventures available to farmers in Ghana. Coincidentally and interestingly, most mining communities in Ghana are also agricultural and cocoa-producing areas.
There is, therefore, intense competition for land between farming and mining activities. Currently and in the recent past, the land-use competition between mining and farming tends to favour the former.
Agricultural land is increasingly being converted into mining areas at a faster rate compared to the vice versa. In fact, the few mining areas that are reclaimed do not match anywhere close to the farmland-to-mining conversion, either in terms of scale or speed.
It is established that some farmers voluntarily sell their fertile lands to miners, or they are compelled to release their lands to the miners through undue financial influence. Such actions are often motivated by immediate financial desires, as landowners find it more profitable to sell to miners rather than to fellow farmers. Even in instances where the miners forcibly take over land, farmers are unable to challenge.
The miners have been the winners in the battle over the lands, a reason why environmental sustainability continues to be a dream. These issues present ongoing challenges for the government, cocoa farmers, and local communities and have persisted for years, if not decades.
Paradoxically, as cocoa prices decline and farmers struggle to maintain their earnings, the gold sector is on its momentum.
The international gold market is experiencing significant growth, which has brought considerable attention and relevance to initiatives such as the newly established GOLDBod, reflecting Ghana’s evolving economic landscape.
So far, in this current government, the production and management of gold has been touted as the pillar of Ghana’s economic stability, resilience, and gains. It forms a foundational explanation for the stability of the local currency, inflation, and other macroeconomic indicators.
Mining, in all its forms, has thus become increasingly attractive. Meanwhile, small-scale and illegal mining remains a persistent and damaging problem, primarily due to its severe environmental impacts.
The government continues to face difficulties in dissuading local communities and young people from engaging in illegal mining and related activities. Given these circumstances, there exists a deep concern that the reduction in cocoa prices could undermine efforts to combat illegal mining and promote environmental sustainability.
This is a crucial time that I believe the government ought to create a strong synergy between the gold and cocoa sectors. I therefore urge the government to review the proposed intervention carefully within the broader context of mining, agriculture-based economic activities, and environmental sustainability. Interventions and activities of both the COCOBOD and GOLDBOD must therefore be strategically coordinated in order not to slip into a downward trend and destroy the little gains the country is making in sustainable mining and environmental sustainability.
We must be careful not to increase the base and the risk of intense illegal mining. Interventions such as subsidies and special packages must be put in place to encourage farmers and sustain their interest in the sector until prices become lucrative enough to sustain the farmer.
Extensive sensitisation, targeted at the cocoa farmers, must be undertaken. This will help the farmers have a deeper appreciation of the issues and the proposed interventions for cocoa production, livelihood enhancement, and the growth of the cocoa sector in general.
