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Cocoa: Ghana's double game.

Ghana, Nigeria, Cote d'Ivoire and Cameroon signed an accord last year to burn 250,000 tons of their next season cocoa crop in a bid to force up the falling world market price. Yet, Ghana has recently launched a programme to increase cocoa production. What message is Ghana sending out?

Despite the low price of cocoa on the international market, Ghana has launched a 20-billion-cedi programme to increase cocoa production by next year in the face of calls to the government to diversify exports.

Under the programme, codenamed "Hi-Tech Maintenance Scheme", soft loans will be given to a select group of cocoa farmers whose farms fall within the 100,000 acres of farmlands identified for the programme. They will use the money to rehabilitate and maintain their farms and apply the latest farming technologies. To ensure the success of the programme, Ghana's Cocoa Research Institute and the Ministry of Food and Agriculture will keenly supervise and monitor the farmers. A private cocoa buying company, CASHPRO, has been roped in to offer the required support in terms of crop purchases.

Top officials of Ghana's agriculture ministry are very positive about the scheme because they say a similar project embarked upon by the country over two decades ago, resulted in an all time record yield of 500,000 metric tons.

Available statistics indicate that cocoa farmers produce on average, 250 kilograms per acre in one season, far below the government's expected target.

While beneficiary farmers have hailed the new programme, political analysts are questioning the sincerity of the government to the Abidjan Accord signed last year in which four of the world's leading producers of cocoa, including Ghana, agreed to reduce their production (by burning 250,000 tons of cocoa beans next crop season) in a bid to force up the world market price.

Ghana, Cote d'Ivoire, Nigeria and Cameroon, the parties to the Accord, are supposed to be working out how best to destroy the 250,000 tons of cocoa. Together, the four account for about 69% of the world cocoa production.

A ton of cocoa which sold for $1,794 last year has slumped to about $800 this year, alarming producer-nations whose economies are heavily dependent on cocoa returns. Ghana alone has lost nearly $400m in cocoa revenue over the past two years as a result of the price collapse.

For most critics of the Ghanaian government, finding solutions to an upward adjustment of the world market price should be the government's main pre-occupation rather than working to increase yield. They see a betrayal of the efforts by the leading producers to put up OPEC-style front to stem the continued fall of the world market price.

The Ghanaian government's "double edged" move, coming barely two weeks after the consultative meeting of the leading cocoa producers in Accra, has sent puzzling signals about the country's position with regards to the Abidjan Accord.

But Alhaji Mahama Iddrisu, an adviser to President Rawlings, says he expects the other countries to understand Ghana's position based on the face that "the cocoa industry will continue to be of importance to the economies of all the producing countries" despite the planned production cuts.

In other words, Ghana is committed to the Abidjan Accord but advocates a cautious game in which no nose will be cut to spite the face.
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Article Details
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Author:Heathcote, Baaba
Publication:New African
Article Type:Brief Article
Geographic Code:6GHAN
Date:Nov 1, 2000
Previous Article:Kenya: mine all mine.
Next Article:Managing foreign exchange risk.

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