In a major move to empower its cocoa farmers, the Ghanaian government has announced a 62.6% increase in the producer price of cocoa, raising it from $3,100 to $5,040 per tonne for the 2025/2026 season. The new price, which will take effect from August 7, reflects President John Mahama’s commitment to ensure farmers receive at least 70% of the international market price, currently estimated at $7,200 per tonne.
This bold policy shift, announced on August 4 by the country’s finance minister, Dr. Cassiel Ato Forson, is intended to bolster farmer incomes amidst rising global demand and growing competition in the cocoa market. As the world’s second-largest cocoa producer after Ivory Coast, Ghana’s decision comes at a crucial time. The cocoa sector, a cornerstone of the nation’s economy, has faced challenges including smuggling and production declines due to illegal gold mining, known locally as galamsey.
Historical data from the Ghana Cocoa Board (COCOBOD) indicates losses of over 150,000 tonnes to smuggling in the 2022/23 season, made worse by price disparities with neighbouring countries. The price hike, coupled with a reintroduced free fertiliser program, is expected to increase productivity and curb illegal trade. This aligns with a 2023 International Cocoa Organisation forecast of a 462,000-ton global deficit.
The adjustment, translating to GHS51,660 per tonne or GHS3,228.75 per 64-kilogram bag at an exchange rate of GHS10.25 to the dollar, is a departure from the previous administration’s 63.9% FOB share. Experts suggest this could boost farmer morale and rural livelihoods, with a 2023 research from the Journal of Agricultural Economics indicating a potential 30% productivity increase with fair pricing.
Some analysts, however, question the sustainability of the policy, given Ghana’s high public debt and currency volatility. Public reaction has been largely positive, with several commentaries praising President Mahama’s leadership and making comparisons with the legacy of Kwame Nkrumah. Still, debates persist on whether the increase fully meets past political promises or compensates for eroded purchasing power.
The government also introduced a cocoa traceability system and plans to amend the COCOBOD Act to refocus on farmer support, indicating a more extensive reform agenda. All eyes will be on whether this price surge can revive Ghana’s cocoa industry and secure its global standing.
