Ghana: Big ambitions for cocoa industry
The state-owned Ghana Cocoa Board (Cocobod) has announced radical changes to the country’s cocoa strategy.
West African and indeed global output has risen steadily over the past 20 years but this has largely been achieved by bringing more land into production rather than through higher yields. However, Cocobod has now announced plans to boost yields in order to achieve a step increase in production.
This may not yet be sufficient for Ghana to challenge Côte d’Ivoire’s position as the world’s biggest producer, but it should be sufficient to retain Ghana’s second placed ranking in the face of Indonesian competition. New Cocobod chairperson Hackman Owusu-Agyemang announced the new strategy at the West Africa Fertiliser Agribusiness Conference in July.
The organisation is to encourage the use of more pest and disease control, soil fertility management, artificial tree pollination and the planting of improved strains. “To preserve the environment and to optimise returns from fertiliser application,” he said, “Cocobod is taking steps to ensure that fertiliser formulation in Ghana is made site-specific and to build the capacity of farmers on integrated soil fertility management.”
It takes at least four years for a cocoa tree to generate fruit, so the impact of planting will not be felt immediately. However, Cocobod and the government are targeting a massive increase in production from 840m tonnes in the 2016–17 harvest to 1.5m tonnes in 2020–21.
At the same conference, Namanga Ngongi, chairman of the board of trustees of the African Fertiliser and Agribusiness Partnership, said of African farmers in general: “They are constrained by poor rains and lack of access to better inputs, improved and resilient crop varieties, better farming methods and low uptake of other technologies to trigger agricultural enterprise. Value addition is the key we need to turn and open the door to Africa’s new agri-preneurs.”
Production figures have long been difficult to verify because of the proliferation of cocoa smuggling between Ghana and Côte d’Ivoire. Prices are regulated by the two countries’ marketing boards and so price differentials can make it attractive to smuggle a consignment across the border for sale.
Ivorian prices have been higher in recent years, so the direction of smuggling has been from Ghana into Côte d’Ivoire. However, the Ivorian government has cut its prices over the past year because of a one-third fall in international prices over that period.
Ghana’s previous goal, set 18 months ago, was for 1.6m by 2026, but this was largely to be achieved through increasing the acreage under cultivation. The change in strategy appears to have been driven by Owusu-Agyemang himself.
He told delegates at the conference that Ghana “plays an important role in the provision of employment for about 800,000 farm families. It also serves as a major source of foreign exchange and government revenue for the provision of socio-economic infrastructure. In short, this country has been built on the back of the cocoa industry.”
The crop’s 5% contribution to GDP underplays its importance to the national economy. It accounts for 24% of export revenues and provides the backbone of the rural economy across wide swathes of the country at a time when there has been some criticism of the gap in development between the urbanised southern coastal strip of the country and the rural centre and north. In addition, the fact that a large proportion of cocoa is produced by smallholders helps to support rural businesses.
About 70% of the world’s cocoa comes from small independent farms in West and Central Africa, mostly of less than two hectares in size. A far greater proportion of the crop in Latin America and Indonesia is grown on large plantations. Even if the production targets are achieved, Ghana does not risk overdependency on the crop as it has a relatively diverse economy. Côte d’Ivoire is more vulnerable as cocoa accounts for 60% of its export revenue.
Aside from the Cocobod strategy, the government is keen to ensure that more of its cocoa is processed inside the country. President Nana Akufo-Addo held talks with the Swiss government in June over support for Ghanaian cocoa processing, presumably via Switzerland’s large chocolate industry.
The president announced: “Ghana, under my presidency, will no longer become mere producers and exporters of cocoa beans, and will continue the policy of processing more and more of our cocoa.” The government offers a range of financial incentives for processing and manufacturing investment under its “One District, One Factory” programme.
Cocobod hopes that this will encourage fertiliser producers and cocoa processors to set up plants in rural areas. The government has subsidised fertiliser consumption since 2008. Côte d’Ivoire is still the global cocoa superpower with production of 1.7m in 2015-16. Global consumption is currently increasing by about 2.5% a year.
Indonesia is the only non-African country among the world’s five biggest producers, which also includes Nigeria and Cameroon. Uganda, Togo, Sierra Leone and Madagascar are also significant producers, while production from São Tomé and Principe is considered among the world’s highest-quality cocoa.
Nigerian production is rising but Cameroon desperately needs more investment in planting new trees and the yields from most of its established trees are falling. Deforestation is a threat across Africa’s cocoa producing regions, so a variety of schemes have been launched to protect forest areas near cocoa farms. For instance, US confectioner Mondelez International has set up its Cocoa Life sourcing programme to promote sustainable purchasing.
“The Cocoa Life programme has contributed immensely to ongoing national efforts to make the cocoa sector economically and environmentally sustainable through the promotion of climate-smart approaches to cocoa farming,” said Yaw Kwakye, head of the climate change unit of Ghana’s Forestry Commission in June. “Spearheading the uptake of innovation and best practices in major cocoa communities in Ghana, the programme remains a leader in advancing a new way of cocoa production that addresses deforestation and forest degradation.”