ACCRA (Reuters) - Ghana’s cocoa industry regulator will stop supplying free fertiliser to the country’s cocoa farmers and instead subsidise the products in an effort to create a fairer market, a spokesman for Cocobod said on Friday.
The policy change is one of a series the New Patriotic Party government that won power at an election in December could implement in an effort to liberalise the sector and boost production.
Ghana, the world’s second-largest exporter of cocoa behind neighbouring Ivory Coast, is on track to exceed its 800,000 tonne target for the 2016/17 season.
For years farmers said the distribution of free fertiliser was unreliable, unfair and products went disproportionately to supporters of the previous National Democratic Congress government, a charge Cocobod denied.
At the same time, cocoa experts said the reliance on free products distorted the market by encouraging farmers to wait for government supply rather than budgeting to buy their own.
“The farmers complained that not all of them were getting the quantities that they needed when it was free,” Cocobod spokesman Noah Kwasi Amenyah told Reuters.
The price will be 80 cedis ($19) per 50kg bag, rather than the regular price of 151 cedis, he said, giving no further details.
Cocoa experts including non-governmental organisations say that Cocobod’s new executive is receptive to a policy document they have submitted that aims to stimulate an industry that is one of Ghana’s top earners of foreign exchange and accounts for about 7 percent of gross domestic product.
The seven-page document, seen by Reuters, recommended subsidy reform to eliminate market distortions as well as steps to map cocoa farms and soil, improve sector management, upgrade ports and storage facilities and rehabilitate ageing trees.
The plan aims to make Ghana’s cocoa resilient in the face of fluctuating global prices and climate change, competitive by increasing productivity and robust through innovation and a focus on high-quality cocoa and niche markets.
“Ghana’s new cocoa sector development strategy seeks to modernise Ghana’s cocoa sector and produce climate-smart cocoa through increased productivity of farms,” it said.
Editing by David Goodman