The Ghana Cocoa Board (COCOBOD) must be dismantled to pave the way for cocoa farmers to sell their beans directly to buyers; this is the strong call of CDD-Ghana fellow and founder of NBOSI, Dr. Hene Aku Kwapong.
This strong call from the CDD-Ghana Fellow comes amid the struggles of COCOBOD, as cocoa farmers across Ghana are experiencing delayed payments for their beans since November last year.
He maintains that COCOBOD, in its current state, is not fit-for-purpose, describing it as a failed institution. For him, the time has come for the state to fundamentally rethink how Ghana manages its most important agricultural export.
His comments come against the backdrop of deepening challenges in the cocoa sector, such as delayed farmer payments, mounting debt, strained financing arrangements, declining production, and declining confidence in the sector’s governance.
A System Under Strain
In recent months, some cocoa farmers have come under intense financial pressure due to the delayed payments for beans already delivered. For many rural households, cocoa income is the only source for school fees, hospital bills, food on the table, and capital for the next planting season.
At the institutional level, COCOBOD is battling significant financial pressure. Reports point to heavy debt burdens, liquidity constraints, and complications arising from forward sales contracts signed at lower international prices. The traditional syndicated loan model that once supported cocoa purchases has also faced credibility challenges in recent years.
At the same time, global cocoa prices have been volatile, and Ghana’s production has fluctuated due to disease, smuggling, climate stress, and input supply challenges.
Dr. Kwapong is of the view that these recurring challenges are a signal that COCOBOD has outlived its usefulness.
As he put it strongly, for him, “COCOBOD has failed. Time to dismantle and move to a market-based industry so farmers can sell directly into markets.”
What Does “Market-Based” Really Mean?
Under the current system, COCOBOD sets the producer price, regulates Licensed Buying Companies, controls exports, and largely determines how cocoa is marketed internationally.
Farmers sell to buying companies at a fixed price announced at the start of the season.
He believes there should be a shift from the old system to a new system. The market-based approach will mean farmers could sell directly to exporters, processors, or international buyers.
Prices would be determined by supply and demand rather than a centrally fixed rate, and private companies would compete openly to purchase cocoa.
Such a market-based approach is expected to increase competition, drive better prices, faster payments, and innovation in logistics and financing.
To put it simply, instead of waiting for funds to trickle down through COCOBOD to Licensed Buying Companies and then to farmers, a farmer in Sefwi could negotiate directly with a buyer offering immediate payment at competitive rates.
But at What Cost?
For proponents of a free market economy, the idea of market liberalisation raises. However, there could be consequences.
On one hand, farmers are frustrated. Delayed payments erode trust, as a more open system could empower them to seek the best deal, much like farmers in other commodity markets.
On the other hand, COCOBOD has historically provided more than just marketing services. It subsidises fertilisers and inputs, supports disease control, funds research, maintains roads in cocoa-growing areas, and stabilises incomes during price crashes.
If COCOBOD is dismantled, who pays for mass spraying against swollen shoot disease? Who funds cocoa research? Who cushions farmers when global prices collapse?
These are also clear impact questions that require attention amid the call for COCOBOD to be dismantled. They affect whether a farmer can replant diseased trees or afford to keep a child in school during a bad season.
The Bottomline
Ghana’s cocoa sector is not just an industry; it is a pillar of the national economy. Cocoa remains a key source of foreign exchange and rural employment. Any shift to a market-based system would be one of the most consequential economic reforms in decades.
For now, the conversation is about whether dismantling COCOBOD would unleash innovation and fairness, or expose farmers to even greater risks in a volatile global market.
