The Ghana Cocoa Board (COCOBOD) has told cocoa farmers not to hand over their beans to Licensed Buying Companies (LBCs) without upfront payment from the 2026/27 crop year, as part of a new financing arrangement aimed at easing liquidity pressures across the cocoa purchasing system.
The new funding model is expected to provide LBCs with sufficient liquidity to finance cocoa purchases throughout the year, allowing them to pay farmers promptly, speed up purchases and reduce their reliance on bank borrowing.
COCOBOD says the arrangement is also intended to shorten delays between LBCs taking over cocoa receipts and receiving the funds needed to continue purchasing, a problem that has contributed to indebtedness among some buying companies in recent years.
The financing reform will effectively end the practice of LBCs purchasing cocoa from farmers on credit. COCOBOD has directed LBCs to stop the practice and warned that companies that breach the directive again could have their operating licences revoked.
COCOBOD Chief Executive Officer Dr. Randy Abbey, speaking at the launch of the Chamber of Cocoa Marketers, said the directive has already been communicated to LBCs, while farmers have also been advised not to release their cocoa without payment.
“The arrangement is to aid the shorter turnaround time for LBCs so that it can quicken the pace of purchases, eliminate indebtedness to banks and improve the efficiency and profitability of cocoa purchases,” Dr. Abbey said.
He clarified that COCOBOD is not immediately withdrawing the licences of LBCs that have engaged in credit purchases, but said a repeat violation would be treated as a breach of their licensing conditions and could result in revocation.
The new financing model is also expected to improve access to cocoa for domestic processors. Under the previous financing structure, much of the crop had to be collateralised to secure funding, limiting the availability of beans for local processing and value addition.
The reforms form part of broader changes under the Ghana Cocoa Board Bill 2026, which provides for farmers to receive 70% of the gross free-on-board value of cocoa and allows producer prices to be adjusted during the season in line with market indicators.
COCOBOD says the wider reforms are aimed at strengthening the financial position of the cocoa sector, improving payment discipline and creating conditions for greater domestic processing and industrialisation.
