While the government may be patting itself on the back for increasing the price of cocoa given the circumstances, it is emerging that the majority of cocoa farmers are living below the recognized living standards benchmarks
This means about 70% of cocoa farmers, the cultivators of one of the country’s foremost foreign exchange earners, are not living a decent life. Irrespective of the recent increase, the numbers still don’t add up to a decent living.
IMANI Africa’s analysis reveals that a cocoa farmer with an average household size of five needs to earn at least US$1.96 per day, which is about GH¢20.09 at the official exchange rate, to meet the internationally recognised living income benchmark.
Unfortunately, most farmers are falling far short. IMANI’s policy brief, cited by The High Street Journal, further notes that the situation is dire for roughly 35% of cocoa farmers. This 35%, who cultivate less than a hectare, have daily earnings from cocoa that average just GH¢5.90. This is nearly three times below the living income line.
Even for about 70% of farmers with up to two hectares, daily cocoa earnings hover around GHC11.80, still far short of the target.
“To have a decent living, it is estimated that the cocoa farmer with an average household size of 5 should earn a living income of US$1.96 every day. Using the forex rate of GHC10.25 (communicated by COCOBOD), this translates to about GHC20.09. Comparing the living income benchmark of GHC20.09 to the expected daily income of GHC5.90 for farmers cultivating up to a hectare, about 35 per cent of farmers could be living almost three times below the expected living income,” IMANI noted.
It added that, “If we use the maximum annual cocoa income for about 70 per cent of farmers who cultivate up to 2 hectares, the expected daily cocoa income would be GHC11.80, which is woefully below what the average farmer needs to achieve a living income. This means that despite the new prices, about 70 per cent of Ghanaian cocoa farmers remain worse off.
IMANI’s analysis also uncovers that this living standard gap is not the only challenge confronting the cocoa farmers. In many cases, farmers’ costs swallow almost half of their annual income, yet production expenses rarely feature in the national debates over cocoa pricing.
“In most cases, the cost profile of the cocoa farmer could reach almost half of their annual income (including other income sources); however, the cost of production argument is always missing from the political debates,” IMANI further noted.
The situation is a clear indication that the price increases may grab headlines, but without addressing low productivity, high costs, and limited farm sizes, most cocoa farmers will always remain trapped below the income needed for a dignified life.
