Cocoa in Ghana

Cocoa is the chief agricultural export of Ghana and the country's main cash crop. Behind Ivory Coast, Ghana is the second largest cocoa exporter in the world. Cocoa cultivation is not native to the country; Ghana's cocoa cultivation, however, is noted within the developing world to be one of the most modeled commodities.

Cocoa production occurs in the country's forested areas: Ashanti Region, Brong-Ahafo Region, Central Region, Eastern Region, Western Region, and Volta Region, where rainfall is 1,000-1,500 millimeters per year. The crop year begins in October, when purchases of the main crop begin, with a smaller mid-crop cycle beginning in July. All cocoa, except that which is smuggled out of the country, is sold at fixed prices to the Cocoa Marketing Board. Although most cocoa production is carried out by peasant farmers on plots of less than three hectares, a small number of farmers appear to dominate the trade. Indeed, some studies show that about one-fourth of all cocoa farmers receive just over half of total cocoa income.

In 1979, the government initiated reform of the cocoa sector, focusing on the government's role in controlling the industry through the Cocoa Marketing Board. The board was dissolved and reconstituted as the Ghana Cocoa Board (Cocobod). In 1984 it underwent further institutional reform aimed at subjecting the cocoa sector to market forces. Cocobod's role was reduced, and 40 percent of its staff, or at least 35,000 employees, were dismissed. Furthermore, the government shifted responsibility for crop transport to the private sector. Subsidies for production inputs (fertilizers, insecticides, fungicides, and equipment) were removed, and there was a measure of privatization of the processing sector through at least one joint venture. In addition, a new payment system known as the Akuafo Check System was introduced in 1982 at the point of purchase of dried beans. Formerly, produce buying clerks had often held back cash payments, abused funds, and paid farmers with false checks. Under the Akuafo system, a farmer was given a check signed by the produce clerk and the treasurer that he could cash at a bank of his choice.

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