People work with cocoa beans in Enchi June 17, 2014. Picture taken June 17, 2014. Ghana emerged as a success story during the 2000s, when war, political instability and a disastrous liberalization brought Ivory Coast's cocoa sector to its knees.

18 October 2016, ACCRA (TSR) – Some cocoa farmers at Suaman Dadieso in the Western Region of Ghana have expressed concern about the alleged inability of Licensed Buying Companies (LBCs) to purchase their crops resulting in piling up of the agro-product in their sheds.

LBCs are limited liability companies which are issued with dealers licenses by Ghana Cocoa Board to purchase and deliver cocoa beans to the designated clearing points.

The Ghana Cocoa Board (COCOBOD) is a Ghanaian government-controlled institution that fixes the buying price for cocoa in Ghana, the world’s second largest producer of the commodity. Price-fixing is an attempt to protect farmers from the volatile prices on the world market.

COCOBOD normally secures syndicated foreign and local loans, also called seed funds, and gives these out to the LBCs to purchase cocoa beans from the farmers.

Under the internal regulations in Ghana, LBCs are required to purchase a minimum of 2,000 tonnes of cocoa.

LBCs purchasing failures and inconsistency has been for quite some time now and it has become worrisome to the farmers.

Farmers suspect that COCOBOD had not released the seed funds to the LBCs to purchase the products.

The farmers have allegedly threatened to smuggle their harvests to Ivory Coast should COCOBOD fail to rectify the situation, since they need money to send their children to school.

Meanwhile, a source from COCOBOD has claimed that there had been persistent reports over the past weeks from the buying centres of the inability of the LBCs to pay for their purchase.

The source, however, alleged that sufficient funds had been released to all LBCs currently in the field to pay for their purchase.

“At a recent visit to the field by officials of COCOBOD revealed that some of the LBCs were heavily indebted to the farmers. The Board finds this sad situation unacceptable since it is causing a lot of concern and anxiety to the government and untold hardship to the farmers,” says the source.

The source noted that the performance of some of the LBCs called for a review of the licensing policy.

“COCOBOD may consider the institution of a reward system for LBCs which perform satisfactorily to serve as an additional channel of motivation to encourage others to strive for excellence.”

While an overwhelming majority of cocoa is covered by the COCOBOD, some special types of cocoa are not included, such as some fair trade, organic and high-quality beans. Besides the price-fixing, the organisation sells higher quality hybrid seeds, and does some research on cocoa plant-related diseases.

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