Ghana's cocoa farmers turn to smuggling as currency falls

He is not the only farmer to have turned to illicit trade in the world’s number two cocoa producer as the country’s currency, the cedi, has fallen sharply and production costs have soared.

“With the cedi losing value every day, selling in Ghana just doesn’t cut it,” said Antwi, who lives in Suhum, in the Eastern Region, 74 kilometres (46 miles) from the capital, Accra.

“The prices are better across the border, and the stronger currency means I can feed my family and pay off my debts.”

Ghana is emerging from one of it worst economic crisis in years after securing a $3 billion credit from the International Monetary Fund and restructuring most of its debt.

But the depreciation of the cedi, which has lost over 20 percent of its value against the dollar this year, has severely impacted the profitability of cocoa farming even as international prices topped $10,000 per tonne in March before receding in recent months.

Production costs have jumped, with fertilisers and other materials needed to farm becoming increasingly expensive.

Poor road networks have also inflated transportation costs, further squeezing farmers’ margins.

Cocoa farmers are obliged to sell their produce to the state-run Ghana Cocoa Board or COCOBOD, which fixes prices to help protect farmers from market volatility.

In April, the government increased the cocoa price paid to farmers to $2,188 (33,120 cedi) per tonne, a 58.26 percent hike.

But this has not been enough to offset the rising costs and the lure of higher prices in Ivory Coast and Togo.

“If the government increased the cocoa price to match our neighbours, the smuggling would stop,” said another Suhum farmer, Serwaa Adjei. “We need to survive.”

Ghana’s cocoa sector, which accounts for about 10 percent of the nation’s GDP, is heavily reliant on smallholder farmers.

These growers, however, have found themselves in an increasingly precarious situation.

Dennis Nyameke, a veteran farmer from the Western Region, explained the economics behind smuggling.

“A bag of cocoa sells for at least $137 in Ghana, but when we smuggle it to Ivory Coast, we can get close to $152,” he said.

“With four children to care for, I can’t afford to ignore that difference.”

Despite efforts by the state-run COCOBOD to tackle these challenges, farmers say they are still struggling.

Fiifi Boafo, head of public affairs at COCOBOD, acknowledged the impact of smuggling, illegal mining and adverse weather conditions on cocoa production.

Illegal mining for gold, known locally as Galamsey, is rife in rural Ghana, impacting water supplies and keeping farmers from land.

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