{"id":25305,"date":"2022-02-16T11:20:17","date_gmt":"2022-02-16T11:20:17","guid":{"rendered":"https:\/\/bartalks.net\/?p=25305"},"modified":"2022-02-21T14:04:08","modified_gmt":"2022-02-21T14:04:08","slug":"analysts-questions-if-cocobod-shortchanges-famers-over-lid","status":"publish","type":"post","link":"https:\/\/bartalks.net\/analysts-questions-if-cocobod-shortchanges-famers-over-lid\/","title":{"rendered":"ANALYSTS QUESTIONS IF COCOBOD SHORT-CHANGES FARMERS OVER LID"},"content":{"rendered":"\n

Kwarme Kwateng has written<\/a> an interesting analysis of the money paid to Cocoa farmers by COCOBOD, for their living income differential (LID). Ghana promised to pay farmers 100% of the money brought in by the Living Income Differential, but the devil, as they say, is in the detail, and Kwateng breaks down the numbers, and came up with a surprising result.<\/p>\n\n\n\n

The LID is paid to Ghana in US dollars, but COCOBOD pays farmers in local currency (Cedis) when it purchases Cocoa at the price set each year by the regulator.<\/p>\n\n\n\n

Since COCOBOD sets the price for the year ahead, they must estimate the exchange rate. For the 2020\/21 crop, Kwateng states the rate was set at US$1 to GH\u20b55.8, which turned out to be very close to the actual rate, which stood at GH\u20b55.97 at the end of the season.<\/p>\n\n\n\n

This year however, the current exchange rate looks to be much higher. I checked the rates myself and saw $1 would buy GH\u20b55.94. The government of course would get a significantly improved rate than one found on the internet.<\/p>\n\n\n\n

Yet COCOBOD has not improved prices to farmers.<\/p>\n\n\n\n

To be conservative, if the mean exchange rate for this crop year is GH\u20b56, with a forecasted Cocoa production volume of 1,000,000 tons, then COCOBOD would owe smallholder Cocoa farmers by a total of GH\u20b580m in LID arrears.<\/p>Kwarme Kwateng<\/cite><\/blockquote>\n\n\n\n

GH\u20b580m is equivalent to US$12,318,674, a substantial sum that could be used to make a real difference to the Cocoa farmers. By a strange coincidence, that number is almost exactly the loss made by the government owned chocolate company, CPC. I actually think that is a coincidence, but conspiracy theorists have something to get excited about.<\/p>\n\n\n\n

Solving the problem isn\u2019t hard. At Bartalks, our accounts has a line for \u2018Foreign Exchange Gains\/Losses\u2019, to account for variances from our invoices, and the actual money we collect, which may be in different currencies.<\/p>\n\n\n\n

I\u2019d be surprised if Ghana wasn\u2019t already accounting for this. They simply need to distribute the gains, perhaps holding back a percentage to offset future foreign transaction losses, and smooth the distribution curve.<\/p>\n\n\n\n

The question remains if Ghana is going to be true to their word, to deliver all the money paid as an LID premium to the farmers, or not?<\/p>\n\n\n\n

It may prove difficult for the country\u2019s leaders to point the fingers at the Cocoa buyers and tell them of their obligations, if they, themselves, are pocketing some of the cash.<\/p>\n\n\n\n

Kwarme Kwateng MBA, MSc. is an Agricultural Trade Policy Analyst, Cocoa-Chocolate Industry Expert, Digital & Industrial Project Manager, and we noted he is available for projects. You can contact him on LinkedIn<\/p>\n\n\n\n

Photo courtesy of Nestl\u00e9<\/p>\n","protected":false},"excerpt":{"rendered":"

Kwarme Kwateng has written an interesting analysis of the money paid to Cocoa farmers by COCOBOD, for their living income differential (LID). Ghana promised to pay farmers 100% of the money brought in by the Living Income Differential, but the devil, as they say, is in the detail, and Kwateng breaks down the numbers, and […]<\/p>\n","protected":false},"author":10,"featured_media":25308,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_gspb_post_css":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[1701,1828,1831],"tags":[],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/bartalks.net\/wp-json\/wp\/v2\/posts\/25305"}],"collection":[{"href":"https:\/\/bartalks.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bartalks.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bartalks.net\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/bartalks.net\/wp-json\/wp\/v2\/comments?post=25305"}],"version-history":[{"count":4,"href":"https:\/\/bartalks.net\/wp-json\/wp\/v2\/posts\/25305\/revisions"}],"predecessor-version":[{"id":25370,"href":"https:\/\/bartalks.net\/wp-json\/wp\/v2\/posts\/25305\/revisions\/25370"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bartalks.net\/wp-json\/wp\/v2\/media\/25308"}],"wp:attachment":[{"href":"https:\/\/bartalks.net\/wp-json\/wp\/v2\/media?parent=25305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bartalks.net\/wp-json\/wp\/v2\/categories?post=25305"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bartalks.net\/wp-json\/wp\/v2\/tags?post=25305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}