Africa Policy Lens: Ghana cocoa farmers hit by 28.6% price cut amid management failures

Ghanaian cocoa farmers are reeling after the government slashed the guaranteed farmgate price from GH₵58,000 per tonne (GH₵3,625 per 64kg bag) to GH₵41,392 (GH₵2,587 per bag) on 12 February 2026, representing a 28.6% reduction. The move affects approximately 800,000 smallholder farmers and threatens to deepen rural poverty.

The Ministry of Finance attributed the decision to collapsing global cocoa prices. However, Africa Policy Lens (APL), a leading policy think tank, argues that management failures within the Ghana Cocoa Board (COCOBOD) have amplified the impact on farmers.

“Farmers are paying the price for decisions made at the managerial level, not for global market forces alone,” APL said in a statement. “Exchange-rate engineering, delayed market adjustments, and insufficient forward sales created the perfect storm.”

COCOBOD Decisions Under Scrutiny

APL cites four key factors behind the crisis:

Pricing Missteps: In October 2025, COCOBOD raised the farmgate price to GH₵58,000 per tonne using exchange-rate assumptions to deter smuggling, even as global prices were falling. By February 2026, Ghanaian cocoa prices were about US$3,600 per tonne—far below Côte d’Ivoire’s US$5,060/t—transferring the full market shock onto farmers.

Limited Forward Sales: COCOBOD failed to hedge adequately against price drops, leaving the Board with no reserve revenue to cushion farmers.

Policy Divergence from Côte d’Ivoire: While Côte d’Ivoire absorbed some of the price downturn, Ghana passed the burden entirely to producers.

Market Signalling Missteps: Public disclosure of 50,000 tonnes of unsold cocoa by COCOBOD CEO Dr. Randy Abbey triggered a 12.7% drop in international prices within a week, further reducing farmer incomes.

Impact on Rural Livelihoods

Cocoa is the primary income source for roughly 800,000 households, supporting an estimated 3.2 million people. The price cut could reduce earnings by GH₵70,000 (~$5,000) for a farmer producing 10 tonnes, affecting household consumption, education, and health. Women and youth are likely to bear the brunt, with some potentially turning to illegal mining or urban migration.

Calls for Reform

APL is urging urgent reforms, including: establishing an independent risk management committee, creating a statutory price stabilization fund, mandating forward-sales transparency, implementing an exchange-rate neutral pricing formula, and strengthening leadership accountability through parliamentary oversight.

“The crisis is structural, not just cyclical,” APL said. “Sound commodity governance requires anticipation, hedging, fiscal prudence, and transparent communication. Ghana’s cocoa farmers cannot continue to absorb avoidable losses.”

Read the statement bellow: