- Cocoa farmers in Ghana have not received timely payments for their harvests, worsening their financial situation.
- A change in the cocoa trade financing system has shifted the responsibility for advance payments to foreign traders, who have reduced their payments.
- The lack of money is limiting investment ahead of the next season, increasing the risk of poorer harvests.
Payment bottlenecks after a change in the financing system
In Ghana, many cocoa farmers are still waiting for money for the beans delivered for the ongoing season. The crop has been delivered on schedule, but payments have not taken place, which has started to cause financial problems at the local farm level.
The source of the situation is a change in the way the cocoa trade is financed. Previously, liquidity was provided by the state-owned Ghana Cocoa Board using large pre-season loans. This ensured that farmers received money quickly, regardless of when the cocoa was sold on international markets.
Under the new system, it is foreign traders who are supposed to make advance payments even before the final purchase of the beans. The problem is that many of them have stopped payments, especially after the fall in cocoa prices on world markets.
Risks to future harvests and exports
The lack of timely payments is already affecting growers’ decisions ahead of the next season. Farmers are cutting back on fertiliser purchases, postponing tree protection treatments and reducing the employment of seasonal workers. These are short-term survival savings, but in the long term they can reduce plantation productivity and grain quality.
For Ghana, one of the world’s largest cocoa producers, prolonged liquidity problems in the sector could have wider implications. Cocoa remains a key export commodity and an important source of revenue for the country. If farm-level investment constraints persist over the next few months, the risk of a weaker harvest next season will increase and the new financing model may need to be adjusted to prevent further disruption to the supply chain.
