02 December 2011
FLOOR PRICE FOR SHEANUT PURCHASES
It may be recalled that on the 10th of October, 2011 the Government of Ghana issued a statement announcing the floor price for sheanut purchases.
The attention of Ghana Cocoa Board has been drawn to the displeasure expressed by a group called National Association of Shea-nut Farmers, Processors and Buyers based in Tamale with respect to the set floor price, claiming that the set floor price is too low, and also a unilateral decision, that can lead to the collapse of the shea industry. Ghana Cocoa Board takes exception to this assertion and wishes to react as follows to set the records straight, and to inform the general public about the true situation.
As part of efforts to revamp the shea industry, Government tasked the Ghana Cocoa Board to take a number of measures including:
In line with this mandate, COCOBOD was tasked to initiate the establishment of a floor price for sheanut purchases. The floor price for sheanut purchases at the farm gate level was decided during a number of stakeholder meetings organised by Ghana Cocoa Board. Invitation to these meetings was open to all stakeholders and widely advertised in both print and electronic media, from the 13th -22nd June, 2011. Key stakeholders from the Shea sector in Ghana were present at these meetings. They included sheanut buyers, shea processing companies, NGOs and civil society groups, the Ghana Cocoa, Coffee, Sheanut Farmers Association of Ghana, among others. It is worth noting that, this association which expressed its displeasure with the floor price was not represented in any of the meetings. It also needs to be emphasised that, the Ghana Cocoa, Coffee, Sheanut Farmers Association which is the nationally recognised body representing the interest of sheanut farmers across the length and breadth of this country, played a key role in the discussions that led to the unanimous agreement on the set floor price.
The price took into consideration all relevant parameters including the average cost of production to the farmers, with a provision for a margin of profit. It is therefore incorrect for the group to state that Government, through the Ghana Cocoa Board unilaterally set the price. Instead, the price was a collective decision by stakeholders.
The floor price announced is supposed to be the minimum or the lowest price to be paid to sheanut farmers at the farm gate level, which is the first point of sale of sheanut, where the interest of the farmer is paramount. In the face of competition, buyers are encouraged to pay higher than the floor price announced. In fact, field reports indicate that this is happening currently. It must be noted that the floor price is not the market price for all sheanut purchases, as alluded to by the group. This is different from the price at the urban centres, which is higher due to transportation, handling and other transaction costs.
The floor price was instituted to prevent exploitation of farmers in the face of the highly volatile international prices for sheanut, which buyers exploit to their advantage. In time past, buyers often paid very low prices, when the international shea prices fell, as is being experienced at the moment. The institution of the floor price is therefore to prevent the re-occurrence of such situations.
It must therefore be pointed out that the farmers would have been worse off if a floor price had not been announced. The current situation would rather help sustain the Shea industry instead of collapsing it as the group purports.
COCOBOD’s interventions in the sector are geared towards a sustained growth of the sector, in which all actors will benefit. COCOBOD recognises the role shea plays in poverty reduction in Northern Ghana, and would therefore continue to take steps that would improve the livelihoods of the many women and their families involved in the sector. In this regard, COCOBOD will continue to collaborate with accredited and well-meaning organisations with the view to ensuring that the collective interest of sheanut farmers and all other stakeholders is taken care of.
ISSUED BY: PUBLIC AFFAIRS DEPT