Cocoa farmers warn bumper harvest threatened by payment delays

Cocoa farmers in Ghana say delayed payments of up to six months are undermining their ability to harvest a rain-boosted mid-crop, despite improved yields in the world’s second-largest cocoa producer.

Farmers speaking to Reuters reported that the prolonged payment delays have severely constrained their working capital, leaving many unable to hire labour or finance essential harvesting activities. The cocoa sector remains a key pillar of Ghana’s rural economy, supporting an estimated 800,000 farming households.

“I have cocoa on the trees that needs to be harvested, but there is no money to even do that,” said Theophilus Tamakloe, Vice President of the Ghana Cocoa Cooperatives Association. He added that the situation reflects challenges faced by more than 340,000 members of the association.

Mr. Tamakloe also revealed that he currently has 14 freshly harvested bags of cocoa, weighing approximately 896 kilograms, stored in his warehouse. He said he has refused to release the stock to buyers on credit due to concerns over delayed payments.

“I will only release them to an LBC (Licensed Buying Company) that pays me instantly,” he said, noting that about 65 Licensed Buying Companies operate across the country.

Another farmer, Abdulai Adoswin, said he had already harvested 300 bags this season, an increase from 190 bags during the same period last year. However, he warned that sustaining such gains depends on timely payments before the main harvesting season ends around August or September.

The regulator, Cocoa Board of Ghana, has stated that it has been releasing funds to Licensed Buying Companies to clear outstanding arrears dating back to November. However, uncertainty persists within the supply chain.

Two sources within Licensed Buying Companies told Reuters that they are still awaiting payments for cocoa already supplied and sold. One source, speaking on condition of anonymity, expressed confusion over the situation.

“My understanding is that COCOBOD has sold all the beans supplied for the 2025/26 season,” the source said. “We are still waiting to be paid and I really don't know what is going on anymore.”

COCOBOD did not immediately provide detailed clarification, saying it would look into the matter.

Ghana’s cocoa industry has been under sustained financial pressure in recent months, with liquidity constraints affecting the entire supply chain. These challenges have contributed to government adjustments in the fixed producer price paid to farmers.

The sector has also been affected by declining production levels in recent years due to multiple structural issues, including crop disease, ageing cocoa trees, illegal mining activities, and increasingly erratic weather patterns.

Data from the Bank of Ghana indicates that cocoa export revenues fell by approximately 20% year-on-year, dropping to 956.3 million cedis (about $86 million) in February.

Although improved mid-crop yields have provided some relief for farmers, the gains are being offset by a sharp decline in global cocoa prices, which have fallen by nearly 75% from record highs recorded in late 2024.

The combination of delayed payments, falling prices, and structural production challenges continues to place significant strain on Ghana’s cocoa sector, raising concerns about the sustainability of farmer livelihoods and national export earnings.