(Bloomberg) -- Ghana’s agriculture minister said the country will not cut the pay of cocoa farmers, marking a turnaround from a previous announcement that producer compensation has to reflect a decline in global prices.
The change of plan in the world’s second-biggest producer comes after the finance ministry said in January that Ghana cannot continue to subsidise farmers’ pay to keep them at the level they were at before prices slumped more than 25 percent. The turnabout will prolong a pricing gap with neighboring Ivory Coast, the biggest producer, encouraging cross-border smuggling of beans.
“We can’t go to the poor farmer to say we are cutting prices,” Agriculture Minister Owusu Afriyie Akoto said Tuesday in a broadcast on Citi FM. “We will make savings through other means.”
Ghana Cocoa Board is losing the equivalent of about $600 for every metric ton of the 850,000 tons that it is purchasing this season until September, the regulator said earlier in February. The country has kept prices unchanged since setting producer pay at the equivalent of 7,600 cedis ($1,720) per ton in October 2016.
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