Ghana has raised the price it pays cocoa farmers by more than 60% for the 2025/26 season, a bold move that could pressure top producer Ivory Coast and further strain global supply chains already reeling from climate shocks and declining yields.

Finance Minister Cassiel Ato Forson announced Monday (August 4) that the farmgate price will rise from $3,100 to $5,040 per tonne, a 62.58% increase, in fulfilment of a campaign pledge by President John Mahama to ensure farmers receive a larger share of export earnings.

“The cocoa farmer remains a critical pillar of our economy, and this government is committed to ensuring they benefit from the gains we are making,” Joy News quoted Forson saying in Accra.

Ghana, the world’s second-largest cocoa producer, typically sets its farmgate price ahead of Ivory Coast, which leads global production. In comparison, Ivorian farmers currently receive 1,500 CFA francs ($2.44) per kilogramme, or roughly $2,440 per tonne - less than half of Ghana’s newly announced rate.

The hike brings Ghanaian farmers’ earnings to 70% of the Free-On-Board (FOB) value — the price of cocoa when loaded onto ships for export. The current FOB benchmark stands at $7,200 per tonne, based on a blend of past contracts and forward sales for the upcoming season, according to Forson.

In the previous 2024/25 season, Ghanaian farmers were receiving only 63.9% of the FOB value, or $3,100 out of $4,850 per tonne. The new policy narrows that gap while aiming to protect farmers from income losses during currency fluctuations and inflationary shocks.

Forson said the decision also reflects recent macroeconomic gains, including a strengthening cedi and easing inflation, allowing the state to increase support to farmers.

Ghana’s cocoa pricing system - overseen by the state-run COCOBOD - has long aimed to stabilise earnings for smallholder farmers. However, critics say state controls have historically failed to keep up with sharp market increases, particularly in recent years as global prices surged to record levels.

That stagnation, combined with economic hardship, has pushed some farmers to abandon cocoa altogether, selling off their land to illegal gold miners whose operations have led to widespread environmental degradation and further squeezed cocoa output.

Cocoa activists and West African governments have consistently called for fairer pay along the industry’s global value chain, blaming both international commodity buyers and domestic policy gaps for the persistent poverty among cocoa growers.

In a bid to support productivity, Forson also announced the reintroduction of Ghana’s free cocoa fertiliser programme, under which farmers will receive fertilisers, insecticides, fungicides, spraying equipment and flower inducers at no cost.

The price increase is expected not only to boost farmer income but also to influence market behaviour across the region. With Ghana setting the pace, observers say Ivory Coast, Nigeria and Cameroon may now face pressure to revise their own cocoa prices to remain competitive and prevent cross-border smuggling.