Ghana and Ivory Coast Cocoa Agreement: An Overview

Cocoa is a vital export commodity for both Ghana and Ivory Coast, who together produce over 60% of the world`s cocoa supply. Despite this, the farmers who grow the crop often face poverty and exploitation. This is partly because the price of cocoa is largely controlled by a few large corporations who can dictate the terms of trade. In an attempt to address this, Ghana and Ivory Coast recently signed an historic agreement to negotiate cocoa prices together and to create a floor price below which the crop will not be sold.

The agreement, signed in November 2019, aims to ensure that farmers receive a fair price for their cocoa and that they are able to make a decent living from their work. The floor price is set at $2,600 per metric tonne, which is considered to be a sustainable price for farmers. The agreement also includes measures to tackle child labor and deforestation, which are both major issues in the cocoa industry.

One of the main advantages of the agreement is that it gives Ghana and Ivory Coast greater bargaining power in the international cocoa market. By negotiating prices together, they can avoid being undercut by other countries and companies who may be willing to pay farmers less. This is particularly important as cocoa prices can be volatile, and farmers often have little control over the market.

The agreement has been praised by many as a positive step for the cocoa industry, but there are also some concerns. Some critics argue that the floor price may be too low to provide a sustainable income for farmers, especially given the rising costs of production. Others worry that the agreement could lead to a reduction in competition, which could ultimately harm farmers if prices are not negotiated effectively.

Despite these concerns, the Ghana and Ivory Coast Cocoa Agreement represents an important development in the fight for fair trade in the cocoa industry. By working together, these two countries have shown that it is possible to challenge the existing power structures and to prioritize the needs of farmers and their communities. Whether the agreement will be successful in achieving its goals remains to be seen, but it is certainly a step in the right direction.