The Ghana Cocoa Marketing Board : conflicts of interest

Abstract

This study investigates the implications of the Ghana Cocoa Marketing Board's economic objectives on cocoa production in Ghana. The realisation of the Board's objectives involves it in withholding from the growers significant proportions of the annual proceeds from the export of cocoa. All withdrawals, be they temporary or permanent, are classified as taxes on the growers. The taxation since the GCMB was created is more than that required for optimal development of the industry. To reach this conclusion the actual taxation is compared with a theoretical optimum taxation computed along the lines suggested by Professor W. M. Corden of Oxford University. Thus a rationalisation of taxation in the Ghana cocoa industry is suggested to involve a cut in actual taxation by 9 per cent. The main purpose of the thesis, which is to analyse the effect of the GCMB's objectives, is discussed in Chapter 5 and a broad spectrum of the world and Ghanaian cocoa industries is investigated. This, it is hoped, will provide the context in which the argument for optimal development of Ghanaian cocoa production is to be advanced. The arrangement and contents of chapters are: (a) a survey of the current world cocoa industry; (b) a survey of cocoa production and the resources employed in Ghana; (c) a review of some important attempts at estimating the Ghana cocoa supply function, and (d) the cocoa marketing system in Ghana. Chapter 1 establishes that there currently exists a favourable market condition for more cocoa to be supplied by producing nations . On the other hand , Chapter 2 suggests that costs of production are rising and that the current land and labour intensive techniques of production are giving way to capital intensive techniques. Chapter 3 shows that Ghanaian cocoa producers are responsive to price incentives, while Chapter 4 outlines the powerful position of the GCMB and the objectives for which the Board stands. Finally , the contradictions between the Board's objectives and their implications for production and incomes are discussed in Chapter 5. Ghana is at an economic crossroads. Unless substantial new developments of initiatives are undertaken. Gross National Product will continue to increase at a rate slower than population increase - meaning , at best , long term stagnation. This thesis argues for one such initiative: a redistribution of income to cocoa farmers. This , it is argued, will so increase production that government revenues will not fall in the long term,and increased export revenues and private income will provide a capital basis for a diversified approach to Ghana's economic development. Show more