Ghana - Current economic position and prospects (Vol. 2 of 2)

AW6 ILE CrPY Vol. 2 This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility, for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION THE CURRENT ECONOMIC POSITION AND PROSPECTS OF GHANA (in two volumes) VOLUME II STATUS AND PROSPECTS OF COCOA May 6, 1969 Western Africa Department  CURRENCY EQUIVALENTS 1 New Cedi = US$0. 98 1 dollar N( 1.02  TABLE OF CONTENTPS 1. -- - - - - - - - - - - --:O- - - - - - tI,,NA.'DY AN10 iECOILAE;NJDAT1OI'I 0* a .........C*..* ... 0 0 0 o. .eo. i - vi CHAPTER I REVIEE1J OF ST.ATUS-ANlD-PROSPECTS-OF-COCOA-PRODUCTION- ...;;;;..-; 1 a.- General . *... . ........... ........ **e . e.g... 1 b. Prospects of Cocoa-Production-Gin-G hana....4.. .-. 2 c. Capsid C oto-2 d. Swollen Shoot *..................................aa ----------- 4 e. Farm Yaintenance-and-Harvesting -;;-;............ f. New Varieties ..............e. , e ..c. es.; 5 g. The Ghaia Cocoa Farmer- ....................... 6 h; Long-term Trends ................ ..... ..... ; 7 i. Discussion on Future Prospects for Cocoa Production .. 9 CH7IAPTER II INSTITUTIONS AND POLICIES-AFFECTING-COCOA-PRODUCTION0- 13 I. Cocoa Division ..........e........*-;*-*-s**- *- O- 13 A; Swollen Shoot Policy 15 Be Capsid Control Policy ............................ 19 C; Policy on Improved Planting Haterial ..; ; 25 Do Other Cocoa Division Field Policies-. .;; 27 E. Status of the Cocoa Division ;;.... .- ........ 0- . 30 - F. Summary and Recommendations O .;.;.; ;;...;.; 32 II.- Cocoa Research Institute of Ghana- O..;;. 33 III. The Produce InspectionDivision ;...........ee... 36 IV. Cocoa Busing Organizations g.e.ee.g.egg..gee, -e.- 37 CHAPTER III ESTILMES OF AN\NUAL GH-AAIAN- sUPPLY-1968/69 1972/73 . 39 The Capsid Effect ................ 39 WVeather Variations ; ;;;.;;;;......e..e...g.,a...g aO' - 40 New Planting eeegssgeeeOeeegee'O es.ee.... ; ; e e'O e s'ge 40 Influence of-Low Price- ....;.; g.e.e.g ........ 142 Smuggling ........................... . ...... 43 Fertilizers and Pod-Disease-Control. ;. rge. O O 1 43 Crop St.atistics ................ . . ...gge C 43 Estimate for 1968/69 Crop Year ..4...;;;. 141 Calculation of Long-Term Estimates ...;;.......... 44 M'!eaning of Past and Projected Figures ................ 45 C1{APTER IV PROPOSED CROP FORECASTING SCHEME- * egggeggeg.gggggegg 48 Introduction- *; .;. ........ 1, .- 48 Background ..... ;w ;;;;;;;;;;..;;........ 148 Recommendations e ggeggg.geegg.eg.eeeg.ggegeg 49 Collection of Data Essential for Crop-Forecasting- ..... 50 Long-Term Crop Forecasting ..;; 54 Organization of Forecasting .......................... 55 CH.VPTER V A PLAN OF ACTION TO-REABILITATE-THE-GIANIA-COCOA-INDUSTRY-; 56 Introduction .. *.. g.e..g............... 56 Production Policy ... .... ...... 56 Cocoa Farm Improvem ent-Scheme- .... ;;;;;*,ggg* 59 Producer Price ------... 61 Buying Arrangements ............ .....o..; 63 Local Processing of Cocoa- 64 Wlorld Selling Strategy e... .......... g , 65 CHAPTER VI THE WORLD COCOA OUTLOOK ----------.......--------... 67 I,IethodoLogy .... 68 STATISTICAI, APPENDIX ANl\EXES  INHRODUCTION 1. This report deals with cocoa from production through to its sale abroad. The report has been written in a manner that will, it is hoped, make it understandable by non-agricultural people. Therefore, attention has been given to explaining the fundamental characteristics of cocoa as well as the crucial assumptions underlying judgments made about the cocoa industry in Ghana. However, as far as possible detailed and explanatory information has been relegated to appendices. 2. This report takes as a fundamental assumption that increased productivity is more important than increased acreage under cocoa, i.e. more cocoa from existing trees as opposed to more trees or replanting higher yielding trees. The report also assumes that the basic institu- tional framework for dealing with cocoa will remain essentially unchanged, e.g. the primary agent for implementing Government policies towards in- creased cocoa productiori will be the Cocoa Division of the Ministry of Agriculture; and the marketing system will continue to be one of monopoly purchasing at home and selling abroad by the Harketing Board so that the M'jarketing Board can pay the farmer both in cash and in kind. This means that the Government can change producer prices and services thereby in- fluencing cocoa farming independent of, but within the range of possibil- ities offered by, domestjic fiscal and world cocoa price trends. 3. The report is subdivided into six chapters. Chapters I, II and IV were prepared by 1r. Philip Hammond, a Consultant to the IBD, following a five-week mission to Ghana in October 1968 which involved an extensive tour of the main cocoa-growing areas of that country. Chapters III and V were prepared by Mr. Hammond and 14r. Hansen, the latter a member of the then Africa Department of the Bank. Chapter I deals generally with the main factors influencing cocoa production with implications for policy, and in a number of instances more detail is given in the second Chapter which covers past, present and proposed policies in relation to cocoa production. Chapter III deals with future cocoa production possibilities depending on the production policy adopted. Chapter IV discusses the problem of crop forecasting, and recommends changes in the existing sys- tem to improve the information base for planning production and marketing policies. Chapter V discusses a possible plan of action to assist in the improvement of Ghana's cocoa sector. The final Chapter, wJritten by Mr. Slnaisher Singh of the Commodities Division of the Bank, discusses the problems of forecasting world supply and price, ancd arrives at a tenta- tive estimate for this for the next five years. 4. Subsequent to preparation of this report the Governmett announced: that the producer price would be increased by 14 percent to N