Accra, Sept. 5, GNA - Government on Friday raised producer price of cocoa by 36 percent to GH¢1,632 per metric ton for the 2008/09 season, in renewed efforts to combat smuggling of the beans abroad and sustain increased production.

Addressing a press conference shortly after a Producer Price Review Committee (PPRC) meeting in Accra, Mr Kwadwo-Baah-Wiredu, Minister of Finance, also announced that the 2008/09 Main cocoa crop year would begin Friday, September 12, weeks earlier than usual. He said beginning next Friday, farmers would now receive GH¢102 for a bag of 64kg of cocoa, up from GH¢75 per bag currently. Mr Baah-Wiredu explained that in arriving at the new price, the PPRC was guided by the current performance of the economy in terms of monetary and fiscal developments, as well as the current stakeholders' cost of operation.

"The current developments on the international cocoa market were equally taken into consideration."

This is the first time in several years that Ghana will start a new crop year at a period, other than its traditional month of October, a decision Mr Baah-Wiredu said was predicated on the need to streamline the sector to make it more efficient.

"We want to bring more efficiency in timeliness of purchases and also respond to current demands and developments in the cocoa industry." The government had been widely expected to increase the producer price for the new season, following reports of heavy smuggling to Cote d'Ivoire, whose traders were offering much higher price for Ghana's high quality beans with which they mixed their stock. The Ghana Cocoa Board (Cocobod) estimates that at least 50,000 tons of cocoa has been smuggled this year.

Mr Baah-Wiredu announced that government would hold a strategic meeting with Customs officials and cocoa industry representatives next Tuesday to discuss how best to address the smuggling menace. In February this year, Government announced a rare mid-season price increase of more than 25 percent, in a frantic move to keep pace with rising prices in the international markets.

Mr Baah-Wiredu said as in the previous seasons, government had directed Cocobod to pay bonuses on the 2007/08 Main crop and that the first payment would be made in October this year. "This will be substantially higher than that of the previous year."

On local processing of cocoa, he said three more companies with installed capacity of 126,000 tons would soon begin operations to add up to eight companies with a cumulative capacity of 363,500 tons by the end of the year.

This will help the country attain its objective of 50 percent local processing capacity, he added. He said an estimated GH¢80.9 million would be spent on pests and disease control, in addition to GH¢15.1 million that would be spent on swollen shoot virus disease.

Furthermore, GH¢65.5 million has been earmarked for fertilizer application, an essential component in the drive to encourage farmers to shift from traditional to hi-tech production. Mr Baah-Wiredu reassured that with the signing last Tuesday of a one billion dollar syndicated loan for the Cocobod, there are adequate funds to cover crop purchases in the 2008/09 year and appealed to buyers to pay farmers promptly.