Accra, Oct. 23, GNA - Government on Thursday pegged this year's new producer price of cocoa at 9 million cedis a tonne up from 8.5 million cedis, Mr Yaw Osafo-Maafo, Minister of Finance and Economic Planning announced in Accra.

A bag of 64 kilograms of cocoa will now fetch 562,500 cedis as against 531,250 cedis for the previous season, representing 69 per cent of the Free on Board (FOB) price.

The new price takes immediate effect and will be applied for the 2003/2004 cocoa season.

The increase in producer price is the fifth, since the government first announced an increase in May 2001.

Licensed Buying Companies (LBCs) are, therefore, directed to pay the new price for all purchases done before the opening of the season. Mr Osafo-Maafo said government had given approval for improved farmers' income despite the current low prices for the crop on the world market.

He said the new price, which is far above what is being paid to farmers in neighbouring countries, should serve as an incentive to the farmers to be confident about the future prospects in the industry. "This should spur on farmers to work harder to improve quality and quantity of their cocoa farms," the Minister said.

Mr Osafo-Maafo said government was pursuing prudent policies and measures aimed at improving the crop yield and the lifestyle of farmers through enhanced agronomy practices, diseases and pests control exercise, and provision of extension services.

These measures, he said, had resulted in increasing the yield to 497,000 tonnes for 2002/2003 crop season, the second highest in the country's history.

It has enabled the country to regain its second position of cocoa producing countries.

The highest cocoa production of 581,000 metric tonnes was recorded in 1964/65.

To further build on the gains so far chalked, the government is committing 341 billion cedis to continue with its mass spraying programme to control capsid and black pod diseases in all the six cocoa growing regions.

The exercise will also sustain the 40,000 jobs, which has been created for the spraying gangs. There are also plans to rehabilitate existing roads and construct new ones in the cocoa growing areas with a 10 million Euro support from the European Union to facilitate evacuation of cocoa and other farm produce.

Mr Osafo-Maafo said government would continue to reward farmers through the payment of special bonuses from monies accruing from the equalisation accounts into which windfalls from better than expected prices are paid.

He announced a pre-season bonus of 78.6 billion to be paid to farmers, bringing the total bonus for the 2002/2003 to 156.4 billion. Government has already paid 77.8 billion cedis as bonuses in February, this year, the Finance Minister said.

The government, he said, is also providing 12 billion cedis to support wards of cocoa farmers in their education.

The Minister urged the Cocoa Board (Cocobod) to ensure that the scheme is transparently administered with the view to enhancing the development of the cocoa industry.