Our History

COCOA MARKETING COMPANY (GHANA) LTD
The first shipment of cocoa from the Gold Coast was made in 1885. However, the first documented shipment of cocoa from Ghana was in January, 1893 when 2 bags were sent from Accra to Hamburg at an invoice value of £215.7. This shipment was made along with 18 bags of coffee. The volume of cocoa export grew rapidly to 20,000 metric tonnes in 1908, and by 1911 Ghana was the world's leading cocoa producer, with 41, 000 metric tonnes. In the early 1920's, Ghana produced 165,000 - 213,000 metric tonnes, and contributed about 40% of the total world output.

From the beginning to the late 1930's the cocoa trade in the Gold Coast was in the hands of local merchants. Companies such as UAC, Paterson & Zochonis, Cadbury & Fry, G.B Ollivant, J. Lyons and UTC imported goods for distribution in the country and bought farm produce, mainly cocoa for export overseas. Cadbury & Fry also bought cocoa to feed their own factory in England, whilst the other companies sold it to brokers.

Cadbury & Fry was very particular about quality and paid a premium price for good quality cocoa. They also supported the expansion of cultivation in the country and provided various forms of assistance to farmers. As a result, they captured a greater share of the market to the chagrin of the other merchant companies. To break the virtual monopoly of Cadbury & Fry, the other companies, led by the UAC, formed an association called the Association of West African Merchants (AWAM) which condemned payment of premium price by Cadbury and eventually succeeded in stopping it.

Cocoa farmers considered the low prices dictated by the merchants unacceptable and decided in 1937 to withhold cocoa from the market. The strike went on for 8 months and storage of cocoa became a problem as farmers depended on merchants for the supply of sacks. There were reports of farmers burning nearly 400, 000 metric tonnnes of cocoa in protest of the unacceptable trade terms. Some local farmers attempted to sell directly and shipped cocoa to Liverpool themselves, but, the problems encountered during the transaction made future attempts unattractive. The British government of the Gold Coast stepped in to restore order, by setting up the Nowell Commission of Enquiry to investigate the crisis. The Nowell Commission report urged the government to assist cocoa farmers by establishing a Marketing Board.

In 1940, the government established the West African Produce Control Board to purchase cocoa under guaranteed prices from all West African countries. It operated throughout the war years and was dissolved in 1946. The experience gained from the establishment of the Produce Control Board through price stabilization led to the formation of a permanent Cocoa Marketing Board (CMB) in 1947. At its inception in 1947, the Cocoa Marketing Board licensed 32 buying agents, including the merchant companies to undertake the internal marketing of cocoa. Prices paid to farmers by local agents were determined by the government on account of the world market prices and local conditions.

At independence, the United Ghana Farmers Co-operative Council became the sole buying agent for the new Ghana Cocoa Board. After 1966 however, the multiple buying system was re-introduced, but without expatriate companies. There were eleven wholly owned Ghanaian companies, including the Produce Buying Company, a subsidiary of Ghana Cocoa Board.

By 1977, the multiple buying systems was again abolished leaving the Produce Buying Division of the Ghana Cocoa Board to become the sole local buying agent for Ghana cocoa and handed purchases over to the Cocoa Marketing Company for export. However, since 1992, the multiple buying systems have been re-introduced with the Produce Buying Company, operating as one of the 20 Local Buying Companies.

THE TRANSITION
For a country that depends heavily on one commodity, it is natural that the government wishes to exert control as much as possible. As is the case for all bureaucracies, Cocobod became inefficient and expensive to run in the light of falling production from 580,869 Mt in 1964/65 i.e 38.59% of global output to 158,953 Mt in 1983/84 season, representing 10% of global output. Employees of the Cocobod in the early 1980s numbered up to 100,000. The Cocobod itself recognized the need to downsize and to privatize some of its activities.

In the early 90's, the World Bank and the Ghanaian government discussed the possibility of privatizing the domestic purchasing of Cocoa. The World Bank granted a credit of $80 Million to assist the privatization programme. In the 1992/93 cocoa season, Cocobod approved the license of four private companies to buy cocoa from farmers at approved government prices for a commission.

Today, the internal marketing of cocoa is completely privatized, with about 23 Licence Buying Company (LBC) competing at farm gate to buy cocoa from farmers. The LBC's also operated along the administrative blue-print of the Produce Buying Division, by appointing purchasing clerks to manage cocoa buying at society level. The competition has improved the speed and coverage of cocoa purchasing from farm gate. Ghanaian farmers also enjoy credit facilities and other community improvement programmes from LBC's which wish to increase their market share in farmer societies. The flip side however is that, the privatization has resulted in some level of deterioration of quality of cocoa purchased and non-compliance of the "Akuafo Cheque" payment system, making farmers vulnerable to loss in revenue.