The move which is expected to be piloted at the coming cocoa season and fully rolled out subsequently will mean that no farmer would receive cash for any of the beans sold to COCOBOD.
According to Dr. Opoku, COCOBOD has received several reports about attacks on farmers leading to some losing huge capital and being thrown out of business as a result.
He told a gathering at a Cocoa Value Chain Investment Meeting that, the benefit of the electronic transaction is enormous and COCOBOD would rely on private partnership to execute.
“Let us assume we are doing 1 million tonnes of cocoa; the price of 1 million tonnes is about GH¢10.5 billion; with 80 percent of this we would have to issue cash to pay the farmers. We hear of so many criminal activities, armed robbery and others in the community.
Local buyers are suffering and, in some cases, lives are lost as a result, we are developing a system to change the mode of payment. We are going to electronically pay the farmers; we are moving into a system where the entire GH¢10.5 billion are going to be electronically transacted to the farmers. This would bring some new energy into mobile and other electronic transaction nationwide,” Dr. Opoku said.
Country Director of World Cocoa Foundation, Betty Annan and the Anglophone Africa Lead, Oswell Kahonde have made a strong case that, the earlier the nation goes digital with the payment of farmers the better for the sectors resilience.
According to them, the sector is critical for the nation’s economy as it employs 2 million people and contributes to 19 percent of all exports. For them, digital payments can help make the sector more efficient, transparent, and secure for companies and people alike.
They argue that with digital payments, instead of giving cash to purchasing clerks, Local Buying Companies (LBCs) can transfer money directly to farmers’ wallets the moment a purchasing clerk digitally records the receipt of their cocoa. This can reduce the LBC’s interest costs by 10 percent or more.
They believe this also offers the opportunity to track their money all the way to the farmer and cuts down the opportunities for theft or the misuse of funds. Also, the move towards digital payments can make it easier for local banks and microfinance institutions to lend to farmers by creating digital, analyzable records, they say.
Already, COCOBOD has encouraged LBCs to start paying their farmers digitally. Several LBCs have begun doing so, and as a result, have seen interest savings and fewer robberies.
The responsible digitization of payments across the agricultural sector is one of the key areas the government wants to focus on in its Cash-Lite Roadmap. This policy initiative calls on key public and private sector players to work together to accelerate the shift from cash to digital payments, including across the cocoa sector. Read Full Story