President John Dramani Mahama has disclosed that government will introduce an automatic cocoa pricing mechanism that guarantees farmers 70 percent of the international market price at prevailing exchange rates.

Speaking at the Presidential Dialogue with the Private Sector in Accra on Monday, the president said the ongoing crisis in the cocoa sector demands urgent reforms across the entire value chain.

“Reforms will include, amongst others, domestic funding for cocoa purchasing, expanded involvement of local licensed buying companies, including the revamp of the Produce Buying Company, expansion of value addition and processing of cocoa and other tree crops locally, and an automatic price mechanism that pays the farmer 70 percent of the international market price at prevailing exchange rates,” he stated.

Under the proposed system, producer prices will no longer rely solely on periodic administrative adjustments that often lag behind global price movements. Instead, farmers will automatically receive 70 percent of the prevailing world market price, ensuring greater transparency and responsiveness to international trends.

President Mahama explained that government will shift to domestic funding for cocoa purchasing, reducing dependence on external financing arrangements that have proven unsustainable. Licensed buying companies will also see expanded participation in cocoa purchasing operations, while the state-owned Produce Buying Company will be revamped to strengthen its competitiveness.

The reforms will further include a drastic reduction in expenditure and elimination of waste at the Ghana Cocoa Board (COCOBOD), aimed at improving financial sustainability within the sector.

In addition, the Cocoa Processing Company will be retooled to enhance its capacity to process more cocoa beans locally, supporting government’s broader value addition agenda.

The president noted that volatility in global cocoa prices recently forced government to take emergency measures, including a downward review of the domestic producer price to reflect market realities — a move he described as painful but necessary.

He stressed that Ghana must move beyond exporting raw commodities and instead focus on value addition, a principle he said applies equally to agriculture and the extractive industries.

The reforms come at a time when the cocoa sector is grappling with declining production, financial pressures at COCOBOD, and continued fluctuations in international market prices.