The electronic cash payment platform to be introduced in August, this year, for licensed cocoa buyers and sellers as a move to improve the effectiveness and efficiency in internal marketing of Ghana?s leading cash crop, has been welcomed among industry players as a laudable idea.
An initiative of the Progressive Licenced Cocoa Buyers Association (PLCBA), the platform, would among other benefits, ensure equity in the industry and reduce risks such as theft and robbery attacks associated with the old system.
The PLCBA is an association comprising 14 licensed cocoa buying companies which was established in May, 2014.
Under the new system, money sourced from the financial institutions will be used to operate such that the district officers and purchasing clerks will not handle cash. This is to prevent, as best as possible, the loss of cash in the field. An electronic system will be put in place such that money will be transferred onto the system. Purchasing clerks will now be given an allocation which will be sent to their wallet to pay farmers electronically when they purchase.
Farmers will go to a redeeming point to take their money, while their bonuses will also go directly into their wallet as and when the Ghana Cocoa Board (COCOBOD) makes payment.
District officers will monitor the purchases made by their purchasing clerks and ensure that all purchases are sent to the district depots for final preparation to the port. Final preparations will include inspection/grading and sealing by the Quality Control Division of the COCOBOD.
The innovation, according to stakeholders, would improve the efficiency and effectiveness in the industry as well as reduce the high risk involved in the district purchasing system.
In their view, the system is an innovation which would eliminate unnecessary litigation and also curb the perennial losses incurred in the system due to corruption, theft and mishandling of seed funds.
The COCOBOD has also envisaged more advantages in the new system and has gone further to request that operational modalities currently being used by the board be implemented in the system.
The privatisation of internal marketing of cocoa dates back to the early 1990s. This was done to inject more efficiency into the purchasing and evacuation of cocoa produce through competition by the formation of licensed buying companies (LBCs). Currently, there are about 40 LBCs operating in the country with those active between 15 and 20.
The COCOBOD secures syndicated loans and gives out to these LBCs at a rate to purchase cocoa. Before the loans (seed funds) are advanced, each buying company will have to submit bank guarantee from insurance and investment firms until the new administration limited it to guarantees from commercial bank. This really affected most LBCs and rendered them inactive.
Most LBCs operate the district/society system where monies are moved into the accounts of the company at the district level. District officers then withdraw and physically advance these huge sums to purchasing clerks at the societies to purchase the cocoa beans from the farmers. At the District Depot, the district officer prepares the cocoa beans for inspection by the Quality Control Division of the COCOBOD. The Quality Control Division inspects the beans to ensure that they are thoroughly dried and of quality. Once the beans are certified by the Quality Control Division, they are evacuated to the Port.