On the ongoing cocoa boom and what it tells us about the current state (and future) of African agriculture

Long relegated to the back burner, African agriculture — a sector that is critical for poverty reduction — is experiencing steady productivity decline and loss of labor. This must be reversed.

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I: We are in the middle of the biggest rise in cocoa prices ever. However, most West African farmers are only getting a fraction of the windfall and likely won’t be able to increase supply before prices fall.

Not all cocoa farmers are created equal. Due to the recent spike in global cocoa prices, farmgate prices in Cameroon and Nigeria (over $8000 per ton) are more than three times higher than in Côte d’Ivoire and Ghana (under $2400). The reason is straightforward: Ghanaian and Ivorian authorities set cocoa prices — a decades-long policy that’s designed to tax farmers, stabilize supply/prices, provide extension services, and enable farmers to plan ahead.

Differences in farmgate prices. Source: Bloomberg

Cocoa is a major crop in Côte d’Ivoire (top export) and Ghana (3rd biggest export). Combined, the two countries produce about 60% of glob…