Mr Speaker, thank you very much.
The justification for this request for approval has been variously started by both the Hon Chairman of the Finance Committee and the Hon Deputy Minister for Finance. However, going into that -- m and we are told that for the 2012 and 2013 cocoa season as well as the 2013 and 2014 cocoa season, the price of cocoa reduced from US$2,500.00 per tonne to US$2,130.00 per tonne in the 2012 and 2013 cocoa season. Then it increased to US$2,300.00 in the 2013 and 2014 cocoa season. This is one of the justifications provided by both the Committee and echoed by the Minister for Finance.
Mr Speaker, it is important to register the point that, this cannot be a justification. This is because, in 2011, the exchange rate of the Ghana cedi to the United States dollar was GH¢1.55 to US$1.00. In 2012, the Ghana cedi depreciated and so, it came to GH¢1.88 to US$1.00. That alone ought to have been a mitigating factor. So, for him to tell us that because the producer price came down, we are paying remunerating prices. It was a justification. That is an outrageous justification.
Mr Speaker, in the 2013, the Ghana cedi further depreciated to GH¢2.20 from the GH¢1.55. He knows. Yet they decided to maintain the same price, using that as a justification. He is beating his chest on that. Clearly, that is not justifiable. It rather amounts to cheating the farmers.
Mr Speaker, on the other reason that they assigned, that they had to pay for the cost of chemicals, before 2011, the fertilisers were sold to the farmers. Government thereafter decided that they
wanted to supply this free of charge to the farmers. What is happening now is that, after the introduction of that policy, farmers no longer have access to the fertilisers and chemicals, and they give them to them in tots.
When the President went to the Western Region, the farmers complained to him that they were not getting the chemicals, yet they loaded the Free On Board (FOB) price with these chemicals and fertilisers. The Hon Minister has indicated that he does not.
Mr Speaker, it is one of the reasons production is coming down. They do not give them the fertilisers and chemicals. The Hon Minister is pretending that they give it to them, and they charge them for that. Meanwhile, the spraying gangs are paid when the chemicals are not going to them. What kind of management is that? This explains why production is decreasing from 1 million tonnes we achieved in 2010 and 2011. Increasingly, it is decreasing. It is because of bad policies.
We must own up to this.
Mr Speaker, nobody is happy that these things are happening. As far as some of us are concerned, agriculture remains the backbone of this country, regardless of the fact that we have discovered oil. So, we should be very sensitive to these matters.
Mr Speaker, it was targeted to produce 920,000 metric tonnes as we have been told. They ended up producing about 850,000 tonnes. They contracted a loan to purchase 920,000; they were not able to do that and we have already told them about the depreciation of the cedi. How did we have these difficulties? We cannot
understand and that is what the Hon Member for Atwima-Nwabiagya South alluded to. We must watch these things, otherwise, there would continue to be a slide in production of cocoa and it will not help the country.
Mr Speaker, the other matter relates to the agglomeration of these expenditures. The Hon Deputy Minority Leader alluded to that. What does it mean? In times past, when COCOBOD was doing the cocoa roads, they used their margin to do the construction. Today, they set aside a portion of the loan that they contract to do the cocoa roads. When Government itself contracts loans to construct roads, loans it does not pay over a period of one year. It pays over a period of sometimes 10 to 15 years.
Mr Speaker, what COCOBOD is doing by setting aside a portion of the loan that they contract to construct cocoa roads is that, within one year, they must pay back. It does not make economic sense and the Hon Minister for Finance knows that. It does not make economic sense when they contract a loan, take a portion of it to construct roads and pay for it that same year. What are we doing to ourselves? That explains the difficulty that we have in the industry.
Mr Speaker, these are matters that nobody would agree to because we are harming the cocoa farmers. This is because when we have to pay for this and we are in a difficulty, ultimately, it gets back to them and we take from the amounts that otherwise, should be going to the cocoa farmers. This is the point that we are making.
Mr Speaker, now, I am looking at the loan amount. It is US$300 million and the total indebtedness that it is supposed to cover is GH¢1,354,807,594. We are contracting a loan of US$300 million to