Markets Insider
By Jo Nova
Price fixing kills the cocoa farm
There has been a wicked price spike in cocoa beans which the usual suspects are blaming on “climate change” as if your air conditioner was ruining cocoa crops in West Africa. Instead African governments have fixed the price of cocoa for decades, forcing poor farmers to work for a pittance, and keeping the big profits for themselves. Not surprisingly, even though there is a wild price spike, farmers in Ghana are leaving the industry, smuggling crops out (because they get a better price). They didn’t plant new trees, they ran out of money for fertilizer, and didn’t try new varieties. Their children don’t want to farm cocoa, and the yields are falling on old sickly plantations.
So, surprise, socialist government controls wrecked the industry and they are now scrambling to put the pieces back together. Things are so desperate, the government of Ghana raised the price of cocoa by 58% last April and then raised the price of cocoa by another 45% last September, to try to reduce the smuggling. (The government was losing too much money). At one point last year it was […]
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