Cocoa Case Study

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Running head: Legal Implications

Export/Import – Ghana Cocoa Bean
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August 25, 2010
ITB305 International Business Environment
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Introduction
Cocoa beans are the seeds found in cocoa pods, which grow on small evergreen tree; each pod contains 20-50 seeds, or cocoa beans. Harvesting cocoa consists of cutting the ripe pods from trees, breaking them open and extracting the seeds from the pods. These seeds are then allowed to ferment for 6 or 7 days with two turnings before drying in the sun. Beans are then bagged and shipped. Ghana’s cocoa industry is regulated and controlled by The Ghana Cocoa Board, a government agency. The Board oversees all aspects of cocoa farming and production, including agricultural research and hybridization of seeds. The cocoa industry is so important that the Cocoa Board has its own cabinet-level post within the Ghanaian government. Ghana Cocoa Board

According to Ghana’s Ministry of Finance and Economic Planning, Cocoa is the country’s second foreign exchange earner and the lives of many farmers and their families depend on it. In recognition of the contribution of cocoa to the development of Ghana, the government established the Ghana Cocoa Board (COCOBOD), as the main government agency responsible for the development of the industry (“Ministry of finance,” 2010). The mission of the Board is to encourage and facilitate the production, processing and marketing of good quality cocoa, coffee and sheanut in all forms in the most efficient and cost effective manner, and maintain the best mutual industrial relation with its objectives (“Ghana cocoa board,” 2010). The Ghana Cocoa Board governs the “purchase, market and export cocoa produced in Ghana which is graded and sealed under the provisions of Cocoa Industry (Regulation) Consolidation Decree, 1968 (NLCD. 278) or any other enactment, as suitable for export, to secure the most favorable arrangements for the purchase, inspection, grading, sealing and certification, export and sale of cocoa, coffee and sheanuts,” (“Ghana cocoa board, export of cocoa regulations,” 2010). The responsibilities of the production, research, marketing, and quality control of cocoa falls on the COCOBOD and is broken down into two main sectors: Pre-harvest and Post-harvest. The functions of these sectors, as outlined in the Export of Cocoa Regulations include: Pre-harvest Sector: The Pre-harvest Sector functions which are performed by the Cocoa Research Institute of Ghana (CRIG), the Seed Production Unit (SPU) and the Cocoa Swollen Shoot Virus Disease Control Unit (CSSVDCU) deal with fundamental issue on actual cocoa production at the farm gate level. Post-Harvest Sector: The Post-harvest Sector functions are undertaken by the Quality Control Division (QCD) and the Cocoa Marketing Company (CMC) Limited. The Post-harvest activities of COCOBOD start with quality control measures of QCD which farmers must observe to facilitate the acceptance of their produce at the buying centres by the licensed buying companies engaged in internal marketing of cocoa at the time. Exporting

Ghana regulations regarding the export of cocoa beans are very strict, under S.4 (6) of the said PNDC Law 81, “no person shall market or export any cocoa unless it is cocoa which is the property of COCOBOD; or it is cocoa which has been graded and sealed” (by the board). Only Licensed Buying Companies (LBC) are qualified to market and export cocoa outside of Ghana. A government run, Export Sales Committee, advises the Board and producers on external market trends and prices, export quotas, and on the delivery and pricing of cocoa to local processors. The quality of Ghana’s cocoa beans is held to the highest of standards to meet both Ghanaian and international quality standards. The Quality Control Division (QCD) of COCOBOD is responsible for this oversight and enforcement. Specific measures outlined by...
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