There are promises made out of generosity, others out of naivety, and a few out of pure denial of economic reality. Read more: ghana protects farmers Read more: ghana subsidizes illusion The declaration by Dr. Samuel Ofosu-Ampofo, chairman of the Ghana Cocoa Board, clearly falls into this last category. On Tuesday, this man looked his fellow citizens in the eye and swore there would be "no further reduction in cocoa purchase prices," despite an international price collapse that would make a Wall Street trader weep.

The numbers are merciless: cocoa is now trading below $3,000 per metric ton, a 40% drop since the beginning of the year and — brace yourself — 75% down from 2024 records. To put this in perspective, it's like your salary dropping from $100,000 to $25,000 in two years, and your boss promising to maintain your standard of living. Sweet, but slightly disconnected from reality.

The Stubborn Arithmetic of Markets

The problem with political promises is they often collide with that annoying thing called reality. Ghana, Africa's top cocoa producer and second globally, derives a substantial portion of its export revenue from this golden bean. When international prices collapse, the state can indeed choose to subsidize its producers to maintain local prices. It's generous, it's popular, and it's financially suicidal if the trend persists.

Let's look at how other countries handle this kind of crisis. The United States, with its hyper-subsidized agriculture, at least has the honesty to budget its agricultural support over several years and adjust prices according to market realities. France, within its European CAP, practices a guaranteed price system but with automatic adjustment mechanisms. Even China, hardly renowned for economic transparency, regularly adjusts its agricultural support prices according to global markets.

Ghana promises the impossible: completely decoupling its domestic prices from international realities. It's like promising to maintain gasoline prices at $1 per liter when oil is soaring to $200 per barrel. Technically possible, financially catastrophic.

The Generosity That Ruins

According to GhanaWeb, this assurance comes "as the situation is critical for cocoa producers who depend on stable prices for their livelihood." Nobody disputes the legitimacy of this concern. Ghana's small producers, who represent the bulk of national production, indeed deserve some income stability. But promising this stability while completely ignoring market signals is building a house of cards with public money.

Because let's be clear: who's going to pay the difference between the current $3,000 and the "protected" price promised to producers? The Ghanaian taxpayer, obviously. And when state coffers are empty? International lenders, probably, with the conditionalities we can imagine.

The irony is that this "protective" policy risks creating exactly the opposite of its intended effect. By artificially maintaining prices disconnected from the market, Ghana encourages its producers to maintain, even increase, their production at the very moment when the world needs less of it. Predictable result: even more downward pressure on international prices, and a subsidy bill that explodes.

The Alternative That Disturbs

Yet there are less spectacular but more sustainable solutions. Canada, with its agricultural marketing boards, has practiced for decades a price smoothing system that protects producers from extreme variations while staying connected to market realities. Prices are adjusted gradually, with temporary compensation mechanisms funded by stabilization funds fed during good years.

Côte d'Ivoire, Ghana's main competitor in cocoa, has actually adopted a more pragmatic approach: it adjusts its support prices based on international markets, while maintaining targeted social programs for the most vulnerable producers. Less politically spectacular, but more economically sustainable.

The Promise That Costs Dearly

Dr. Ofosu-Ampofo may have thought he was pleasing his fellow citizens by promising them the impossible. But impossible economic promises have an unfortunate tendency to backfire on those who make them. Ask the Argentinians, Venezuelans, or anyone who believed you could sustainably ignore market laws by political decree.

The most tragic part is that this promise risks delaying necessary adjustments. Instead of helping its producers diversify their crops, improve their productivity, or develop local processing circuits that add value, Ghana maintains them in artificial dependence on a guaranteed price that won't be guaranteed much longer.

Verdict: 2/10 for generous intentions, 0/10 for economic viability. When politics promises what arithmetic forbids, arithmetic always wins.