Who Benefits from KOA’s Transparency System? The Cocoa Farmer, KOA or KOA’s collaborators
The Assessment of KOA’s Transparency system continuous
Continued from Part 1
The other issue revealed is how Koa gains and the farmer loses out on the currency depreciation:
As noted in Graph 1, The Ghana Cedi depreciated/US$ appreciated by 55%. This means the income earned by farmers from Koa lost 55% of its value in just a year. On the other hand, Koa’s sales revenue in US$ gained 55% in value against the Ghana Cedi. This means Koa need less US$ to purchase more Cocoa pulp from Ghanaian Cocoa farmers in Ghana Cedi. So, for example, Koa used US$43,889 to buy GH¢254,556.2 worth of Cocoa Pulp in the 2021/22 crop year. In the 2022/23 crop year, Koa can use the same US$43,889 to purchase GH¢395,001 worth of Cocoa Pulp. If the farmers want to import any product or pay their children's fees at Harvard in US Dollars, they will need to search for more Ghana Cedis to buy a few dollars to pay these fees. This demonstrates how Koa’s decision not to pay farmers in the same currency they sell their final product can lead to farmers losing and Koa gaining on the currency exchange rate front. This is the main reason I advised Koa to price the cocoa pulp in US$ so that at different points when they purchase it from farmers, the farmers can benefit from the US$ appreciation to offset the ever-growing inflation rates in Ghana. This will ensure that farmers retain a higher value for their income and increase their purchasing power even during the inflationary period. Between the 2021/22 and 2022/23 crop years, the Gh¢ depreciated by 55%.
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