SP 2.3 - Ghana Chocolate

Question 1

What is the fair trade foundation that protects cocoa farmers in Ghana called?

Answer 1

Kuapa Kokoo

Question 2

Why is the commodity price of cocoa so volatile?

Answer 2

Cocoa is bought in futures markets – 6 months ahead to guarantee supply

Question 3

What organisation sets trade rules and what is its role?

Answer 3

WTO
Role: It provides a forum for settling trade disputes between governments
It has the power to levy fines when breaches of global trade agreements have occurred
It seeks to make trade between countries transparent

Question 4

When was the WTO set up?

Answer 4

The WTO was established in 1995 and was preceded by the General Agreement on Tariffs and Trade (GATT)

Question 5

What negative policy have the WTO imposed on Ghana farmers?

Answer 5

Ghana farmers are not able to export value added products or they face high import tariffs, whereas exporting unprocessed raw cocoa beans amounts to no import tariff.

Question 6

What are subsidies?

Answer 6

A sum of money granted by the state or a public body to help an industry or business keep the price of a commodity or service low.

Question 7

Is the Ghana government allowed to subsidise its farmers?

Answer 7

No, therefore, production costs for Ghana farmers are higher, and therefore exports are less competitive.

Question 8

What rank in the world in Ghana for cocoa production?

Answer 8

Second, following the Ivory Coast