Mr. Creech Jonesasked the Secretary of State for the Colonies why, in purchasing the entire cocoa crop, 1939–40, of the Gold Coast, His Majesty's Government fixed the price at a figure equivalent to £16 16s. per ton at Accra, which is below the cost of production; why, since this price was fixed and agreed to by the Gold Coast farmers, the export duty on cocoa has been raised by the Gold Coast Government by 18s. 8d. to 42s. per ton; and what he proposes to do so that these measures will not inflict serious loss on the Gold Coast farmers and tend to impoverish the Gold Coast Colony?
Mr. M. MacDonaldI will answer the last part of the hon. Member's Question first. The purpose of the arrangements made at the beginning of the war for the purchase by His Majesty's Government of the entire British West African cocoa crop for the season 1939–40, was precisely to ensure that serious loss was not inflicted on the cocoa farmers with the consequent impoverishment of the Gold Coast and, to a lesser degree, Nigeria.
1578WBefore the war, Germany was an important market for cocoa, her annual consumption representing about 15 per cent. of total world consumption. The effect of the loss of the German market and of the dislocation of other markets in Central Europe, together with the difficulties of finding shipping space in war-time for a relatively unessential commodity like cocoa, would beyond doubt have been to drive the price of cocoa in West Africa down to a very low level, while at the same time a very considerable proportion of the crop would have been left un-bought in growers' hands. In the war of 1914–18, the price of cocoa in West Africa fell as low as £4 a ton.
In guaranteeing to purchase the whole crop, at a port price fixed in advance for the season, His Majesty's Government had not only to take account of probable subsequent rises in freight and other carrying costs, but had also to envisage the possibility of being compelled to hold a considerable unsold surplus of cocoa beyond the end of the present crop year. In spite of the probable heavy loss involved, His Majesty's Government, recognising the importance of maintaining to West African growers a steady return on cocoa sales and of allowing some margin to cover increased costs of imported goods, fixed their buying price at roughly £2 per ton above the average port price obtained throughout the whole of the last main-crop season. In addition, an undertaking was given that, in the unlikely event of a net profit being made in disposing of the crop, His Majesty's Government would share this profit with the West African Governments concerned.
It is impossible, in view of the peculiar conditions in West Africa, to determine, as the hon. Member suggests can be done in the first part of his Question, even the approximate cost of production of cocoa, but it is generally accepted that a price of £16 16s. per ton at Gold Coast ports is a very fair price for growers, particularly when it is guaranteed for the whole main-crop season. I consider that His Majesty's Government have acted most generously in this matter and that the arrangements will confer considerable benefits on West African cocoa farmers. The Governors have assured me that this is appreciated in West Africa, and I have 1579W had no reports of any general dissatisfaction at the price at which cocoa is being bought.
As regards the second part of the Question, the Governor of the Gold Coast explained, in a statement made in December last on the cocoa purchase scheme, the 1580W reasons for which he considered it necessary to impose, as a war measure, a surcharge of 18s. 8d. per ton upon the cocoa export duty. I am having placed in the Library of the House a copy of the Governor's statement, together with a copy of the statement on the scheme made by the Governor of Nigeria.