Cheque-less policy likely to restrict multi-million kina cocoa trade in East Sepik Province

The central bank's announcement that it will cease the use of commercial bank cheques by December 22 is a huge concern for the Governor of East Sepik Province.

Allan Bird fears the six-year-old cocoa project in his province, which he says has generated millions and seen huge benefits trickling down to ordinary villagers, could potentially become restricted.

Cocoa beans are bought from farmers through a bank cheque transaction. Farmers without bank accounts are forced to trade their cheques for a cash refund with supermarkets, who deduct a certain percentage as their cut. The supermarkets then bank the cheques.

If the central bank restricts these cheques, this would mean commercial banks in East Sepik would have to carry more cash, as would cocoa buyers.

Mr Bird wants Prime Minister James Marape to explain why the central bank is moving to stop cheques being used by businesses and farmers.

"The minute the central bank stops cheques being paid, these businesses [supermarkets] will have to get cash in large quantities," he said.

East Sepik Province has embarked on a massive cocoa program, with just over 100,000 people involved.

Mr Marape says the Treasury will be instructed to hold further talks with the central bank.