Analysis of economic efficiency in cocoa production in Ghana

Abstract

4508 ABSTRACTThe main purpose of this study was to analyze the economic efficiency of resource utilization in cocoa production of the cocoa farmers in Ghana to provide information for effective application and management of farm inputs on cocoa farms and policy recommendation. A random sample of 300 farmers in the Eastern, Ashanti, BrongAhafo, Central, Volta and Western regions of Ghana were selected, using the multistage sampling approach. Individual farmers were interviewed by using questionnaires. Descriptive and inferential analyses of the survey data were performed. Regression analysis was employed to estimate the Cobb-Douglas production function from the farm data for the measurement of technical efficiency of the cocoa farmers. The estimated elasticity from the production function and prices of input and output were subsequently used to calculate the measures of allotment efficiency of resource use by the farmers. The coefficients for household size, cocoa farm size, quantity of insecticides, quantity of fungicides, and quantity of fertilizer were 0.261, 0.514, 0.273, 0.090 and 0.325, respectively. The quantity of fertilizer applied to the cocoa farm had the highest marginal physical product (133.11 kg/ bag), and that of quantity of fungicides variable (1.39 kg/satchet) was lowest. Household size, farm size, insecticides, fungicides and fertilizer were found to have statistically significant impact on cocoa output. The sum of elasticities of the factors included in the Cobb-Douglas production function was 1.463, which was more than one, implying that the cocoa farmers were operating in the increasing returns to scale. There were incidences of inefficiencies in the management of resources in cocoa cultivation by cocoa farmers since some resources were underutilized and others over-utilized. Farmers are advised to increase the use of household members, insecticides, fungicides and fertilizer while reducing the use of forest land through increased land productivity instead of land expansion to ensure efficient use of resource in cocoa production. However, the environmental impacts of these farm activities should be assessed to ensure sustainable cocoa production.

The Economic Analysis of Resource Used Efficiency for Cocoa Production in Cameroon: The Case Study of Lekie Division

“…These researchers had shown that the increase in pesticide quantities in cocoa fields in the Offinso district of Ghana had a positive effect on cocoa production. In addition, a study conducted in Ghana by Aneani and al., [22] revealed similar results that cocoa farm size, quantity of insecticides and quantity of fungicides were 0.514, 0.273 and 0.090 respectively.…”

Determinants of Technical Efficiency among Smallholder Cocoa Farmers in Malaysia

“…In other related work by Aneani et al (2011), they found that age of farmers greatly influence cocoa output in Ghana. The authors recommend greater involvement of young households in farming activities to help increase cocoa output.…”

Profit efficiency of dairy farmers in Kenya: An application to smallholder farmers in Rift Valley and Central Province

“…The inefficiency effect model can only be estimated if the efficiency effects are present. Given that is present in the model it implies that it is justifiable to employ the SFA as similarly argued by Aneani et al (2011). In this study, Battesse and Coelli (1995) and Coelli (1996) models were used to specify the stochastic frontier function with behavior inefficiency components and used to estimate all parameters together in one step maximum likelihood estimation.…”