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Type Working Paper - The Centre for the Study of African Economies Working Paper Series
Title Production changes in ghana cocoa farming households under market reforms
Issue 216
Publication (Day/Month/Year) 2004
URL http://economics.ouls.ox.ac.uk/13254/
The Ghana cocoa market has been extensively liberalised over the period since the mid 1980s.Three issues have been prominent in microeconomic research on the eects of liberalisation on agriculture. The rst has been the size of any supply response, the second has been the eect on producers of reduced subsidies on inputs, and the third whether innovation has occurred. In this paper we investigate these issues by estimating a production function for cocoa in Ghana drawing on two household surveys covering the period from 1991 to 1998. The estimated production function allows identifying the factors underlying the change in output. The analysis of the micro data shows that the increase in household output has been very modest at 6 per cent. While the effect of liberalisation has been to raise the price of inputs we nd that the contribution of such inputs to cocoa production has increased both relative to land and, very substantially, relative to labour. The ratio of both land and nonlabour inputs to labour rose implying a rise in labour productivity of 39 while land productivity was unchanged. We nd no evidence that reforms have led to innovation in techniques which raise total factor productivity. Possible reasons for these outcomes are suggested.

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