Determinants of cocoa production in the Ashanti region

Abstract

The economic benefits of cocoa in Ghana include foreign exchange, employment and provision of raw materials for both domestic and international industries. For these reasons, there has been a government intervention in the cocoa industry that brought forth   policies including increased producer price and also cocoa pest and disease control programme (CODAPEC) to stimulate cocoa production. However, studies investigating factors influencing cocoa production in Ghana are very scarce. This study obtained Ordinary Least Squares (OLS) estimates from a Cobb-Douglas production function using cross section data obtained from 251 farmers. The respondents were selected using Random sampling technique. Questionnaires were administered to respondents and the items comprised farmers’ production years, farm size, family labour, hired labour, farm age, bags of fertilizer, Number of times of mass spraying and total Revenue. The dependent variable was output. The Log-Linear regression results showed an adjusted co-efficient of determination of 0.972. It was found that the total revenue and hired labour variables had significant influence on cocoa production. Both variables were significant at 1%. The number of times of mass spraying and farm size variables were statistically insignificant. This study could have important policy implication for government to increase producer price of cocoa.