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Incentives Embedded in Institutions: The Case of Share Contracts in Ghanaian Cocoa Production

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  • Takane, Tsutomu

Abstract

Providing price incentives to farmers is usually considered essential for agricultural development. Although such incentives are important, regarding price as the sole explanatory factor is far from satisfactory in understanding the complex realities of agricultural production in Africa. By analyzing the share contracts widely practiced in Ghana, this article argues that local institutions such as land tenure systems and agrarian contracts provide strong incentives and disincentives for agricultural production. Based on data derived from fieldwork in the 1990s, the study analyzes two types of share contracts and the incentive structures embedded in them. The analysis reveals that farmers' investment behavior needs to be understood in terms of both short-term incentive to increase yield and long-term incentive to strengthen land rights. The study concludes that the role of price incentives in agricultural production needs to be reconsidered by placing it in wider incentive structures embedded in local institutions.

Suggested Citation

  • Takane, Tsutomu, 2000. "Incentives Embedded in Institutions: The Case of Share Contracts in Ghanaian Cocoa Production," The Developing Economies, Institute of Developing Economies, Japan External Trade Organization(JETRO), vol. 38(3), pages 374-397, September.
  • Handle: RePEc:jet:deveco:v:38:y:2000:i:3:p:374-397
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    References listed on IDEAS

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    More about this item

    Keywords

    Cacao; Rural societies; Farm management; Ghana; カカオ; 農村; 農業経営; ガーナ;

    JEL classification:

    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture

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