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Market Imperfections in Agricultural Markets and Adaptation to Climate Change: Evidence from Cocoa Crop in West Africa

Author

Listed:
  • Abraham Amoussouga Gero

    (National University of Agriculture)

  • Boris O. K. Lokonon

    (University of Parakou, Faculty of Economics and Management Science (FASEG), Department of Economics)

  • Aklesso Y. G. Egbendewe

    (University of Lomé, Faculty of Economics and Management Science (FASEG), Department of Economics)

Abstract

Cocoa producers in West Africa face market imperfections exacerbated by climate change, threatening world cocoa supply. This study assesses the effects of market power exertion in the domestic cocoa markets within the context of climatic change in West Africa. Specifically, two climate change Representative Concentration Pathways scenarios are analyzed (RCP 4.5 and RCP 8.5). Using time series econometrics and a regional bio-economic model, we estimate market power parameters and simulate climate scenarios up to the time horizon 2100. Findings reveal heightened market power exertion in Côte d’Ivoire (The world biggest producer). While climate change has marginal effects on land use, its effects on exports are significant and mixed. Notwithstanding these mixed effects, the results clearly indicate the dominance of negative effects of climate change on cocoa exports. In addition, market imperfections amplify the negative effects of climate change by reducing farmers’ incentives. Therefore, reducing size of market power on cocoa markets would improve global supply.

Suggested Citation

  • Abraham Amoussouga Gero & Boris O. K. Lokonon & Aklesso Y. G. Egbendewe, 2025. "Market Imperfections in Agricultural Markets and Adaptation to Climate Change: Evidence from Cocoa Crop in West Africa," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 23(4), pages 1191-1209, December.
    • Handle: RePEc:spr:jqecon:v:23:y:2025:i:4:d:10.1007_s40953-025-00456-8
    DOI: 10.1007/s40953-025-00456-8
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    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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