IDEAS home Printed from https://ideas.repec.org/p/ags/iaae09/51660.html
   My bibliography  Save this paper

What Does Liberalization without Price Competition Achieve? The Case of Cocoa in Ghana

Author

Listed:
  • Vigneri, Marcella
  • Santos, Paulo

Abstract

The deregulation of Ghana’s domestic cocoa supply chain that took place in the early 1990s was expected to bring competition among different private buyers and to generate a number of production incentives to the farmers. Most notably, it was expected that competition would emerge by means of price bonuses and/or premiums over the guaranteed price. However, this paper finds that price based competition mechanisms did not develop in the resulting domestic cocoa value chain. Rather, the now increasing numbers of Licensed Buying Companies compete for cocoa supplies based on the provision of different services to farmers. The availability of a number of outlets offers farmers the option to choose among those that can provide cash as well as credit. The cash payment and credit for inputs offered to attract cocoa sales mainly benefit liquidity-constrained farmers, enabling them to invest in productive inputs. Since cash constrained farmers are likely to be the poorest as measured by simple welfare indicators, liberalization may be seen to have had a progressive impact on Ghana’s cocoa farmers.

Suggested Citation

  • Vigneri, Marcella & Santos, Paulo, 2009. "What Does Liberalization without Price Competition Achieve? The Case of Cocoa in Ghana," 2009 Conference, August 16-22, 2009, Beijing, China 51660, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae09:51660
    as

    Download full text from publisher

    File URL: http://purl.umn.edu/51660
    Download Restriction: no

    References listed on IDEAS

    as
    1. Besley, Timothy, 1995. "Property Rights and Investment Incentives: Theory and Evidence from Ghana," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 903-937, October.
    Full references (including those not matched with items on IDEAS)

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iaae09:51660. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/iaaeeea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.