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Technical efficiency in Ghana's cocoa production: evidence from Twifo Hemang Lower Denkyira Area

Author

Listed:
  • Obeng, Isaac Antwarko
  • Adu, Kofi Osei

Abstract

This study examined the production efficiency of cocoa farmers in Twifo Hemang Lower Denkyira area composed of two districts namely Twifo Ati Mokwa district and Hemang Lower Denkyira districts in the central region of Ghana using farm level data. Results presented were based on data collected from multi-stage sampling of 326 cocoa farmers in twenty (20) communities using standardized structured questionnaires. The productivity and technical efficiency in cocoa production were estimated through stochastic frontier production function analysis using the Frontier 4.1 software. Empirical results showed that cocoa farms in the study area exhibited increasing returns-to-scale (RTS=1.2109), indicating reducing average costs (AC) of production. This implies that cocoa farmers were operating in the irrational zone of production (stage I), an indication of inefficiency in production. The technical efficiency indexes of farmers varied from 0.116 (11.6%) to 0.9998 (99.98%), with mean of 0.54 (54%). The main factors that significantly affected technical efficiency in cocoa production were found to be estimated number of hybrid plant, level of education and age of tree. Among others, the study recommended that the Cocoa Rehabilitation Unit of the Cocobod should help farmers to rejuvenate and or re-plant the aged cocoa farms with hybrid varieties improve resource use efficiency in cocoa production in cocoa production.

Suggested Citation

  • Obeng, Isaac Antwarko & Adu, Kofi Osei, 2016. "Technical efficiency in Ghana's cocoa production: evidence from Twifo Hemang Lower Denkyira Area," MPRA Paper 69679, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:69679
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    File URL: https://mpra.ub.uni-muenchen.de/69679/1/MPRA_paper_69679.pdf
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    References listed on IDEAS

    as
    1. Som P. Pudasaini, 1983. "The Effects of Education in Agriculture: Evidence from Nepal," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(3), pages 509-515.
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    3. Lau, Lawrence J & Yotopoulos, Pan A, 1971. "A Test for Relative Efficiency and Application to Indian Agriculture," American Economic Review, American Economic Association, vol. 61(1), pages 94-109, March.
    4. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
    5. Sekhon, M.K. & Mahal, Amrit Kaur & Kaur, Manjeet & Sidhu, M.S., 2010. "Technical Efficiency in Crop Production: A Region-wise Analysis," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 23(2), July.
    6. Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-286, July.
    7. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    8. Joachim Nyemeck BINAM & Jim GOCKOWSKI & Guy Blaise NKAMLEU, 2008. "Technical Efficiency And Productivity Potential Of Cocoa Farmers In West African Countries," The Developing Economies, Institute of Developing Economies, vol. 46(3), pages 242-263, September.
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    More about this item

    Keywords

    cocoa; technical efficiency; production functions; stochastic frontier analysis;

    JEL classification:

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

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