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Production Changes In Ghana Cocoa Farming Households Under Market Reforms

  • Francis Teal

    (Centre for the Study of African Economies)

  • Marcella Vigneri

    (Centre for the Study of African Economies)

The Ghana cocoa market has been extensively liberalised over the period since the mid 1980s. Three issues have been prominent in microeconomic research on the effects of liberalisation on agriculture. The first has been the size of any supply response, the second has been the effect on producers of reduced subsidies on inputs, and the third whether innovation has occurred. In this paper we investigate these issues by estimating a production function for cocoa in Ghana drawing on two household surveys covering the period from 1991 to 1998. The estimated production function allows identifying the factors underlying the change in output. The analysis of the micro data shows that the increase in household output has been very modest at 6 per cent. While the effect of liberalisation has been to raise the price of inputs we find that the contribution of such inputs to cocoa production has increased both relative to land and, very substantially, relative to labour. The ratio of both land and nonlabour inputs to labour rose implying a rise in labour productivity of 39 while land productivity was unchanged. We find no evidence that reforms have led to innovation in techniques which raise total factor productivity. Possible reasons for these outcomes are suggested.

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File URL: http://econwpa.repec.org/eps/dev/papers/0409/0409062.pdf
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Paper provided by EconWPA in its series Development and Comp Systems with number 0409062.

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Length: 27 pages
Date of creation: 28 Sep 2004
Date of revision:
Handle: RePEc:wpa:wuwpdc:0409062
Note: Type of Document - pdf; pages: 27
Contact details of provider: Web page: http://econwpa.repec.org

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  1. John Dreze & Peter Lanjouw & Nicholas Stern, 1992. "Economic Mobility and Agricultural Labour in Rural India: A Case Study," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 27, pages 25-54.
  2. Newey, Whitney K & Powell, James L & Walker, James R, 1990. "Semiparametric Estimation of Selection Models: Some Empirical Results," American Economic Review, American Economic Association, vol. 80(2), pages 324-28, May.
  3. Barrett, Christopher B., 1996. "On price risk and the inverse farm size-productivity relationship," Journal of Development Economics, Elsevier, vol. 51(2), pages 193-215, December.
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