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

Abraham Amoussouga Gero (), Boris O. K. Lokonon () and Aklesso Y. G. Egbendewe ()
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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

Journal of Quantitative Economics, 2025, vol. 23, issue 4, No 9, 1209 pages

Abstract: 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.

Keywords: Climate change; Cocoa exports; Partial equilibrium; Market power (search for similar items in EconPapers)
JEL-codes: Q15 Q17 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s40953-025-00456-8

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