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

Isaac Antwarko Obeng and Kofi Adu ()

MPRA Paper from University Library of Munich, Germany

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.

Keywords: cocoa; technical efficiency; production functions; stochastic frontier analysis (search for similar items in EconPapers)
JEL-codes: Q1 (search for similar items in EconPapers)
Date: 2016-02-23
New Economics Papers: this item is included in nep-agr and nep-eff
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