Technical Efficiency of Cocoa Production in Ghana: A Case Study of Upper Denkyira East Municipality

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Cocoa is an essential crop and plays a critical role for Ghana and the world at large. However, low productivity has been a challenge and as a result efforts by Government and stakeholders have been designed to improve production. However, Ghana still has the lowest average per yield compared with international levels. This study therefore attempts to measure the technical efficiency levels of cocoa farmers and examine the factors that influence the variations in technical efficiency. A multi-stage sampling technique is used to obtain a cross sectional data on 220 respondents. The stochastic frontier model is adopted for the study. The results reveal that the mean technical efficiency of cocoa farmers in the study area is 72%. Analysis of the determinants of technical efficiency indicate that, gender, labour type 1(family), labour type 2(hired) are positively related to technical inefficiency of cocoa farmers. Age of farm, education, credit, extension contact, association, farm size, marital status, fertilizer use and experience of farmer are negatively related to the technical inefficiency of farmers. However, labour type 1(family), association, farm size, fertilizer use and experience of farmers are statistically significant at 10%, 5%, 10%, 5% and 5% respectively. In conclusion, the study recommends policy makers as well as stakeholders to adopt measures to increase production and technical efficiency by focusing on proper management skills on their farms to reduce loss of resources. Secondly, farmers are encouraged to form help groups (associations) to assistant themselves. Also, credit accessibility should be improved and encouraged to support farmers in need. Finally, extension services must be adequately facilitated to assist farmers be more efficient and productive.
A Thesis submitted to the School of Graduate Studies in partial fulfillment of the requirement for the award of Master of Philosophy in Economics,