An evaluation of agricultural programme in the cocoa industry: a comparative study of the Ashanti and Suhum cocoa projects

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Cocoa is an important crop to the Ghanaian economy and it has been the country’s main foreign exchange earner for several decades. The annual output has traced a downward trend since the 1970s. There have been attempts by successive governments to reverse this situation. One such attempt was the establishment of two pilot projects in the Eastern and Ashanti Regions to serve as vehicles for increasing cocoa output in the industry. o far, the economic and financial ‘viabiii1 and effectiveness of these projects has not been evaluated to assess their impact on the cocoa industry and the economy as a whole. The objective of this study is to evaluate the suhum and Ashanti Cocoa Projects and to assess their impact on the production of cocoa, employment and farmers’ income. Data for the study were collected from field surveys and secondary sources. A sample of 140 farmers was interviewed and of this 100 were project participants and 40 non-project participants. Quantitative and qualitative tools and techniques were used for the analysis of data collected. Quantitative tools like time series and gini-coefficient ratio were used for projecting the cocoa output of the two projects to know their future output trend for comparative purposes; and to measure inequalities in the distribution of wealth and income respectively. The social cost—benefit technique was also used to assess the financial impact and the economic ability of the two projects. The analyses indicated that the projects’ impact on cocoa production has been limited. Even though the rehabilitation component increased, average yield per acre by 31kg over and above the yields in non-project areas, the replanting components would have achieved higher yields if it had the same age of planting as that of the cocoa trees in the non-project areas. The projects increased the income of project participants, and the distribution of income as indicated by the gini-coefficient was less pronounced in the project areas. In terms of employment, the two projects employed between 2000 and 4000 people each and induced farmers’ to increase their acreages cultivated. The financial and economic analysis indicated the viability of the projects. The Net Present Values (NPV’s) were greater than zero at the opportunity cost of capital of 8 percent. The Internal Rate of Returns (IRR’s) were also greater than 45 percent. The implications of these high discounted measures are that the two projects are and would be expected to contribute significantly to the national income. The study revealed that lack of active farmer participation in the projects constituted a major setback to the achievement of the stated measures. In the light of the foregoing, it was recommended that farmers be included in the design of such projects, and that cocoa sector plans should be coordinated as veil as plans of the various sectors of the economy. In addition to these the producer price incentive would appear to be extremely crucial and would go a long way to rectify the situation.
A thesis submitted to the School of Graduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi, in partial fulfilment of the requirements for the award of the Degree of Master of Science in Regional Planning, 1986