Cost efficiency of cocoa farmers in Twifo Hemang Lower Denkyira Area in Central Region of Ghana

Obeng, Isaac Antwarko and Adu, Kofi Osei (2014): Cost efficiency of cocoa farmers in Twifo Hemang Lower Denkyira Area in Central Region of Ghana.

Abstract

This study empirically examined cost efficiency of cocoa production in Twifo Hemang Lower Denkyira area in Central region of Ghana. Primary data was collected from 400 cocoa farmers in twenty (20) communities using interview guide and the cost efficiency of inputs in cocoa production was estimated using stochastic frontier production function. The empirical result of summation of the partial elasticities exhibited positive increasing returns to scale in the inputs use and the mean cost efficiency was 1.10 indicating that an average cocoa farms in the study area incurred costs that were about 10% above the minimum cost defined by the frontier .The findings show that cost efficiency of inputs use was fairly high. Hybrid varieties, level of education and age of tree, Farmer-based organization and extension contacts were found to be the main determinants of cost efficiency. This study recommends that Farmers should be encouraged to join farmer-based organization.

• Item Type: MPRA Paper
• Language: English
• Keywords: stochastic frontier model, cost efficiency and cocoa production.
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q12 - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

References

Adesina, A. A., & Djato, K. K. (1996). Farm size, relative efficiency and agrarian policy in Côted’Ivoire: Profit function analysis of rice farmers. Agricultural Economics, 14: 93–102.

Aneani, F., Anchirinah, V.M., Asamoah, M.,& Owusu-Ansah, F. (2007). Baseline socio-economic and farm managements survey. A final report for the Ghana cocoa farmers’ Newspaper Project. New Tafo-Akim: Cocoa Research Institute of Ghana (CRIG).

Battese, G. E,. & Coelli, T. J. (1995). A model for Technical inefficiency effect in stochastic frontier production for panel data. Empirical Economics, 20: 325-345.

Binam, J.N., Gockowski, J & Nkamleu,G.B. (2008). Technical Efficiency and Productivity Potential of Cocoa Farmers in West African Countries. The Developing Economies, XLVI-3: pp. 242-63.

Cochran, W. G. (1963). Sampling Techniques, 2nd Ed., New York: John Wiley and Sons, Inc.

Dzene, R. (2010). What drives efficiency on the Ghanaian cocoa farm? Ghana Institute of Management and Public Administration, Ghana.

Kalirajan, K. (1981). The economic efficiency of farmers growing irrigated rice in India. American Journal of Agricultural Economics, 3: 566–70.

Kumbhakar, S. C. & Lovell C. A. K. (2000). Stochastic frontier analysis. Cambridge University Press, U.K.

Kyei, L., Foli, G., & Ankoh, J. (2011). Analysis of factors affecting the technical efficiency of cocoa farmers in the Offinso district -Ashanti region, Ghana. American Journal of Social and Management Sciences.

Nkamleu G.B. & Ndoye, O. (2003). Cocoa based farming systems in humid forest zone of West and Central Africa: Constraints and Opportunities. Proceedings, 22 CORAF/IAC. Consultation Workshop on Science and Technology Strategies, Dakar, Senegal. Inter Academy Council, Amsterdam: The Netherlands.

Ogundari K., Ojo S. O., & Ajibefun I. A. (2006): Economics of scale and cost efficiency in small scale maize production. Empirical evidence from Nigeria. Journal of Social Sciences, 13(2): 131–136.

Ojo, M. A., Mohammed, U.S., Ojo, A.S., & Olaleye R. S. (2008). Analysis of cost efficiency in small scale irrigated tomato production: empirical evidence from Niger state, Nigeria. Global Approaches to Extension Practice: Journal of Agricultural Extension.

Owens, T., Hoddinott, J., & Kinsey, B. (2001). The impact of agricultural extension on farm production in resettlement areas of Zimbabwe. Working Paper Series 2001-6. Centre for the Study of African Economies, University of Oxford.

Paudel, P. & Matsuoka, A. (2009). Cost efficiency estimates of maize production in Nepal: a case study of the Chitwan district. Agriculture Econ Czech, 55 2009 (3): 139 149 Pudasaini, S. P. 1983. The effects of education in agriculture: Evidence from Nepal (Electronic version). American Journal of Agricultural Economics, 65: 508–15.

Weirs, S. (1999). The effects of education on farmer productivity in rural Ethiopia. Working Paper Series 99-7. Centre for the Study of African Economies, University of Oxford, UK.