Economic analysis of cocoa production in Ghana: the case of eastern region

YAHAYA A. M. , Karli B. , Gul M.

CUSTOS E AGRONEGOCIO ON LINE, vol.11, no.1, pp.336-352, 2015 (Journal Indexed in SCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 11 Issue: 1
  • Publication Date: 2015
  • Page Numbers: pp.336-352


Cocoa (Theobroma cacao Lineus) has remained a valuable crop and major foreign exchange earner among other agricultural commodity export of the Ghanaian economy. The main purpose of this study is to examine the economics production of cocoa in Eastern Region. Eastern Region (East Akim, Aboakwa North, New Juaben, Suhum Kraboa Coatal and Akwapim North districts) being the study area was particularly chosen for this study because of its prime place in cocoa production in Ghana. Data used for the study were collected from 80 cocoa farmers using a well-structured questionnaire for the 2013-2014 farming season. Descriptive statistics, farm budget analysis, profitability and ordinary least square regression were the major analytical tools employed for the study. Results of the analysis showed that the average production cost of cocoa was GHC 1.34 per kg and profit margin was GHC1.80 per kg in cocoa producer enterprises. The gross margin and net profit were calculated as GHC 956.78 and GHC 621.24 per hectare respectively. Relative profit was calculated as 1.49 which indicates that cocoa production in the study area is profitable. Farm size, farmer's age, farming experience and other cost less labour cost were identified as the significant factors affecting the output of cocoa production in the study area. The price of the cocoa is the most pressing problem the cocoa farmer faced. The study therefore recommends that cocoa farmers should be provided with credit facilities from formal credit institutions at affordable interest rates in order to boost cocoa production in the country and government through the Ministry of Food and Agriculture should establish large scale of cocoa farm to employ the youth in order to ease the unemployment rate which is a big problem in the country.