The cocoa industry in Ghana and the Ivory Coast : a comparative study of government agricultural policies and their impact
The cocoa industry has been the economic pillar of Ghana and the Ivory Coast for over three-quarters of a century. Both countries have depended on the industry for the bulk of the wherewithal required for economic development. In Ghana, the industry has however, since the beginning of the 1970s, shown clear signs of decline in terms of output. Cocoa output in Ghana has slumped from 538,000 tonnes in 1965 to 175,000 tonnes in 1985. In the Ivory Coast, cocoa output has on the contrary, risen from 148,000 tonnes in 1965 to 565,000 tonnes in 1985. Ghana is currently trailing behind Ivory Coast and Brazil in cocoa beans production. The objective of the study has been to identify the causes of the decline and growth-of the cocoa industry in Ghana and the Ivory Coast respectively through an in-depth study of government agricultural policies. The rationale behind the comparative study is to bring out the strengths and weaknesses in the agricultural policies of the two countries so that Ghana can sift out the good policies that have aided the Ivory Coast cocoa industry to flourish and use them to revamp, its floundering cocoa industry. The study employs multiple regression, cost-benefit and domestic resource costs techniques to analyse government agricultural policies and to assess the relative profitability of cocoa production. The study has revealed that the major explanatory factor for the current state of the industry in both countries is the producer price policy of the governments of the two countries. While producer prices are not favourable in Ghana, they tend tobe relatively high in the Ivory Coast. The poor producer price policy of the government of Ghana has led to a shift of resources from the cocoa industry to other more lucrative ventures such as food-cropping and commerce. Other factors that have been discovered through the study to account for the decline of cocoa output in Ghana include inefficient marketing system, lack of farm inputs and poor implentation of cocoa rehabilitation projects. The results of the comparative advantage analysis suggest that there is the need for Ghana to embark on a policy of agricultural diversification. Besides cocoa, a cash crop whose development is worth encouraging by the government of Ghana is the oil palm. Based on the experience of the Ivory Coast, a number of recommendations have been suggested in the concluding chapter for adoption by the government of Ghana. These policy recommendations include a yearly upward adjustment of the cocoa producer price to a level that will leave the cocoa farmer with an appreciable profit margin, the privatization of the cocoa marketing board, a regular and an adequate supply of farm inputs and an efficient implementation of cocoa rehabilitation projects.