Abstract

This study empirically examined the production efficiency of cocoa farmers in Bibiani-Anhwiaso-Bekwai District in Ghana using farm level data. Results presented were based on data collected from a random sample of 300 cocoa farmers in fifteen (15) communities/villages using standardized structured questionnaires. The productivity and technical efficiency in cocoa production were estimated through stochastic frontier production function analysis. Empirical results showed that cocoa farms in the study area exhibited increasing returns-to-scale (RTS=1.26), indicating reducing average costs (AC) of production. This implies that cocoa farmers were operating in the irrational zone of production (stage I), an indication of inefficiency in production. The technical efficiency levels in cocoa production were estimated to range between 3 and 93% with a mean technical efficiency of 49%. The main factors that significantly affected technical efficiency in cocoa production were found to be farmer’s experience in cocoa production, farmer’s participation in the Cocoa Disease and Pest Control (CODAPEC) programme, and household size. The study recommended subsidies on chemical inputs for disease and pest control to improve resource use efficiency in cocoa production.

Key words: Cocoa, technical efficiency, stochastic production frontier, returns to scale.