Efficiency of Inputs use in Cocoa Production in Twifo Hemang Lower Denkyira area of the Central Region of Ghana

Abstract

The most important cash crop in the agricultural production in Ghana remains cocoa due to its huge contributions to GDP, foreign exchange earnings, employment creation, poverty alleviation through the income generation etc. However, the continual expansion of land for crop production with low outputs and its concomitant low income is worrying and threatens the future sustainability of the sub-sector. The relevant issue is the efficiency with which the various inputs are combined in the production process to yield output. The study empirically examined the efficiency of inputs use in Twifo Hemang Lower Denkyira area of Central region of Ghana using farm level cross-sectional data. Results presented were based on data collected from a three-stage sampling of 400 cocoa farmers in twenty (20) communities using standardized structured interview guide. The productivity and technical and cost efficiency of inputs in cocoa production were estimated through stochastic frontier production function analysis. The empirical result of summation of the partial elasticities exhibited positive increasing returns to scale for the inputs use in cocoa production in the area. All the inputs included in the study had significant effect on output and cost of cocoa production. The findings show that technical efficiency of inputs use is low in cocoa production but cost efficiency 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 technical and cost efficiency. Among other things, review of the extension services in the study area was recommended.