Agricultural Production And Pricing Policy Nexus: A Reflection Of The Ghana Cocoa Industry

Ghana is currently the second major producer of cocoa in the world. Past supply of cocoa to the world market has not been encouraging in the past until recent. After its achievement of a record crop in 1964/65, the country achieved the lowest cocoa production in its history of cocoa export, in 1983/84 season. This was attributed to pest and diseases, and also lower producer price among other factors. This called for government intervention in the industry with policies including high producer price and also cocoa pest and disease control programme (CODAPEC) to stimulate cocoa production. This paper seeks to examine the effects of these policies. The study used cointegration and error correction modelling technique with time series data. The producer prices were deflated to the period 2000. The findings showed that farmers were more influenced by the price policy both in the short and long run. However, the production policy (CODAPEC) showed a negative responds which is contradictory to economic theory. Enforcing accountability of gang officials and direct distribution of chemicals to farmers would make cocoa supply respond positively to CODAPEC. In spite of the importance of these policies to cocoa supply, various studies have been biased against CODAPEC, and it is this gap that this study seeks to address.