Growth through Pricing Policy: The Case of Cocoa in Ghana
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Cocoa has and continues to play a central role in the economy of Ghana which is now the
second largest producer of cocoa beans in the world. But it has not always been so. At its
nadir in the early eighties, the cocoa sector was one half of what it was in the decade after
independence. The paper argues that the key to this success is anchored to specific
strategies put in place and managed by the state-run marketing board, COCOBOD. An
important strategy was to pass on an increasing share of export prices to producers,
which with growing global prices in the 2000’s gave producers higher real prices. Two
major government programmes – also initiated in early 2000’s – offered farmers
improved varieties, subsidized fertilizer and free pest and disease control. These
programmes triggered a cocoa revolution by enabling farmers to more than double their
yields. This transformation was inclusive because cocoa production remains traditional
and labour intensive, and enabled smallholders to intensify production to a greater extent
compared to large holders. Improved land productivity contributed to reduced poverty,
where incidence rates among cocoa growing households have nearly halved since 2005.