Academic journal article Research in Applied Economics

Modelling Farmers Investment in Agrochemicals: The Experience of Smallholder Cocoa Farmers in Ghana

Academic journal article Research in Applied Economics

Modelling Farmers Investment in Agrochemicals: The Experience of Smallholder Cocoa Farmers in Ghana

Article excerpt

Abstract

The study analyzes the effects of the determinants of farmer's adoption of and investment in agrochemicals by collecting primary data from 156 sampled cocoa farmers in the Sefwi-Wiawso Municipality of Ghana. Descriptive statistical technique was employed to analyze demographic and farm-specific characteristics as well as the adoption rate and expenditure on agrochemicals. The findings highlighted the fact that, though a large proportion of farmers in the study area use agrochemicals, the intensity and amount spent to purchase these inputs are quite low. The Tobit regression model was used to identify and quantify the effects of the determinants of farmer's investment in agrochemicals. The results generally indicate that the sex of the farmer, age of the farmer, household size, educational attainment, mean age of cocoa farms, farm size and farmers previous output are all important variables in explaining farmers decision to invest in agrochemicals. The paper concludes by recommending that strategic policies orienting towards improving the adoption rate as well as targeting farmers who are less likely to invest in agrochemicals is a pressing issue.

Keywords: agrochemical input; demographic factors; farm-specific characteristics; Tobit Model; Cocoa Industry; Ghana

(ProQuest: ... denotes formulae omitted.)

1. Introduction

The importance of Agriculture to the development of developing economies in the World cannot be over-emphasized. In a period of rapid globalization and market liberalization, African countries are pursuing their comparative productive advantage to foster growth in a new liberal economic context. The quest for this comparative advantage implies a continuous if not a larger role for tropical commodity exports to generate foreign exchange and promote economic growth (World Bank, 2003). Most developing countries such as Ghana, Cote d'Ivoire, etc., depend largely on exports proceeds from primary products such as tree crops.

Among the perennial tree crops, cocoa sector is of particular interest for West and Central Africa, and for the global chocolate industry. Producing countries derive a large proportion of their foreign income from cocoa. Over the past ten years, West African countries have contributed the largest quantity of the world's cocoa, ranging between 54% and 71% of the total production (Awuah, 2002; FAO, 2004). For example, in 2001, Côte d'Ivoire exported more than 1.4 million tons of cocoa. This contributed about 40 percent of exports, 14 percent of GDP, and more than 20 percent of government income (Nkamleu&Kielland, 2006). The cocoa sector in Ghana employs about 800,000 smallholder farm families providing food, employment, income, tax revenue and foreign exchange earnings for the government. The contribution of the sector has been very impressive over the last decade. For instance, in 2008 the sector contributed about 28.5% of Ghana's foreign exchange earnings out of about 38% by the agriculture sector (ISSER, 2008).

In Ghana, cocoa production has been fluctuating over the last decades ranging from 350,000 tons in 1998 to about 750,000 in 2004/2005 cocoa season. However, in the last decade, growth in the sector has been increasing at an increasing rate with a record-breaking of about 1,000,000 tons in 2012 cocoa season. It is believed that this increase in output is attributed to a number of interventions including the cocoa Hi-Tech programme popularly known as "Mass Spraying Exercise". In spite of this tremendous increase in production, average yields per hectare is still below the potential estimated average of about 1000kg/ha. Ghana's yield/ha is about 400kg which is substantially lower than those observed in some of the cocoa producing countries such as Malaysia (1800kg/ha) and Cote d'Ivoire (800kg/ha) (Binamet al., 2008; Barrietoset al., 2008 ).

The low productivity of cocoa is partially attributed to the depleting of soil nutrient, farmers inability to control pests and diseases as well as escalating cost of inputs in recent years. …

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