Assessing the relationship between land ownership, credit accessibility and cooperative memberships on cocoa yield: A case study of the Ahafo Ano South-West District, Ghana

BSc. Evans Twum Abrokwah, BSc

Master's thesis

Abstract:

Ghana is one of the world's leading cocoa producers and the cocoa sector is a major contributor to the country's economy. The country's cocoa is considered one of the premium cocoa beans on the international market. Currently, Ghana produces 20% of the world's production and is the second largest producer and exporter of cocoa beans. The sector contributes 6-7% of GDP and employs an estimated 2 million people. It accounts for more than 30% of the agricultural sector's profits and is the most important agricultural commodity generating foreign exchange. An important percentage of government revenue comes from the export tax on cocoa. Because of cocoa's contribution to the country's economic development, various policy interventions have been made over the years to improve cocoa production, including varietal improvement, and training programmes. Despite government interventions in the cocoa industry and the crop's contribution to the country's GDP and socio-economic development, farm output per unit area is very low. Low cocoa yields remain a major problem for the sector. Some reasons have been put forward for this situation, including agronomic, geographical, socio-cultural, and economic. Farmers need credit to pay for inputs such as fertiliser, herbicides, and seedlings, and to hire labour during peak periods. However, smallholder farmers in Ghana can find it difficult to access credit, especially if they lack collateral or a credit history. Also, lower cocoa yields may result in farmers being less willing to invest in their plantations due to the lack of secure land tenure. In addition, membership of groups such as cooperatives or farmer organisations can give farmers access to information, know-how and the best farming techniques. With this information, farmers can adopt improved farming techniques and increase cocoa production. The aim of this study is therefore to examine the effect of access to credit, group membership and land ownership on cocoa yields. To this end, the study collected household level data from 416 smallholder cocoa farmers in the Ahafo Ano South-West Region of the Ashanti Region of Ghana. A purposive and random sampling technique was used to collect the data. Data were collected on the socio-economic and production characteristics of the households. The results are presented in tables with statistical interpretations made. The results showed that most farmers are old (50-59 years), have low formal education (12 years), have no access to credit, majority own the land and belong to cocoa producer associations. The analysis of variance showed that of the three variables of interest for the study (access to credit, land ownership and group membership), only being a member of a cocoa producer association is significant in explaining variation in yield. Furthermore, the interaction between access to credit and land ownership also has a statistically significant effect on yield. The study, therefore, concluded that membership of a cocoa producer association and the interaction of access to credit and land ownership are critical in influencing cocoa yield in the study area. Based on the conclusion, the study, recommended the provision of training services to the farmers through the cocoa producer associations or groups. In addition, the government, through the Bank of Ghana, should provide fiscal incentives (reduced cooperate tax, grants) to financial institutions that provide financial services or credit to smallholder cocoa farmers. Finally, land reforms are needed to improve land tenure especially for migrant farmers to complement access to credit.

Keywords

financial services, land tenure, cooperatives, smallholder cocoa farmer

Language used: English

Date on which the thesis was submitted / produced: 24. 4. 2023

Thesis defence

• Date of defence: 31. 5. 2023
• Supervisor: doc. Dr. RNDr. Tomáš Ratinger
• Reader: Samuel Ahado, externi

Czech University of Life Sciences Prague

Faculty of Tropical AgriSciences

Master programme:
Tropical Forestry and Agroforestry