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Production

Small Scale Profitability

Over 90% of cocoa in Ghana is grown on small farms (Asante-Poku & Angelucci, 2013), but it is often questioned whether this way of cocoa farming will continue to be viable in the future and whether it can ever be a profitable business (Kolavalli & Vigneri, 2011). This has also been mentioned as a explanation for the fact that young people do not want to continue in cocoa farming. Small scale farms are less profitable because they can not benefit from economies of scale. For example, it is said that when the cocoa farm is less than one hectare, it will not be profitable to buy a motorized spraying machine, which will have a capacity far above the farm size (Anon., personal communication).

 

However, expanding the farm is very difficult because of the land scarcity and complex tenure system. Therefore, it seems that structural transformations of the cocoa production sector might be necessary where larger and more efficient farms are promoted (Anon., personal communication). Until now, it is not clear how to motivate farmers to invest in their farms to become more productive and innovative. At the same time, it is important to think about what alternatives are for the many small scale cocoa farmers that there are at the moment and their successors.

 

Finally, it should be noted that in the debate, these farms are generally referred to as “small scale farms”. However, in reality there is a lot of variation in the size of the different small scale farms but in research, this differentiation is often not made.

 

Research needs:

 

  1. Can a small scale farm ever be profitable enough to provide a decent living?
     

  2. What are the variations in “small scale farms”? What is causing this variation?
     

  3. Should more large scale cocoa farming be promoted? What would be the consequences?

Further  reading:

 

Kolavalli, S., & Vigneri, M. (2011). Cocoa in Ghana: Shaping the Success of an Economy. In P. Chuhan-Pole & M. Angwafo (Eds.), Yes, Africa Can: Success storyies from a dynamic continent. Washington, DC: The World Bank. doi:10.1596/978-0-8213-8745-0

 

 

 

Websites:

 

 

 

 

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