Agroforestry as a climate change adaptation strategy: Evidence from Ghana's cocoa sector

Climate change is intensifying extreme weather events such as droughts and extreme temperatures, threatening agricultural systems. In sub-Saharan Africa, where most farmers rely on rainfed agriculture, the impacts are particularly severe. Agroforestry practices have the potential to provide a viable climate change adaptation strategy for many farmers. The ecological and economic benefits of agroforestry systems have been well studied, yet the extent to which agroforestry can enhance resilience towards adverse weather events at the household level, such as drought, remains largely unknown. Using a two-wave panel data set of 365 cocoa producing households and publicly available satellite climate data, we investigate whether the effect of drought differs between agroforestry adopters and non-adopters. We find that on average, agroforestry adopters are less severely affected by reduced rainfall. However, when disaggregating between regions that differ in climatic suitability, we find that this effect holds only in regions that are climatically suitable for cocoa production. In contrast, we do not find any significant effects in less suitable regions, where farmers are more prone to drought stress. Our findings suggest that agroforestry can serve as a climate adaptation strategy, though future research is needed to better understand under what conditions its benefits can be realised best.