Technical Efficiency of Cocoa Farmers in Ghana

The commitment of the government in promoting and encouraging the welfare of cocoa farmers makes cocoa policies critical in Ghana. Having dropped below global production levels, however, technical efficiency in Ghana has continued to decline over the years. This study aims to analyse the extent of productivity and find the sources of technical efficiency in cocoa-producing households by applying the stochastic frontier approach to the Ghana-Living Standards Survey Round Five of 2005/06. The estimated technical efficiency has a mean of 47.82%. Crop diversification, mechanised farming and hired labour enhance technical efficiency, while emigration results in its deterioration. Other critical factors that influence efficiency are also identified.