Crop Biodiversity: Economic Implications for the Cocoa Sector in Ghana

Adeline Ofori-bah (2011). Crop Biodiversity: Economic Implications for the Cocoa Sector in Ghana PhD Thesis, School of Economics, The University of Queensland.

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Author Adeline Ofori-bah
Thesis Title Crop Biodiversity: Economic Implications for the Cocoa Sector in Ghana
School, Centre or Institute School of Economics
Institution The University of Queensland
Publication date 2011-12
Thesis type PhD Thesis
Supervisor Associate Professor John Asafu Adjaye
Dr. Lana Friesen
Total pages 292
Total colour pages 12
Total black and white pages 280
Language eng
Subjects 14 Economics
Abstract/Summary Increases in the producer price of cocoa over the period 2001 to 2010 and the subsequent improvement in the profitability of farming the crop have provided incentives for farmers in Ghana to expand cultivated land, leading to the conversion of forest lands to cocoa farmland. The process has contributed to deforestation and raised concerns about the loss of forest biodiversity and the sustainability of agricultural production. The government of Ghana and associated na¬tional and international institutions are therefore promoting agroforestry technolo¬gies that facilitate rehabilitation of old cocoa farms and recycling of degraded lands in order to conserve biodiversity, while at the same time reducing the problems surrounding farm efficiency. Some cocoa farmers have, however, not responded positively to the drive to diversify their crops because of their perception that the cropping practice is costly. This thesis investigates the value of the benefits that cocoa farmers derive from the goods and services provided by diversified farming, as well as the factors that influence the farmers’ valuation of these services. It makes credible contributions to the literature on the benefits of crop biodiversity in two main ways. Firstly, it undertakes an economic valuation of crop biodiversity benefits to the cocoa farmers. Because a number of the goods and services obtained from crop biodiversity are non-marketable, a contingent valuation method (CVM) survey is employed to quantify individual farmers’ economic surplus associated with the goods and services. Based on the random utility maximization theory, dichotomous choice responses to a willingness to pay (WTP) question in the CVM survey are analyzed econometrically to derive average monetary values that cocoa farmers associate with the goods and services. Socioeconomic and institutional factors that influence the farmers’ WTP for the benefits are also investigated. Secondly, the research applies estimation methods developed for multiple output production technologies to investigate the presence of technical efficiency and economies of scope on cocoa farms in Ghana that seek to conserve forest biodiversity by multiple cropping. Even though economies of scope between two or more outputs are a cost concept which is traditionally evaluated using the cost function, duality between the cost function and the input distance function makes it possible to obtain estimates of the economies using the latter function. The application of the distance function concept in the case of a smallholder production environment like cocoa farming in Ghana, when shadow costs can be assumed to be minimized, is appropriate. This is because, besides the fact that it does not require restrictive assumptions, obtaining reliable cost data from smallholders is invariably problematic. An interviewer-administered structured questionnaire was used to collect farm level data for the two empirical studies. The estimated mean WTP for the benefits of crop biodiversity obtained from the three models developed for this study ranged between GHC 38.02 and 39.91 per person. The aggregate WTP for the benefits was estimated to range between GHC 26.62 million and GHC 27.93 million. The results show that individual perception of the benefits of crop biodiversity and attitude towards the conservation of biodiversity on farms have the greatest influence on farmers’ WTP for the crop biodiversity benefits. Thus, policies that positively modify an individual’s attitude in favour of crop biodiversity can make a significant impact on the adoption of multiple cropping by cocoa farmers. The high level of WTP suggests that efforts at gaining farmers’ interest in multiple cropping are less likely to meet significant opposition if the policy environment does not erode any perceived incentives from the cropping practice. The results from the efficiency analysis provide evidence of economies of scope between cocoa and the crops with which it is multiple cropped and therefore share inputs. The evidence is consistent with the ecological notion that complementarities in resource use by forest trees can enhance plant productivity. Some evidence for the existence of increasing returns to scale in multiple cropped cocoa systems is also provided. In addition, farmers with multiple crops were found to be more technically efficient compared with their counterparts who mono-cropped. Hence, opportunities to expand crop output without a substantial increase in inputs or adopting new technologies is limited for a majority of multiple cropped cocoa farms. The results suggest that complementing the promotion of multiple cropping with other policy interventions that could bring about technical change. That is, the production frontier could be shifted outwards to increase the prospects for improving cocoa farming productivity while conserving biodiversity.
Keyword Crop Biodiversity, Cocoa farming, Smallholder farming, Contingent valuation method, Economies of scope, Technical efficiency, and Distance function
Additional Notes 34, 36, 44-45, 52, 54, 64, 70-71, 82, 87, 226

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Created: Thu, 02 Feb 2012, 04:53:33 EST by Ms Adeline Ofori-bah on behalf of Library - Information Access Service