Socio-Economic Determinants of Diversification Behavior of Cocoa Producers in the Ashanti Region

Abstract

The study analyses the effect of the socio-economic determinants on diversification behavior of cocoa producers herein referred to as ‘producers,’ in the Ashanti Region of Ghana. The Logit model was employed in the study, which identifies the reasons for diversification into other perennial and annual crops, animal production and off-farm activities. The constraints faced by producers in diversifying, as ranked by the producers, are also analyzed. Three hundred and four producers are sampled randomly from five cocoa growing districts in the region, namely Juaso, Nkawie, Tepa, Fumso and Obuasi. The study observes that 5.92 percent of the producers sampled do not diversify at all and cultivate only cocoa while the rest of the producers diversify. The study observes that the prime reason for diversifying is to increase cocoa producer income. The significant socio-economic determinants of diversification include access to infrastructure (primary education, telecommunication facilities, postal services and health services), age of cocoa trees, number of dependents of the producer and size of cocoa farm. This study recommends, inter alia, the provision of infrastructure to cocoa growing areas in order to enhance diversification since it is a means for increasing farmer income. Producers in all forms of diversification activities face the constraint of capital inadequacy. This study further suggests a provision of both financial and material capital to cocoa producers who desire to diversify. The study finally makes suggestions for future research.