Working Paper 104 - Technology Gap and Efficiency in Cocoa Production in West and Central Africa: Implications for Cocoa Sector Development
|Publishing Date||23/01/2010 00:00|
Categories: Information & Communication Technology
Description This paper investigates the productivity potential (technological gap) and efficiency differences of cocoa sectors in countries in West and Central Africa, where tree crop systems, particularly cocoa production, are of particular interest. Approximately 70 percent of the world supply of cocoa originates from there. Producing countries derive most of their foreign income from cocoa, while export earnings and economic growth are dependent on cocoa productivity. A relevant question for agriculture policymakers is whether to pursue a strategy directed towards technological change (bringing in new technologies) or raising efficiency (improving the use of existing technologies). Shortfalls in production efficiency mean that output can be increased without requiring additional conventional inputs and without the need for new technology. In the presence of technological gap, technical progress is the rational strategy to adopt to significantly increase agricultural production. The study used data from a large survey of cocoa farmers carried out in four West Africa countries, namely Cameroon, Ghana, Nigeria and Cote d’Ivoire. We use stochastic meta-frontier production functions to measure the production efficiency and compute the technological gaps of the cocoa sectors in different countries of West and Central Africa. The results of the analysis show that in relation to cocoa production large productivity potential gaps exist between countries of the region. The gaps range between 0.70 and 0.96. These values can be interpreted as the technological gaps faced by the cocoa sector in those countries when compared at the regional level. The cocoa sector in Cameroon had the lowest technology gap, while that of Nigeria was highest. In terms of production efficiency, Nigeria’s cocoa sector had the highest mean technical efficiency relative to the national and regional frontiers. Ghana appears as the least performing country. The study supports the view that technical efficiency in the region under study is quite low and technology gap inhibits competitiveness. From a policy point of view, the priority in Cameroon should be on reducing the technology gaps, by investing in technological innovations already existing within the region. A country-to-country technology transfer arrangement should be encouraged. The findings suggest that in Nigeria and Cote d’Ivoire to achieve significant growth in the cocoa sector, priorities should be on improving the know-how of cocoa farmers. This could be achieved by putting in place sound government extension programmes and the development of rural credit institutions. In Ghana, both types of strategies should be pursued to tackle low efficiency levels and the technology gap.