TECHNICAL EFFICIENCY AND TECHNOLOGY GAP IN GHANA’S COCOA INDUSTRY: ACCOUNTING FOR FARM HETEROGENEITY

Abstract

This study employs a stochastic metafrontier framework to examine the performance of smallholder cocoa farmers using cross-country survey from Ghana. The results indicate that the output of farmers from all the regions lags behind their potential with the mean technical efficiency of 0.65, 0.76, 0.60 and 0.74 for Western, Brong-Ahafo, Ashanti and Eastern regions, respectively. Each region faces a technology gap when their performances are compared with the technology available in the industry as a whole. The study identified sources of farmers’ technical inefficiency emanating from a combined effects of socioeconomic and farm-specific factors although effects of some variables were not significant. However, farmers in all the regions have the potential to overcome technological constraints and achieve the highest attainable productivity levels. It is, therefore, important that Ghana cocoa board strengthened its strategies to the latter to improve farmers’ technical and managerial skills on the efficient use of resources.