Organization of Cocoa Sector
Cocoa has contributed significantly to the growth in the agriculture sector in Ghana and to the reduction of poverty among the nearly 700,000 smallholders that produce the crop. The marketing system, which is not fully liberalized, appears to be effective in passing on a significant share of export revenues to producers. As the oil sector develops in Ghana, there will be pressure on the sector, both from possible exchange rate appreciation and alternative opportunities for labor in cocoa growing regions, to become even more competitive. Continued expansion of the cocoa sector will be crucial for Ghana to maintain its growth and to reduce poverty. Moreover, the bulk of the government expenditures in the agricultural sector are financed by cocoa revenues.
The Ministry of Finance and Economic Planning requested a policy note looking for opportunities to make the cocoa sector more competitive particularly as the oil sector grows. As a result, at the request of Cocobod and the World Bank, GSSP assembled a database and conducted 4 analyses in order to identify opportunities to improve the marketing systems and effectiveness of expenditures in the sector. These reports seek to answer questions of whether the partial liberalization has delivered against expectations and whether further reform of the system will threaten the quality premium in order to inform cocoa development strategies.