Title: Trade, exchange rate, and agricultural pricing policies in Ghana
Description: This report shows that Ghana's economic decline of agricultural prices cannot be attributed solely to government price intervention. But intervention in the workings of the cocoa sector contributed heavly to the country's inability to achieve prosperity and stability after 1957. During the decades since independence in 1957, direct intervention in Ghana's all-important cocoa sector has been in the hands of a Cocoa Marketing Board (CMB), which sets annual producer prices, purchases the crop from domestic producers and markets it to foreign buyers. Although the chief reason for creating the CMB was to assure Ghana's cocoa farmers a stable and decent income, the agency's direct intervention helped to keep producer prices lower than they might have been otherwise. The government's direct and indirect intervention in the cocoa market, according to the study, far outweighed its incentives to cocoa producers. Moreover, most of the benefits of these incentives went to large producers rather than the far more numerous smallholders. Another important finding of this study is that government regulation of the cocoa sector had the serious negative long-term effect of deferring the replacement of old coffee trees with new ones.
Subjects: Agricultural prices, Cocoa trade, Commercial policy, Government policy
Places: Ghana