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Publication Details

Journal Article
JA0489-13
Article TitleAn optimal phased replanting approach for cocoa trees with application to Ghana
AuthorMahrizal, L. Lanier Nalley, Bruce L. Dixon and Jennie Popp
Year2013
Journal TitleAgricultural Economics
InstitutionInternational Association of Agricultural Economists
Volume45
Issue2013
Pages1-12
Call NumberJA0489-13
KeywordsCocoa; Optimal phased replacement rate; Net present value
Abstract:
This study solves for the optimum replacement rate (ORR) and initial replacement year (IRY) of cocoa trees (Theobroma cacao) in Ghana to maximize net present value and achieve steady state by employing a phased replanting approach. The annual ORR is 5%–7% across the three production systems studied: Low Input, Landrace Cocoa, High Input, No Shade Amazon Cocoa, and High Input, Medium Shade Cocoa. The optimal IRY ranges from year 5 to year 9 as a function of cocoa prices, fertilizer prices, labor prices, and percentage yield loss due to disease outbreaks. Deterministic results project economic gains that exceed currently practiced replacement approaches by 5.57%–14.67% across production systems with reduced, annual income volatility. The method applied in this study can be used to increase cocoa yields and stabilize income over time, and facilitate substantial quality of life improvements for many subsistence cocoa farmers in Ghana and around the world.
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GRP 2: Maximizing on-farm productivity of trees and agroforestry systems
GRP 3: Improving tree product marketing for smallholders
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