ABSTRACT
The West African countries of Ghana and Cameroon are important cocoa producers. Consequently their governments have pursued policies to control and stimulate this crop. Due to two severe economic crises, both countries were forced to implement structural adjustment programmes to reform their economies. This chapter explores the effects of the liberalization component of these programmes on cocoa production and marketing in (a) the Ashanti Region of Ghana and (b) Central Province of Cameroon. Before reform, the market situation in both Ghana and Cameroon was characterized by monopsony and the producers were forced into the role of price taker. Prices and marketing margins were fixed by the state. The liberalization measures in the two countries, and their results, differ a great deal. In Cameroon the economic reforms were implemented radically from 1989 onwards. The government stopped its intervention in cocoa collection as well as its policy of price stabilization and permitted the private sector to take charge of all marketing activities. By contrast, the restructuring of the cocoa sector in Ghana occurred gradually. Whereas reforms started to take place from 1983 onwards, the restructuring of the market system began only in the 1990s. In both countries the cocoa producers were faced with the reduction or even termination of subsidies on important inputs such as insecticides, sprayers and planting materials.
This chapter starts with an overview of the importance of the cocoa sector at the national and regional level, followed by a short review of the production circumstances at farm level. Before looking at what the country and its cocoa producers have gained from trade liberalization, considerations with respect to the role of the state are discussed. The market reforms and the changing market performance are presented separately for both countries. It is shown that the results of the reform measures are very modest in terms of production increase and producer prices. In particular in Cameroon, cocoa producers have been left completely alone and have had to face enormous uncertainties. The road to a perfect market has turned out to be a long one.
