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2011 (Vol. 3, Issue: 6)
Article Information:

Market Structure and Competition in the Ghanaian Cocoa Sector after Partial Liberalization

Benjamin Tetteh Anang
Corresponding Author:  Benjamin Tetteh Anang 

Key words:  Cocoa, competition, Ghana, liberalization, licensed buying companies, market structure,
Vol. 3 , (6): 465-470
Submitted Accepted Published
2011 August, 19 2011 September, 18 2011 November, 20
Abstract:

The study looked at market structure and competition in Ghana cocoa sector after the introduction of partial reforms in cocoa marketing. The study involved 80 randomly selected cocoa farmers from four communities in Bibiani-Anhwiaso-Bekwai District, Western Region, Ghana. Secondary data were collected from the Head Office of Ghana Cocoa Board, Accra. Results showed that more firms have entered the industry since the introduction of competition resulting in an increase in industry competition and a loss of market share of the top buyers. The cocoa sector experienced a gradual decrease in market concentration. The concentration ratios revealed that a few large firms continue to dominate the market. However, there are no monopolistic tendencies in the Ghanaian cocoa sector and firms are free to compete with each other for market shares. The absence of price competition has resulted in an interesting marketing scenario with producer-buyer loyalty playing a key role in gaining market share. Licensed Buying Companies have found ways to ensure that farmers sell to them alone and these include prompt payments, social involvement in farmers communities, and provision of services, incentives, subsidized inputs and credit. Farmers in turn maintain loyalty to buyers who provide certain incentives and cash rewards. More benefits accrue to farmers now than the period before the reforms. It was concluded that the market structure in Ghana cocoa sector will remain unchanged for some time if the government of Ghana maintains its partial liberalization policy.
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  Cite this Reference:
Benjamin Tetteh Anang, 2011. Market Structure and Competition in the Ghanaian Cocoa Sector after Partial Liberalization.  Current Research Journal of Social Sciences, 3(6): 465-470.
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