How did changes to cocoa trading increase farmers’ income in Ghana?

In the 1970s, cocoa production in Ghana declined due to factors such as aging trees, poor infrastructure, and a lack of financial incentives for farmers. To address these issues, the government implemented significant changes to the domestic cocoa market in 1992 by allowing private traders to compete with the Ghana Cocoa Board.1

This liberalization of the market was highly effective in increasing farmers' income. By the late 1990s, the share of the world market price received by farmers rose from 25 percent to 60 percent. This increase in direct compensation provided the necessary financial incentive to stimulate cocoa production across the country.1