My honors research focuses on pricing policies within Ghana’s cocoa industry and the impact they have on the incomes of cocoa farmers and on the efficiency of the cocoa industry as a whole.
I became interested in this topic due to my interest in economic policy, international economics, and developmental economics. All three topics are, to some extent, touched on in my honors research. What I find to be the most interesting about my research is the dilemma of setting an efficient producer price. The way Ghana’s cocoa industry works is that each year the Cocoa Marketing Board of Ghana uses future cocoa markets to set producer prices as a percentage of the world price. This specific percent is then paid to the cocoa farmers, while the remainder of the cocoa revenue is used to fund the various subsidiaries of the Cocoa Marketing Board and to provide subsidies for the farmers.
The problem that arises is that producers often see their incomes destabilized because they are not receiving the full world price for their cocoa. However, if they were to receive the full world price, the Cocoa Marketing Board would have no source of revenue to use to provide aid to the farmers. Therefore, my objective is to look at the costs and benefits of the current marketing system and produce a solution that will allow farmers to have higher and more stable incomes, while still providing the Cocoa Marketing Board with revenue to fund their subsidiaries and programs that aid the farmers.
In addition, I traveled to Ghana in December to conduct field research. While in Ghana, I was able to meet with officials from the Cocoa Marketing Board and several of its subsidiaries, as well as visit the first cocoa plantation in Ghana. Being able to conduct this field research impacted the shape of my project in many positive ways, as I was able to acquire new perspectives about the current marketing system, as well as being able to see first-hand what working on a cocoa plantation is like.
While I do not know if this research is something I will continue after I graduate, I am nevertheless grateful to have this experience. Even though honors research is rather stressful, it is also incredibly rewarding.