IMPACT OF CLIMATE CHANGE ON COCOA PRODUCTION IN WEST AFRICA

Abstract

West Africa’s supply of 70% of world cocoa output generates 2 billion US dollars annually and contributes substantially to the economic development of the region. Climate change has led to new patterns of temperature and precipitation which are projected to reduce agricultural yields, including cocoa production, globally. Studies on the impact of climate change have focused on arable crops with very little attention to cash crop like cocoa. This study, therefore, examined the current and future impact of climate change on cocoa production in West Africa from 1969 to 2009. A transcendental logarithmic (translog) production function, based on the crop yield response framework, was tested using data drawn from eight cocoa producing countries, namely; Cote D’Ivoire, Ghana, Nigeria, Togo, Benin, Liberia, Sierra-Leone and Guinea. Panel regression techniques of fixed and random effects were used to determine the current impact of climate change on cocoa output. In order to ascertain the speed of adjustment to long-run equilibrium, the panel analysis was complemented with the Engle-Granger Error Correction Model (ECM). The future impact of climate change on cocoa output was analysed with an out-of-sample simulation for the sub-region. The simulation was based on plausible scenarios of various scientific reports including those of the Intergovernmental Panel on Climate Change (IPCC). Since crop yields are sensitive to weather extremes, the data used were the maximum values of temperature and precipitation alongside their mean values. Precipitation positively affected cocoa production in the sub-region with an estimated coefficient of 0.77for the mean dataset and 0.52 for the maximum dataset. The impact of temperature on cocoa output was significant only under the extreme temperature condition. Specifically, while temperature had a negative impact on cocoa output with an estimated coefficient of -0.57 for the maximum dataset, the estimated coefficient for the mean dataset was -0.30. The ECM showed that the speed of adjustment to long-run equilibrium ranged from 39.0% to 57.0% and from 43.0% to 83.0% for the maximum and mean datasets respectively. The lowest speed of adjustment in the region was recorded by Nigeria while the highest was recorded by Cote D’Ivoire. Moreover, the simulation results showed that with the current trajectory of temperature increase of 0.02oC per annum and precipitation decrease of 0.002mm per annum, cocoa output in the West African sub-region would reduce by 8.6% in the next ten years. Extreme temperature adversely affected cocoa output in the West African Sub-region. The increasing temperature and declining precipitation trends would also reduce cocoa output in the future. These threaten the future of cocoa industry in the Sub-region. Therefore, it is crucial for the authorities to develop adaptation strategies for the cocoa industry. This should take the form of investment in irrigation infrastructure to enhance cocoa output in periods of low precipitation. Also, farmers need to be encouraged and resourced to maintain cocoa shade on their farms to buffer temperatures in order to improve cocoa yield. Keywords: Climate change, Cocoa output, Translog, Panel data. Word count: 479.