Influence of non-price incentives on the choice of cocoa licensed buying companies by farmers in the Western North of Ghana

Abstract

Purpose The purpose of this paper is to examine the factors influencing the choice and the amount of cocoa beans sold to public and private licensed buying companies in the Western North of Ghana. Design/methodology/approach The study was conducted in the Western North of Ghana. Cragg’s Double Hurdle model was used to examine the factors influencing the choice of licensed buying company (LBC) whereas Kendall’s coefficient of concordance was employed in analysis of the marketing challenges. Findings The results showed that non-price incentives determine the choice and the amount cocoa beans sold to an LBC. Specifically, education, years of experience in cocoa farming and timely payment of sold cocoa beans positively influence the choice of public LBC. However, off farm job participation, provision of credit facilities and extension services affect the choice of private LBC as marketing outlet. Perceived low price of cocoa beans, inadequate credit support, and adjustment of scales used in weighing of cocoa beans were identified as the most important challenges confronting farmers. Research limitations/implications The research provides important information on non-price incentives influencing cocoa marketing outlet decision as well as the marketing challenges faced by farmers which can contribute to improving internal marketing efficiency of the cocoa industry in Ghana. Besides, this study also extends the frontiers in terms of methodological approach by adopting Cragg’s Double Hurdle Model in addressing the research question. Originality/value The research provides important information on non-price incentives influencing cocoa marketing outlet decision as well as the marketing challenges faced by farmers which can contribute to improving internal marketing efficiency of the cocoa industry in Ghana. Besides, this study also extends the frontiers in terms of methodological approach by adopting Cragg’s Double Hurdle Model in addressing the research question.