Culling the tree that feeds you: An optimal phased replanting approach for cocoa trees in Ghana

http://blog.worldagroforestry.org/index.php/2013/12/04/culling-the-tree-that-feeds-you-an-optimal-phased-replanting-approach-for-cocoa-trees-in-ghana/

BY REBECCA SELVARAJAH · DECEMBER 4, 2013

For maximum orchard productivity over time, culling and replanting of cocoa trees should start between 5 and 9 years from planting. This is according to a study by Mahrizal et al, published in ‘Agricultural Economics’, which compared  various cocoa production systems in Ghana over a period of 25 years. Producers in low-income countries often watch helplessly as their yields, and subsequently incomes, decrease as cocoa trees age. Now, however, extension personnel in have access to a simple yet powerful tool to demonstrate to producers how timely, phased replanting of their trees can maximise productivity.

Photo by Claude Adjehi/ICRAF

Ghana was the world’s largest cocoa producer in the early 1960s but experienced a significant decrease in yields in the 1990s, partially due to aging tree stocks. Low productivity results in low income for cocoa farming households in Ghana, and aging tree stocks are such a serious problem that the government is subsidizing the planting of new trees to increase national production.

Retaining cocoa trees beyond their economically productive life is considered to be one of the largest contributors to diminishing cocoa yields. Most cocoa trees in many parts of West Africa are abandoned when they get old, and subsequently not replanted or replaced. Unlike most conventional annual crops, cocoa producers have to weigh the benefits and costs of replacing assets whose productivity is plateauing or diminishing over time. Cocoa trees can yield fruit for up to 50 years but peak at a much earlier age, so culling and replanting are necessary to maintain maximum orchard profitability over time. Most impoverished cocoa producers, however, find it difficult to forgo immediate income to enhance long-run revenue potential.

Various replanting models have been applied in cocoa production: complete replanting (the removal all cocoa and shade trees), partial replanting (the removal all poor yielding trees over several years) and phased replanting. There is a void in literature on the optimal phased replanting of cocoa, and this study addresses that by examining the costs and returns of current Ghanaian production practices with that of phased replanting.

Data on yield, cocoa price, production costs, inflation, and discount rates for the three most prevalent productions systems in Ghana and West Africa—Low Input, Landrace Cocoa (LILC), High Input, No Shade Amazon Cocoa (HINSC), and High Input, Medium Shade Cocoa (HIMSC)—were compared over a 25-year period. It was found that the Optimal Replacement Rate (ORR) for all scenarios for the three production systems ranges from 5% to 7%, whereas the optimal Initial Replacement Year (IRY) varies from years 5–9.

Over 78% of Ghanaians live on less than $2 per day (USD) and the majority of the poor in Ghana are small-scale, semi-subsistence farmers. This study shows that substantial improvements in yield and income can be achieved by using the optimal replacement method, regardless of production system used. For instance, estimated income increases 14.67% per hectare per year when an optimal replacement method is adopted for the HIMSC system. There is the added advantage of decreased yield variability and, subsequently, decreased income variability. This benefits both producers and consumers by reducing price instability; making steady income streams possible for cocoa farmers; and encouraging producers to increase investments in new technologies that could, in turn, increase overall productivity.

These findings can be used to increase cocoa yields and stabilize income over time, and facilitate a substantial improvement in quality of life for many subsistence cocoa farmers in Ghana and around the world. By illustrating the benefits of steady yields and revenue generation, the study has valuable lessons for producers who are typically hesitant to cull productive assets.

Read the full paper.

Mahrizal; Nalley, L L; Dixon, B L; Popp, J. 2013. An optimal phased replanting approach for cocoa trees with application to Ghana. Agricultural Economics 45 p1–12. [2013231]

Smallholder production systems and markets; boosting the productivity and sustainability of forestry and agroforestry; and increasing incomes in forested areas are all key focuses of the CGIAR Collaborative Research Programme on Trees, Forests and Agroforestry of which the World Agroforestry Centre is a key partner.