Propagation of taste for climate resilience: evidence from cocoa value chain in Ghana

Sub-Saharan African countries are increasingly vulnerable to the dual crisis of environmental degradation and climate change. Meanwhile, consumers from developed countries increasingly demand sustainable products. Understanding how demand shocks propagate through the production network to ultimate producers will support policy making on climate-change-resilient technology adoption in low-income countries. This project investigates this question via the lens of cocoa bean production in Ghana. The relevant adaption technology is shade-grown, which reduces deforestation stress and increases production stability. In this project, the researchers conduct a lab-in-field random experiment on farmers’ responses to different subsidy schemes targeting shade management. The aim is to examine how different levels of the price premium for shade-grown cocoa beans affect producers' decisions on shade-grown technology adoption and compare it with the traditional payment-for-ecosystem type of policies. 

The lab-in-field experiment contains two interventions: a subsidy intervention for shade cocoa, and an information intervention about the impact of shade trees on cocoa productivity. The interventions are accompanied by baseline and follow-up surveys to collect data on production, transactions, and farmers. The researchers will focus on two sets of outcomes: (1) production outcomes (quantity for cocoa under different subsidy schemes); (2) adoption of shade technology and other related adaptation behaviours (crop allocation, capital investment, labour allocation by gender). The baseline survey also collects data on heterogenous farmers’ experience and beliefs of climate change. Combined with available observational survey data with rich information on ethnicity and culture norms, it is possible to explore the heterogeneity in adaptation by gender and climate-change-related experience and taste.

As one of the most important cash crops of Ghana, cocoa is vulnerable to climate change-induced droughts and diseases. Policies to improve adaption technologies like shade-grown practice are thus of high priority. This study speaks to the effectiveness of policy interventions on the adaptation behaviours of heterogeneous agents. Indeed, governments can easily implement the informational policy to increase the adoption of shade-grown practice. The policy relevance also involves the differential vulnerability between men and women to climate change, since shade-grown technology may have differential impacts on technology adoption and labour allocations. 


Yunyu Shu

Brown University

Jiayue Zhang

Brown University