Assessing Poverty Situations: A Case Study of Cocoa Farming Households in the Asikuma-Odoben Brakwa District of the Central Region

Bachelor Thesis 2008 38 Pages

Agrarian Studies


Assessing Poverty Situations: A Case Study of Cocoa Farming Households in the Asikuma-Odoben Brakwa District of the Central Region


Ghana has achieved substantial poverty reduction over the last 15 years and is on track of reducing its poverty rate by half before the target date of 2015 for the Millennium development Goals. The objective of this study is to document this remarkable achievement, and more broadly to review the evidence on a range of issues related to poverty reduction among cocoa farmers in Asikumah-Odoben-Brakwa of the Central Region using the most recent household survey data available The study aims to determine the contributions of cocoa farming activities to household income and consumption; to determine their level of access to basic services ; to determine the contribution of cocoa into the general well-being of the people and to make recommendations on how the cocoa industry could be used to improve the living standard of the Ghanaian rural communities.

The study would rely on some comparable selected Core Welfare Indicators Survey (CWIQ) for 1997 and 2003 pertaining to Asikumah-Odoben-Brakwa District.

In conclusion, the study found out that cocoa farming coupled with government provision of other social services has contributed in reducing poverty in the Asikuma-Odoben-Brakwa District thus most cocoa farming households are above the upper poverty line. Notwithstanding that, the study strongly recommends that government and other key stakeholders look at improving the health needs, provision of decent housing scheme and monitoring the usage of cocoa weighing scales to guaranty fairness.


1.1 Background to the study

According to World Cocoa Foundation (WCF), cocoa is described as a smallholder crop, employing a majority of people and their families in the tropics. In the 2000 Population and Housing Census the figures revealed that cocoa farming employs over 1.5 million out of about 3,972,407 people in agricultural activities largely in rural areas of the country. According to earlier studies by NPECLC (2007), they found out that in many cases cocoa is the only source of income for these families enabling them to meet basic human needs such as food, housing, shelter and health care thus reducing poverty among most Ghanaians.

Since commercial quantities of cocoa production began in about 1879 with cocoa pods brought from Fernando Po by Tetteh Quarshie cocoa cultivation has been considered as an important economic activity. Manu.M and Tetteh E.K, (1987), however found out that, the crop is highly produced by rural farmers generally smallholders who operates family farms and cultivate acreages that range from about three acres or less in the Western North and Western South regions .The rest of the regions are Brong Ahafo, Ashanti, Central and some part of Northern Volta where rainfall is 1,000-150 millimetres per year. A few outliers may operate farms that are less than an acre, or up to about a hundred acres or more in some cases.

Tiffen, Pauline, et al (2006),cited that cocoa farming is also the basis of economic security for a wide range of people within Ghana especially women .Often cocoa farms are passed on to women as inheritances to ensure that they have an income and are protected from destitution, particularly as they age. Studies have shown that income earned from cocoa by women is more likely to be used to meet families’ basic needs, such as nutrition, healthcare and education. Thus, the cocoa farming helps to reduce the poverty level among families especially in the rural areas.

Tiffen, Pauline, et al (2006), also tenant or sharecroppers frequently take up cocoa farming because it provides an opportunity for social mobility and, for some, provides enough income to send remittances to family members in other parts of the country to pay for food and children’s educations. It is clear that, an improvement in the living standards of one cocoa farmer improves the lives one or two other Ghanaian.

Government through a number of initiatives has contributed in reducing poverty among cocoa farmers by implementing the objectives of the Ghana Poverty Reduction Programme (I and II).One of the objectives is to improve rural incomes by focusing on improving the method and quantity of cocoa produced and by increasing the farm gate price.

From 2002, government has providing insecticides and mass spraying of cocoa farms as a measure to increased output by cocoa farmers. In 2005 a consistent policy to improve agronomic practices, disease and pest control and increase value addition was pursued to increase rural incomes and to sustain the improvement of the cocoa industry. Government also continued to pay and increase cocoa bonuses to the tune of 429 billion to cocoa farmers. The Cocoa Board Scholarship Fund also increased its awards by about 25% over the previous year to the children on cocoa farmers to relieve the burden of cocoa farmers.

The COCOBOD also released 1 billion as seed money for the commencement of the proposed Cocoa Farmers’ Housing Scheme.

1.2 Problem Statement.

Although most cocoa production is carried out by peasants’ farmers on plots of less than three hectares a small number of farmers appear to dominate the trade. Cocoa production is also source of income for approximately 1.5 million people in production and transport. Income from cocoa farming enables families to pay for their basic commodities, medicines and schooling for their children

Indeed some studies show that about one-fourth of all cocoa farmers receive just over half of the total income. Mensah (2006), cited that one general problem identified within the cocoa households is poverty. Notably, with recent increases in cocoa prices, yields and production, one would expect poverty among cocoa farmers to have been reduced substantially over time, and indeed faster than for other population groups. 1.3 Justification

Recently, whiles much effort is being made to increase cocoa production in Ghana through pest and disease control by mass spraying exercise, paying of farmers’ bonus and other incentives and the improvement of research in the area of soil fertility. Cocoa farmers in the Asikumah-Odoben-Brakwa District have not seen much improvement in their livelihoods. This study will help key stakeholders in the industry and the authorities in the District to ascertain the impact of the cocoa farming in poverty reduction among cocoa farming household.

1.4 General Objectives

- To assess poverty incidence among cocoa farming house holds in Asikuma Odoben- Brakwa District of the Central Region.

1.4.1 Specific objectives

- To determine the contributions of cocoa farming activities to household income and consumption.
- To determine the contributions of cocoa income into the general well-being of cocoa farmers in the Asikuma -Odoben -Brakwa District.
- To determine the access of cocoa farmers to basic services such as health care, housing and nutritional needs.


2.0 Introduction

This chapter reviews important literature in relevant to the study. It covers topics such as measure and definitions of poverty, consequences, perspectives and concept of poverty. The chapter also covered situations of poverty in Ghana specifically national, regional and district poverty trends. The chapter also review issues relating to household characteristics of farmers in Ghana and the types of ownership of cocoa farms

2.1 Definitions of poverty and the poor

According to the World Bank (2000), “poverty is pronounced deprivation in well-being.” It can also be agreed that poverty results from lack of human, physical and financial capital needed to sustain livelihoods and from inequities in access to control and benefit from reasons, be they political, social or economic.

The World Bank further described that poverty is hunger, lack of shelter, situation of being sick and not being able to see a doctor. Poverty is also not having access to school and not knowing how to read. Poverty is not having a job, is fear for the future, living one day at a time. Poverty is losing a child to illness brought about by unclean water. Poverty is powerlessness, lack of representation and freedom.

The Encarta World English Dictionary also defines poverty as the state of not having enough to take care of basic needs such as food, clothing, and housing. It also described poverty as a general word for the state of being without enough money or resources to live at a standard considered normal or basic by society.

The individual is described as poor/non-poor when consumption expenditure per day is defined to be below/above one US$ according to UN Statistical Report (2003). Thus the poor can be characterized as living in material deprivation, physical weakness: isolation, vulnerable and powerlessness.

The Human Development Report (199:15) in its report states that “a person is said to be poor if in monetary terms, ‘income’ or ‘expenditure’ falls below a level accepted as the minimum to assure a minimum descent standard of living”

According to the UN Sectary General (April 2001), he also described the poor as constituting roughly one fifth of the world’s population currently living or trying to live on less than one dollar a day.

2.2 Concept and consequences of poverty

2.2.1 Concept of poverty

There are two approaches of definition to poverty that have been favoured by sociologists and researches: absolute poverty and relative poverty. The concept of absolute poverty is grounded in the idea of subsistence-the basic conditions that must be met in order to sustain a physically healthy existence. People who lack these fundamental requirements for human existence-such as sufficient food, shelter and clothing –are said to live in poverty.

The concept of absolute poverty is seen as universally applicable. It is held that standards for human subsistence are more or less the same for all people of an equivalent age and physique, regardless of where they live.

Not everyone accepts that it is possible to identify such a standard; however it is more appropriate, they argue, to use the concept of relative poverty, which relates poverty to the overall standard of living that provides in a particular society. Advocates of the concept of relative poverty hold that poverty is culturally defined and should not be measured according to some universal standard of deprivation. It is wrong to assume that human needs are everywhere identical- in fact, they differ both within and across societies.

2.2.2 Consequences of poverty

According to NPRP(1999,2000 and 2001),the major consequences of poverty include;hunger,sickness,powerless,low self-esteem,isolation,sense of helplessness, weak capacity to educate the children, inability to honour social obligations, a feeling of insecurity and vulnerability of and drudgery.

Cramer and Jensen(1994), also explained that the consequences of poverty are the inability to meet their social, economic and other household responsibilities, living in dilapidated housing, inability to afford good medical or health services with others becoming unemployed due to inadequate capital to invest in their work.

2.3 Three perspectives of poverty

According to UNDP, (HDR 1999:16) there are three approaches to poverty that has been described. The three perspectives of poverty include income, basic need and capabilities.

2.3.1 Income perspective

A person is poor if; and only if, available income is below the define poverty line. Many countries have adopted income poverty lines to monitor progress in reducing poverty incidence. Often the cut-off poverty line is defined in terms of having enough income for a specific amount food.

2.3.2 Basic need perspective

Poverty is deprivation of material requirement for minimally acceptable fulfilment of human need, including food. This concept of deprivation goes well beyond the lack of private income. It includes the need for basic health and education and essential services that have to be provided by the community to prevent people from falling into poverty. It also recognizes the need for employment and participation

2.3.3 Capabilities perspective

Poverty represents the absence of some basic capabilities to function;-a person lacking the opportunity to achieve some minimally acceptable levels of these functioning. The functioning relevant to this analysis can vary from such physical ones as being well nourished, being adequately clothed, and sheltered and avoiding preventable mobility to more complex social achievements such as partaking in life of the community.

2.4 Poverty trends

2.4.1 Poverty trend in Ghana

Ghana’s average GDP per capita over the past decade was approximately US$300.The proportion of the population living in poverty fell steadily from 51 percent in 1992 to 39 percent in 2000.Though human development indicators have generally improved over the same period, a recent and past country wide surveys carried out by the Ghana Statistical Service (GSS, 2000) provide evidence of the poverty situation in Ghana since the early 1990’s. Poverty levels in Ghana based on income/consumption decreased from 51.7% to 39.5% between 1991/92 and 1998/99. Extreme poverty also declined from 36.5% to 26.8% over the same period. The baseline poverty rate for 2003 was about 30.7% with extreme poverty around 20%.

Poverty incidence in Ghana as a whole had dropped to about 26.9%.However, these figures tend to camouflage the incidents of growing and deepening poverty and evidence of vulnerability and exclusion among certain groups and in some areas, especially in the Northern and the Central regions, given that on the whole population growth far outstripped the rate of decline in poverty levels during the period.

Geographical disparities in poverty tends to suggest that five(5) out of the ten(10) regions in Ghana had more than 40% of their population living in poverty in 1999.According to the recent Ghana Poverty Reduction Strategy(GPRS,2002:9),the worst affected areas are the three Northern savannah regions(i.e. the Upper East, Upper West and Northern Regions).The evidence indicates that nine (9) out of ten (10) people in the Upper East, eight (8) out of ten (10) in Upper West, seven(7) out of ten(10) in Northern region and five (5) out of ten (10) in Central and Eastern Regions were classified as poor in 1999.(GPRS,2002:GSS,2000).Of the ten regions, the Upper East, Upper West, Northern and Central regions experienced increases in poverty and extreme poverty in the 1990’s.Urban areas in the Northern Savannah also experienced significant increases in poverty during the period.

The trend in the 1990’s indicates varying degrees in poverty, with the largest benefits going to export farmers and wage employees and the least to food crop farmers. 2.4.2 Poverty Situation in the Central Region The Central Region experienced increase in incidence of poverty during the 1990’s.The incidence of poverty using the upper poverty line according to GSS (2000) increased from 44.3 percent in 1991/1992 to 48.4 percent contributing 11.0 percent to national poverty in 1998/1999.Using the lower poverty line, extreme poverty increased from 24 percent in 1991/1992 to 31.5 percent in 1998/1999 (GSS, 2000).

2.4.3 Selected Welfare Indicators in the Asikuma-Odoben- Brakwa

The poverty ranking incidence of the District is described as 62 per cent, 34 per cent and 35 per cent for overall, rural and urban respectively. (GPRSII 2006).The unemployed and underemployed population in the District represent 1.9 and 2.3 percent (GSS, CWIQ 2003). The adult and youth literacy rate for the district is 41.6 percent and 60.7 per cent respectively. (GSS, CWIQ 2003).Access to primary and secondary education in 2003 was 91.4 per cent and 53.3 percent respectively.

Health access and children considered to be stunted as a result of nutritional disorder is 63.4 percent and 29.6 percent (CWIQ, 2003).2.3 percent of the population have difficulty to food needs and 80.3 per cent have access to improved water sanitation. Access of the population to water, safe sanitation, improved waste disposal and access to electricity represent 98.2 percent, 40.5 percent, 96.1 percent and 37.2 per cent respectively. (GSS, CWIQ 2003)

2.5 Measuring Poverty

The strongest justification is that provided by Lanjouw and Ravallion (1996) who argues, "a credible measure of poverty can be a powerful instrument for focusing the attention of policy makers on the living conditions of the poor." The following statements are some of the reason to measure poverty

- To allow poverty issues to appear on the political and economic agenda.
- To target interventions.
- To be able to predict the effects of, and then evaluate, policies and programs designed to help the poor.
- To help evaluate institutions and understanding the politics of many government policies.

2.5.1 Steps in measuring poverty

According to Coudouel et al. (2002), there are three main steps to be taken into consideration when measuring poverty and the following steps are as follows

i) define an indicator of welfare
ii) establish a minimum acceptable standard of that indicator to separate the poor and the non-poor (often known as the poverty line) and
iii) generate a summary statistic that aggregates the information we get from looking at the distribution of the welfare indicator that we have chosen, and its position relative to minimum acceptable standards.



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Title: Assessing Poverty Situations: A Case Study of Cocoa Farming Households in the Asikuma-Odoben Brakwa District of the Central Region