Global Journal of Pure and Applied Sciences

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Economic impact of climate change on cocoa production among South-Western states, Nigeria: Results from ricardian analysis

Edet E.O, P.O Udoe, S.O Abang


The study was carried out to determine the economic impact of climate change on cocoa producing states in south western states, Nigeria using Ricardian analytical procedure. The specific objectives were to: analyze the economic impact of climate change on cocoa production, estimate the marginal impact of climate change on net cocoa farm revenue in the areas of study, find out whether there is a significant mean difference in climatic variables among the cocoa producing states in the south-west Nigeria and make useful recommendations based on findings. Data were sourced from CBN bulletin, Federal Ministry of Agriculture and Nigeria Meteorological Agency (NIMET), spanning 1981 - 2015. Model specification was based on Ordinary Least Square (OLS) multiple regression technique using Ricardian framework on net revenue. Data obtained were analyzed using both descriptive and inferential statistics. Results show that 11, 47 and 77% of the variations in net revenue from cocoa production were explained by rainfall and temperature for Oyo, Ondo and Osun states respectively. The study also affirms that the climatic (rainfall and temperature) and non climatic (area, producer price, yield and technology) variables accounts for 98%, 97% and 96% of the variations in net revenue per hectare of cocoa production respectively in Oyo, Ondo and Osun states. The study further showed that there was a significant difference in climate change over time across the cocoa producing states at 1% level of probability. The study indicated that climatic changes culminated in economic losses/benefits of about ₦27.63million (₦3.50million), ₦5.6million (₦14.90million) and ₦1.3million (₦5.8million) respectively across the states amidst varying marginal economic losses of ₦1billion (Ondo) and benefits of ₦10.08 and ₦270.48million (Oyo and Osun States) in the study area. Based on these, it was concluded that climatic changes over time are not the only parameters that accounted for economic losses and benefits, other factors also contributed. It was recommended that low-yielding cocoa trees, which have exceeded optimum production ages be replaced with the high-yielding ones alongside farmers should cultivate cocoa varieties that are tolerant to climate change in the area of consideration, ab initio.

Keywords: Climate change, Cocoa, Ricardian, Production, Economic impact.

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