| Summary: | This paper examines the effects of domestic producer prices of cocoa on the living standard of farmers in
and around New Juaben municipality. The producer price of cocoa is expected to influence Ghanaian
cocoa farmers to increase production. On the other hand, available figures of cocoa production show a
downward trend since the ERP. The implications are that government revenue is severely affected. In
addition, farmers’ income is also seriously affected since reduced production means reduced income. In
the light of these developments this work aims to find out the effect of producer prices on the living
standard of farmers, and its change over time from 1970-2012. The study selected 70 farmers from Oyoko,
Jumapo, Suhyen, Effiduase and Koforidua to solicit information from them. A purposive sampling
method was adopted since it was difficult to locate some of the farmers. The sample frame was collected
from buying agencies in the communities selected. From the regression result, it was observed that all the
variables except the ages of the farmers were found to be significant predictors of the living standards of
farmers. Some have their living standards improved while others are struggling to make life. This work
gives the following suggestions; that taxes on cocoa production should vary in accordance with
production level; that pricing of cocoa must be allowed to fluctuate; farmers must have a stake in
deciding the producer price. Implementation of these suggestions will save Ghana from cocoa smuggling
to other neighbouring countries.
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