Livelihoods Diversification of Fair Trade Cocoa Farmers: Portfolio, Extent, Reasons and Drivers
We contribute to the rural livelihood literature by assessing the livelihood diversification of Fair Trade cocoa farmers and application of fractional regression in modelling the drivers of livelihood diversification. Using data on 238 Fair Trade cocoa farm households in the Eastern Region of Ghana, we identified the portfolio of livelihoods of cocoa farming households, assessed the extent of their diversification and identified reasons for and drivers of livelihood diversification. Cocoa farm households diversified largely within agriculture with Simpson index of 0.44. Seeking seasonal wage opportunities, educating children so they can obtain non-farm jobs, loss of access to land and loss of ability to do strenuous work, were some of the reasons for diversification. These were largely out of choice rather than necessity. Ownership of land, size of cocoa farm and age of cocoa farm, drives Fair Trade cocoa farm households to diversify into other livelihoods. Polices that enhance land ownership does not only enhance owning land as an asset but
is an important driver of livelihood diversification.
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