Determinants of Income of Cocoa Production Contract Systems in Cross River State, Nigeria

Background: The study is on determinants of income of cocoa (Theobroma cacao) production contract systems in Cross River State, Nigeria. Cocoa is a food and industrial crop of significant importance that has a role to play in terms of poverty reduction. Contracts are an integral part of the production of cocoa taking the form of leases, contracts for deed and contract for sharing of production. Methods: Purposive and multi-stage random sampling techniques were employed in the selection of respondents for the study. Primary data were used and collected through field survey using structured questionnaire/interview responses from cocoa producers. Data were analyzed with the use of multinomial logit regression analysis. The income of the cocoa producers was set as the dependent variable and the rest of the variables were defined as the explanatory variable. Result: Result of analyses indicated that six of the nine parameters included in the model affected the amount of income realized by owner managed producers significantly. These parameters included; age, educational level, household size, farm asset, credit, experience, membership of group, farm size and distance. The fixed rent contracts producer has the lead equation as the exponential; the significant variables were age, household size, farm asset, credit, experience and membership of group. The results for the Sharecropping contracts showed that the lead equation was also exponential, the significant variables were experience, membership, farm size and distance. Based on the result of findings, the following recommendations were made: the link between the various contract arrangements should be strengthened to improve the performance of cocoa production, young school leavers, should be encouraged to take advantage of these types of management systems to boost production.