Examine two ways, apart from Fairtrade schemes, in which cocoa farmers could boost their incomes despite the falling price of cocoa

Edexcel A-Level Economics Paper 2 June 2020 Extract

Examine two ways, apart from Fairtrade schemes, in which cocoa farmers could boost their incomes despite the falling price of cocoa. (8 marks)

Farmers can invest in machinery. Extract A mentioned that cocoa prices fell by a third and that farmers had 'fragile' incomes. To make up for falling prices, better machinery can increase farmers' productivity meaning that farmers can produce more output per hour, since machinery and capital like tractors can allow them to complete tasks faster. This allows them to sell more output and earn more income.

However, this will cause an increase in the supply of cocoa, which might decrease prices even further.

Secondly, farmers can diversify their products. If they are able to grow different agriculture, they can have more stable revenue even if the price of one product like cocoa falls. 54% of Ivory Coast's exports are cocoa related but if they were able to produce more oil, which shows that farmers are heavily dependent on it.

However, farmers may find it expensive to produce more stock, as this might require training, or more land or more materials.

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