Green Finance and Sustainable Cocoa Production in Ghana: The Role of Farmers’ Living Income

This study examines the connection between green finance and sustainable cocoa farming in Ghana, emphasising the mediating role of farmers’ living income in the relationship. The study aimed to comprehend better how green finance supports sustainable cocoa production and whether it depends on farmers’ living income. Through such interaction, the research sheds light on how finance, economic equity, and environmental sustainability work in Ghana’s cocoa industry. This sector is crucial to the country’s economy and a significant contributor to global cocoa production. This study used a mixed-method approach using qualitative and quantitative research methodologies. The study sampled 412 participants, of whom 388 participated in the quantitative study and 24 participated in focus group discussions. The study found a moderate positive relationship (CFA Estimate = 0.335; CR 7.15) between green finance and sustainable cocoa production. In addition, the study found that farmers’ living income had a moderately positive effect on green finance (CFA Estimate = 0.407; CR 7.62) and a strong positive impact on sustainable cocoa production (CFA Estimate = 0.716; CR 10.66). The results underscore the importance of green finance in sustainable cocoa production and the need to enhance farmers’ living incomes to ensure green financing initiatives are effective. The results also suggest the need for better green finance policies and specialised incentives, like government-backed low-interest loans and tax incentives for farmers who adopt sustainable farming. The study was limited as it only considered green finance and focused only on smallholder cocoa farmers. Other considerations for future studies regarding sustainable cocoa production would be access to markets, technological innovation, and general environmental policy. The study recommends that the government provide government-backed, sustainable green financing, such as low interest rates for cocoa farmers and tax incentives for farmers who adopt green cocoa farming practices. Policymakers and stakeholders in Ghana should also prioritise inclusive and accessible green finance pathways for sustainable cocoa cultivation. This combination of financial and environmental interests, as well as farmers’ economic well-being, suggests a path to long-term sustainability and fairness in the cocoa industry. In conclusion, businesses in Ghana’s sustainability finance and cocoa-growing sector with access to eco-loans can use such resources in ways other companies that do not have eco-loans cannot. The study concludes that although Ghanaian cocoa farmers generally had a fair understanding of what green finance was about and understood the benefits that could be derived from it, the incentives available, and government initiatives, the actual adoption remains low due to numerous key challenges. The study further concludes that green finance and farmers’ living income significantly and positively influence sustainable cocoa farming. Finally, the study concludes that there are significant positive relationships among green finance, sustainable cocoa farming, and farmers’ living income.