Ghana's

Ghana's cocoa production declined because of policies that overvalued the domestic currency and heavily taxed cocoa exports. A variable rate tax on cocoa (above the critical level) that increases and decreases with the world price would distrib-ute the price risk between cocoa farmers and the rest of society, stabilize cocoa farmers ' real incomes, and let consumers share in windfall profits when world cocoa prices are high. The Policy, Research, and Extemal Affairs Complex distributes PRE Wor'xing Papers to disserninate the findings of work in progess and to encourage the exchange of ideas among Bank suff and all others interted in development issues. These papers carry the names of the authors, reflect only their views, and should be used and cited accordingly. The findings, interpretations, and conclusions are thc authors ' own. They should not be tttnbuted to the World Banrk, its Board of Directors, its management, or any of its m rmhcr countnes Pu bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su re A ut ho riz e