Market Participation Of Smallholder Farmers In The Upper West Region Of Ghana

ABSTRACT This study assesses the levels of market participation by smallholder maize and groundnut farmers in the Upper West Region by estimating the factors that influence the probability and intensity of participating in the maize and groundnut markets and then identifying and ranking the constraints to marketing maize and groundnut. A multi stage random sampling procedure was employed to select 400 farmers (200 maize and 200 groundnut farmers) from four agricultural districts in the region. A semi-structured questionnaire was used to collect household survey data during the 2011 farming season. The Household Commercialisation Index was used to estimate the levels of market participation and the Double Hurdle Model was used to estimate the factors influencing both market participation and intensity of participation. The Garrett ranking technique was used to rank the constraints to marketing. The results indicated that about twenty-four percent and fifty-three percent of maize and groundnut respectively are sold in the region within a production year which implies low and moderate commercialisation indices for maize and groundnut respectively. The results also indicated that farmer characteristics (such as age, gender, education, household size); private assets variables (such as farm size, output, experience); public assets variables (such as credit, extension contact, price); and transaction cost variables (such as market information and point of sale) significantly influenced the probability and intensity of market participation behaviour in the region. With respect to the constraints to marketing, unfavourable market prices was the most pressing constraint faced by farmers while lack of government policy on marketing was the least constraint. The study concludes that maize is produced as a staple for household consumption while groundnut is produced as a cash crop for the market. Based on the findings, the study recommends that government through MoFA should institute productivity enhancing measures to increase the productivity of maize and groundnut as this would subsequently increase marketable surplus of farm households. It is also recommended that MoFA should establish rural finance schemes to address the credit needs of smallholders. The Statistics, Research and Information Directorate (SRID) of MoFA should create a department responsible for the delivery of agricultural market information to make market information delivery effective.