John K. M. Kuwornu

Agricultural Credit Allocation and Constraint Analyses of Selected Maize Farmers in Ghana

The study analyzes factors influencing agricultural credit allocation and constraint condition of maize farmers in the Upper-Manya Krobo District in the Eastern region of Ghana. The study uses primary data solicited from 130 maize farmers through the administration of a structured questionnaire. Using the paired sample t-test to test for significant differences between the amounts of credit demanded and the amount received by farmers, it is revealed that the amount of credit received was significantly lower than the amount of credit demanded by farmers. The Probit regression model was then used to estimate the parameters of the determinants of credit constraint condition of the farmers. The empirical results reveal that gender, household size of farmers, annual income of farmers and farm size have significant influence on credit constraint conditions of the farmers. The Tobit regression model was also used to estimate the parameters of the determinants of the rate of agricultural credit allocated to the farm sector. The empirical results of the Tobit regression model reveal that age, bank visits before credit acquisition and the amount (size) of credit received have significant influence on the rate of agricultural credit allocation to the farm sector. The study provides the following recommendations: it is imperative that bank officials visit farmers on their farms before granting them loans, and also farmers must be granted the required amounts of loan to enhance the rate of agricultural loan allocation to the farm sector to ensure increased productivity of crops grown for increased welfare and livelihood of these farmers and the citizens of the country as a whole. Research Article British Journal of Economics, Management & Trade, 2(4): 353-374, 2012 354

Agency Problem and Hedging in Agri-Food Chains: Model and Application

The last 4 decades have seen the transformation of food supply chains from being supply driven to becoming much more closely integrated with consumer demand. With this development, the transaction mechanism in food marketing channels has changed from an open-market mechanism to coordination through the use of contract-supply arrangements between farmers and food processors and retailers. In this article, we assess the interaction of marketing channel members through the use of contracts and its impact on incentives, coordination costs, risk aversion, risk allocation, and risk management strategies. For this purpose we specify a 3-stage principal-agent supply chain model involving producers, wholesalers, retailers, and a futures market. We compare the situation with and without a futures market. The empirical results regarding the Dutch ware potato marketing channel during 1971 to 2003 reveal that as a result of increases in incentives to producers and wholesalers, the coordination costs of the marketing channel decreased significantly, both with and without futures trade. The coordination costs of the marketing channel in the case with a futures market appear to be lower than without futures, demonstrating the informational (i.e., price discovery) role of futures markets.

Determinants of Choice of Indigenous Climate Related Strategies by Smallholder Farmers in Northern Ghana

This study assessed the determinants of Choice of Indigenous Climate Related Strategies by Smallholder Farmers in Northern Ghana using primary data obtained through community focus group discussions and household survey, and subjected to the Multinomial Logit regression model. The empirical results reveal that presence of a market, informal credit from friends and relatives, location of farmer, farmer-to-farmer extension, noticing of a decrease in rainfall and noticing an increase in temperature influence the choice of indigenous climate related strategies. There is therefore the need to improve smallholder farmers’ access to market, agricultural extension services and their awareness of changes in rainfall and temperature.

What Influences Farmers' Choice of Indigenous Adaptation Strategies for Agrobiodiversity Loss in Northern Ghana?

Heavy dependence on the natural environment for agricultural production in northern Ghana adversely affects the availability of agrobiodiversity and in turn household livelihoods. Farmers have over the years developed strategies for adapting to reduction in agrobiodiversity but the extent of adoption varies among farmers. This study used the multinomial logit model to determine the factors influencing farmers’ choice of indigenous adaptation strategies in response to agrobiodiversity loss in northern Ghana. The analysis is based on a sample of 310 farmers drawn from 31 communities in northern Ghana. The factors that positively influence the choice include household head’s sex, farming experience, radio ownership, household size, borrowing credit and awareness of reduction in crop diversity. On the other hand, age, education, farm size, awareness of climate change, farm cash income and existence of market in community, negatively influence choice of strategies. Furthermore, farmer to farmer extension and off-farm income influence adoption either positively or negatively with respect to the adoption option in question. Thus, to encourage adaptation and conservation mechanisms, policies should strengthen farmer based organizations and promote education on the sustainable use of the natural environment. Government policies must also enhance access to offfarm income generating activities.

Willingness to participate in micro pension schemes: Evidence from the informal sector in Ghana

Market and state based pension schemes in Ghana tends to be better adapted to formal conditions and this limits the participation of majority of the populace especially those in the informal sector of the economy. In cases where “an all inclusive” schemes are developed, no special consideration is made to better integrate low income earners or workers in the informal sector into such pension schemes. Informal workers and their respective households run high risks of falling into old age income insecurity trap. However, long term savings products like micro pensions which is a rather new concept has been developed to bridge the gap and inefficiencies in the open market and state based pension’s schemes in providing old age income security for low income earners. The study was a hypothetical exploratory research to identify underlying factors explaining four urban informal groups (beauticians, drivers, vegetable farmers and woodworkers) decision to participate in a Micro Pension Scheme. A Binary Logit regression model was subsequently used to estimate the factors influencing the participation decision. The survey found a high (87.75%) willingness to participate among the urban informal workers. The empirical results of the Binary Logit model reveal that socioeconomic variables including age, years of schooling, marital status, household size and health status, other income sources, assets, investments, and taxes/levies were important in explaining the decision of an urban informal worker to participate. At the individual economic activity level, having a driving license or being a private mini-bus transport driver or taxi driver has a negative influence on willingness of drivers to participate. In the case of vegetable farmers, location of production as well as rearing livestock alongside crop production also has a negative influence on participation. Further, the results indicate that the woodworker producing for the local market has a positive influence on a woodworkers’ willingness to participate in the scheme. These results have policy implications for the development and the design of Micro Pension Schemes for the informal sectors in developing countries

Assessment of farm households' willingness to participate in reforestation projects in Ghana: implications for policy.

This study examines the socioeconomic factors that influence farmers’ willingness to accept monetary compensation to engage in tree planting and to evaluate realistic payment of incentives. Contingent Valuation method was employed to elicit bids levels of 200 farm households in Ghana. The empirical results of a Generalized Linear Model reveal that age of the household head, household size, education, perception to climate change, distance to the farmland, farm size, offfarm work and quantity of maize sold annually significantly influenced households’ decision to accept compensation to engage in tree planting activities. These results have implications for forest management in developing countries.

Salvaging mortgage loans and land title redemption with revolving funds in Thailand

Purpose - The purpose of this paper is to investigate the performance of the revolving fund (RF) regarding the ability of smallholder debtors to retrieve land title deeds, and also to examine the factors influencing the outstanding debts and percentage of outstanding interest of the smallholders in the Central and Northeastern regions of Thailand. Design/methodology/approach - Primary data were collected from 430 debtors in the Central and Northeastern regions of Thailand in order to compare the differences in livelihood assets as well as their opinions on benefits derived from the operation of the RF. Secondary data were also collected from the RF administration, in order to evaluate the effectiveness and efficiency of the fund. Heteroskedasticity-corrected ordinary least squares and Tobit regression models were employed to examine the factors influencing the outstanding debts and percentage of outstanding interest of the smallholders, respectively. Furthermore, the student’s Findings - The empirical results revealed that the RF is effective as the fund could provide loan to smallholders to enable them redeem their land title deeds from their previous creditors. The Practical implications - It is imperative to intensify information and education regarding the regulations, payment terms and modalities to clients in order to facilitate repayments of the loans disbursed. The organization of the RF should pay particular attention to the role of the committees involved, information administration and loan repayment monitoring. The RF should increase the frequency of meetings with smallholders, minimize the influence of third parties and give priority to old and experienced smallholders who possess land with high potential for earning incomes to enable them repay the loans. Originality/value - To the best of the authors’ knowledge, this is the first study that examined the effectiveness of the RF to enable smallholders retrieve their land title deeds.

Credit constraints and labour allocation decisions in rural Burkina Faso

Purpose - Credit is central in labour allocation decisions in smallholder agriculture in developing countries. The purpose of this paper is to analyse the effect of credit constraints on farm households’ labour allocation decisions in rural Burkina Faso. Design/methodology/approach - The study used a direct elicitation approach of credit constraints and applied a farm household model to categorize households into four labour market participation regimes. A joint estimation of both the multinomial logit model and probit model was applied on survey data from Burkina Faso to assess the effect of credit constraint on the probability of choosing one of the four alternatives. Findings - The results of the probit model showed that households’ endowment of livestock, access to news, and membership to an farmer-based organization were factors lowering the probability of being credit constrained in rural Burkina Faso. The multinomial logit model results showed that credit constraints negatively influenced the likelihood of a farm household to use hired labour in agricultural production and perhaps more importantly it induces farm households to hire out labour off farm. The results also showed that the other components of household characteristics and farm attributes are important factors determining the relative probability of selecting a particular labour market participation regime. Social implications - Facilitating access to credit in rural Burkina Faso can encourage farm households to use hired labour in agricultural production and thereby positively impacting farm productivity and relieving unemployment pressures. Originality/value - In order to identify the effect of credit constraints on farm households’ labour decisions, this study examined farm households’ decisions of hiring on-farm labour, supplying labour off-farm or simultaneously hiring on-farm labour and supplying family labour off-farm under credit constraints using the direct elicitation approach of credit constraints. To the best of the authors’ knowledge, this study is the first to examine this problem in Burkina Faso.

Off-farm work and food security status of farming households in Ghana

ABSTRACT This study assessed the effect of participation in off-farm work on the food security status of farming households in the Northern Region of Ghana. Primary data were solicited from 324 farming households in the Tamale metropolis and Tolon district using semi-structured questionnaires. The treatment effects of both income and food security status were estimated using propensity score matching and double-robust methods. The empirical results suggest that participation in off-farm activities increased household daily calorie consumption. These results have implications for the development of off-farm ventures for the benefit of the farming households.

Smallholder Farmers’ Preferences for Improved Cocoa Technologies in Ghana

The cocoa (Theobroma cocoa Linn.) is the main foreign exchange earner and the backbone of the Ghanaian economy. However, over the years the production levels begun to dwindle and in the attempt to resuscitate the industry, the government introduced a technology package and social intervention to address it. The technology package consists of 25 unique attributes (classes of characteristics or components), of which some farmers adopted test part of it and left out others. The study seeks to determine socioeconomic factors influencing farmers’ choice decision process and preferences for attributes of the technology packages. The results from the multinomial logit regression model revealed that availability of labour, gender, farm size, age of the cocoa farm, years of cocoa farm ownership and number of cocoa bags harvested per annum are the key Original Research Article Danquah et al.; BJAST, 5(2): 150-165, 2015; Article no.BJAST.2015.015 151 variables influencing farmers’ choices. Moreover, farmers who have long experience in cocoa cultivation and have had some form of training on the technology packages have high probability to adopt entire categories or classes of the technology package. Thus, institutional policy arrangement which emphasizes on training and targeting experience farmers will go a long way to enhance production level in the country.