Risk Management and Socioeconomic Drivers  of Crop Productivity in Ghana

Dexter Senanu Kofi Hewlett; Evans Tee; Kojo Essel-Mensah; Charles Adzagbre

doi:10.47747/ijbme.v6i1.2655

Authors

Dexter Senanu Kofi Hewlett Accra Institute of Technology
Evans Tee University of Professional studies Accra
Prof, Amonkwandoh University of the Free State, South Africa
Charles Adzagbre KAAF University College, Accra

DOI:

https://doi.org/10.47747/ijbme.v6i1.2655

Keywords:

Agricultural Productivity, Smallholder Farmers, Risk Management, Irrigation, Mixed Cropping, Education, Ghana

Abstract

This study explores the impact of risk management strategies and socioeconomic factors on crop productivity among smallholder farmers in Ghana. Utilising a cross-sectional survey design, data were gathered from 4,065,095 agricultural households, as reported by the Ghana Census of Agriculture (2018). The sampling frame, derived from the 37,657 Enumeration Areas defined by the Ghana Statistical Service (GSS), provided a systematic approach for identifying the target population. Key variables include crop productivity (measured in kilograms per hectare), socioeconomic factors (education levels, marital status, and gender), agricultural practices (plot size, mixed cropping, and irrigation), and economic and demographic factors (labour costs, hours of work, average market price of crops, and age). The findings reveal that educational attainment at basic and medium levels significantly enhances crop productivity, while higher education levels do not show direct benefits. Mixed cropping and irrigation practices are shown to significantly increase productivity, underscoring their importance in agricultural risk management. Larger plot sizes demonstrate economies of scale, contributing to higher productivity. Sociodemographic factors such as marital status and gender influence productivity, with male and married farmers achieving higher yields. Labour and input costs are critical determinants of productivity, highlighting the financial risks inherent in farming. The study emphasizes the need for integrated policies that incorporate agricultural insurance, education, financial services, and sustainable farming techniques to build a resilient agricultural industry in Ghana. These findings highlight the potential for agricultural insurance and risk management measures to reduce vulnerabilities and improve sustainability.

Downloads

Download data is not yet available.

Author Biographies

Evans Tee, University of Professional studies Accra

^bDepartment of Economics and Actuarial Science, University of Professional Studies, Accra, Ghana,

Prof, Amonkwandoh, University of the Free State, South Africa

^cDepartment of Mathematical Statistics and Actuarial science, University of the Free State, South Africa,

Charles Adzagbre, KAAF University College, Accra

Department of Finance

References

Abaidoo, R., Agyapong, E. K. (2024). Commodity price volatility, risk exposure and development of financial institutions. International Journal of Emerging Markets, 19(11), 4132-4154. https://doi.org/10.1108/IJOEM-10-2021-1629

Acheampong, K., Boateng, K. S., & Asante, F. (2024). The role of digital finance in smallholder agricultural productivity: Evidence from Ghana. Agricultural Finance Review, 84(1), 45-62. https://doi.org/10.1108/AFR-2023-0124.

Adjimoti, G. O., & Kwadzo, G. T. M. (2024). Input price volatility and agricultural productivity: Insights from West African smallholder farmers. Journal of Agricultural Economics, 75(2), 311-330. https://doi.org/10.1111/1477-9552.12506.

Ali, S., Rahman, S., & Khan, M. T. (2024). Access to credit and adoption of mechanisation in smallholder farming: Evidence from South Asia. World Development, 173, 106215. https://doi.org/10.1016/j.worlddev.2024.106215.

Antwi-Agyei, P., Fraser, E. D., Dougill, A. J., Stringer, L. C., & Simelton, E. (2012). Mapping the vulnerability of crop production to drought in Ghana using rainfall, yield, and socioeconomic data. Applied Geography, 32, 324–334. https://doi.org /10.1016 /j.apgeog . 2 0 11.06.010.

Asiedu, E., Ansah, N. K. O., Boakye, A. N., & Malcalm, E. (2024). Financial Performance of Private Pension Funds in Ghana: The Effect of Risk Management. Journal of Financial Risk Management, 13(2), 376-395. https://doi.org/10.4236/jfrm.2024.13201.

Badstue, L., Petesch, P., & Hailemariam, M. (2021). Women Farmers and Agricultural Innovation: Marital Status and Normative Expectations in Rural Ethiopia. Sustainability, 13(4), 1-17. https://doi.org/10.3390/su13041556.

Baffour-Ata F, Atta-Aidoo J, Said RO, Nkrumah V, Atuyigi S, Analima SM. (2023). Building the resilience of smallholder farmers to climate variability: Using climate-smart agriculture in Bono East Region, Ghana. Heliyon. 4;9(11):e21815. doi: 10.1016/j.heliyon.2023.e21815.

Barrett, C. B. (2008). Smallholder market participation: Concepts and evidence from eastern and southern Africa. Food Policy, 33(4), 299-317. https://doi.org/10.1016/j.f oodpol.2007.10.005.

Boakye, A. A., Ankrah, D. A., Agyei-Holmes, A., Baidoo, I., & Sarpong, D. B. (2024). Indigenous risk management practices and their effects on small agribusiness firm growth amid economic crisis in Ghana. Scientific African, 23(1), e02095. DOI: 10.1016/j.sciaf.2024.e02095.

Bryman, A. (2016). Social Research Methods (5th ed.). Oxford University Press.

Carter, M. R., de Janvry, A., Sadoulet, E., & Sarris, A. (2017). Index insurance for developing country agriculture: A reassessment. Annual Review of Resource Economics, 9(1), 421–438. https://doi.org/10.1146/annurev-resource-100516-053352

Cervantes-Godoy, D., Kimura, S., & Antón, J. (2013). Smallholder Risk Management in Developing Countries. OECD Food, Agriculture and Fisheries Papers, No. 61, OECD

Publishing, Paris. http://dx.doi.org/10.1787/5k452k28wljl-en.

Clarke, D., & Dercon, S. (2016). Dull Disasters? How Planning Ahead Will Make a Difference. Oxford University Press.

Creswell, J. W. (2014). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches (4th ed.). SAGE Publications.

Danso-Abbeam, G., Ehiakpor, D.S. & Aidoo, R. (2018). Agricultural extension and its effects on farm productivity and income: insight from Northern Ghana. Agric & Food Secur 7, 74. https://doi.org/10.1186/s40066-018-0225-x.

Danso-Abbeam, G., Ojo, T. O., Baiyegunhi, L. J. S., & Ogundeji, A. A. (2021). Climate change adaptation strategies by smallholder farmers in Nigeria: Does non-farm employment play any role? Heliyon, 7(6), e07162. https://doi.org/10.1016/j.heliyon.2021.e07162

Dercon, S., & Christiaensen, L. (2011). Consumption risk, technology adoption, and poverty traps: Evidence from Ethiopia. Journal of Development Economics, 96(2), 159–173. https://doi.org/10.1016/j.jdeveco.2010.08.003.

Doss, C. (2018). Women and agricultural productivity: Reframing the issues. Development Policy Review, 36(1), 35-50. DOI: 10.1111/dpr.12243

Doss, C. R. (2006). Analysing technology adoption using microstudies: Limitations, challenges, and opportunities for improvement. Agricultural Economics, 34(3), 207–219. https://doi.org/10.1111/j.1574-0864.2006.00119.x.

Ellis, F. (2000). Rural Livelihoods and Diversity in Developing Countries. Oxford: Oxford University Press.

Fafchamps, M., & Quisumbing, A. R. (2005). Assets at marriage in rural Ethiopia. Journal of Development Economics, 77(1), 1-25. https://doi.org/10.1016/j.jdeveco.2004.02.002

Fafchamps, M., & Quisumbing, A. R. (2007). Household formation and marriage markets in rural areas. In T. P. Schultz & J. A. Strauss (Eds.), Handbook of Development Economics (Vol. 4, pp. 3187-3247). Elsevier. https://doi.org/10.1016/S1573-4471(07)04051-X

Feder, G., Birner, R., & Deininger, K. (2019). Agricultural extension and productivity: How research and extension improve agricultural outcomes. Journal of Development Studies, 55(2), 268-283. https://doi.org/10.1080/00220388.2018.1452133.

Ferreira, V., Almazán-Gómez, M. Á., Nechifor, V., & Ferrari, E. (2022). The role of the agricultural sector in Ghanaian development: a multiregional SAM-based analysis. Journal of Economic Structures, 11(1), 6. https://doi.org/10.1186/s40008-022-00265-9.

Food and Agriculture Organization (FAO). (2021). The state of food and agriculture: Building resilience in agriculture. Rome: Food and Agriculture Organization. Retrieved from https://www.fao.org/state-of-food-agriculture.

Ghana Statistical Service (GSS). (2020). Ghana Census of Agriculture 2017/18. Retrieved from https://statsghana.gov.gh/gssmain/fileUpload/pressrelease/Final%20Report%2011%2011%202020%20printed%20version.pdf.

Gyimah, A. , Bagbohouna, M. , Sanogo, N. and Gibba, A. (2020) Climate Change Adaptation among Smallholder Farmers: Evidence from Ghana. Atmospheric and Climate Sciences, 10, 614-638. doi: 10.4236/acs.2020.104032.

Hardaker, J. B., Huirne, R. B. M., Anderson, J. R., & Lien, G. (2004). Coping with risk in agriculture. CABI Publishing.

Hosmer, D. W., & Lemeshow, S. (2013). Applied Logistic Regression (3rd ed.). Wiley-Interscience.

IPCC. (2021). Climate change impacts on agriculture. In Sixth Assessment Report. Geneva, Switzerland: Intergovernmental Panel on Climate Change. https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6_WGI_FullReport.pdf

Maddison, D. (2007). The perception of and adaptation to climate change in Africa. World Bank Policy Research Working Paper No. 4308. https://hdl.handle.net/10986/7507.

Mahul, O., & Stutley, C. (2010). Government Support to Agricultural Insurance: Challenges and Options for Developing Countries. Washington, DC: World Bank.

McKinsey & Company. (2024). Global Farmer Insights 2024. Retrieved from https://www.mckinsey.com/industries/agriculture/our-insights/global-farmer-insights-2024.

Ministry of Food and Agriculture. (2021). Annual report on Ghana’s agricultural sector. Accra, Ghana.https://mofep.gov.gh/sites/default/files/pbb-estimates/2021/2021-PBB-MOFA.pdf.

Moomen, A. W., Yevugah, L. L., Boakye, L., Osei, J. D., & Muthoni, F. (2024). Review of applications of remote sensing towards sustainable agriculture in the Northern Savannah regions of Ghana. Agriculture, 14(4), 546. https://doi.org/10.3390/agriculture14040546.

Moschini, G., & Hennessy, D. A. (2001). Uncertainty, risk aversion, and risk management for agricultural producers. Handbook of Agricultural Economics, 1, 87–153. Retrieved from https://econpapers.repec.org/scripts/redir.pf?u=https%3A%2F%2Fwww.mdpi.com%2F2077-0472%2F10%2F8%2F351%2Fpdf;h=repec:gam:jagris:v:10:y:2020:i:8:p:351-:d:398123.

Nyantakyi-Frimpong, H., P. Matouš, and M. E. Isaac, 2019. Smallholder farmers’ social networks and resource-conserving agriculture in Ghana: a multicase comparison using exponential random graph models. Ecology and Society 24(1):5. https://doi. org/10.5751/ES-10623-240105.

Olawuyi, S.O., Ijila, O.J., Adegbite, A., et al. (2024). Smallholder Farmers’ Use of Indigenous Knowledge Practices in Agri-food Systems: Contribution of Food Security Attainment Drive. Research on World Agricultural Economy. 5(2): 45–67. DOI: https://doi.org/10.36956/rwae.v5i2.1056.

Owusu, V., Abdulai, A., & Abdul-Rahman, S. (2011). Non-farm work and food security among farm households in Northern Ghana. Food Policy, 36(2), 108–118. https: //do i.org /10.1 016/j.f oodp ol.2010.09.002.

Phiri, S. (2018). The role of climate change in shaping agricultural productivity in sub-Saharan Africa: A case study of Zimbabwe. Retrieved from https://ageconsearch.umn.edu/record/276455/files/Shakira%20Phiri%20Final%20research%20-%20%20April%202018.pdf.

Prah, S., Asante, B. O., Aidoo, R., Mensah, J. O., & Nimoh, F. (2023). Impact of agricultural policy intervention on yield and profitability of maize farmers: The case of Planting for Food and Jobs (PFJ) programme in Ghana. Cogent Food & Agriculture, 9(1), 2249928. https://doi.org/10.1080/23311932.2023.2249928.

Rogers, E. M. (1962). Diffusion of Innovations. Free Press.

Salifu, G. A. N., & Salifu, Z. (2024). The political economy of income diversification and food security in Northern Ghana. Cogent Food & Agriculture, 10(1), 2325205. https://doi.org/10.1080/23311932.2024.2325205.

Sapbamrer, R., et al. (2024). Socio-demographic, agricultural, and personal protective factors in health literacy among farmers in Thailand. Frontiers in Public Health, 12, 1364296. https://doi.org/10.3389/fpubh.2024.1364296.

Saunders, M., Lewis, P., & Thornhill, A. (2016). Research Methods for Business Students (7th ed.). Pearson Education.

Schlenker, W., & Lobell, D. B. (2010). Robust negative impacts of climate change on African agriculture. Environmental Research Letters, 5(1), 014010. https://doi.org/10.1088/1748-9326/5/1/014010.

Sutherland, L. A. (2015). The impact of agricultural policy on farm productivity: Evidence from the UK. Agricultural Economics, 46(2), 235-247. https://doi.org/10.1111/agec.12152.

Vigani, M. & Kathage, J. (2019). Risk Management Impacts on Productivity. American Journal of Agricultural Economics, 101(5), 1432–1454. Retrieved from https://agribusiness.purdue.edu/2019/12/11/risk-management-impacts-on-productivity.

World Bank. (2019). Climate resilience in sub-Saharan African agriculture. Washington, DC: World Bank Group.

World Bank. (2022). Agricultural Resilience and Economic Growth in Ghana. Washington, DC: World Bank Group.

Zhang, X., Fang, S., & Bai, Z. (2015). Impact of irrigation on agricultural productivity in arid regions of China. Agricultural Water Management, 160, 111-118. https://doi.org/10.1016/j.agwat.2015.06.017.