Department of Agricultural Economics and Agribusiness
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Item Consumer Preference Heterogeneity and Preference Segmentation: The Case of Ecolabeled Salmon in Danish Retail Sales(Marine Resource Economics, 2020) Ankamah-Yeboah, I.; Asche, F.; Bronnmann, J.; et al.The popularity of sustainably produced food products has grown rapidly in recent years. Ecolabels are used to indicate the environmental sustainability of products and have been implemented in the seafood market, with the leading ecolabel being that of the Marine Stewardship Council (MSC) for wild fish. However, the effect of ecolabels on consumer decision-making remains unclear regarding actual purchasing behavior. This study analyzes scanner data from a household panel in Denmark, accounting for consumer heterogeneity using random parameters and latent class logit models to identify the effect of ecolabels. The results indicate substantial consumer preference heterogeneity concerning important salmon attributes. Salmon attributes that confer convenience to household fish consumption appear to be very important in consumer choices. Ecolabeling has a significant effect on household decision-making, but the majority of consumers are more likely to choose non-labeled products, which may be due to the low availability of eco-labeled products. Five consumer segments are identified, revealing one consumer segment with a preference for organic labeled salmon, comprising 15% of households. However, a consumer segment for MSC-labeled salmon is not identified. The implication is that management can rely on a segment of consumers to implement organic principles in salmon farming, but the preference for sustainable salmon fishing is inconclusive due to uncertain confounding effects.Item Technical Efficiency Of Dry Season Vegetable Farmers And Its Implications On Households’ Food Security In The Upper East Region Of Ghana(University Of Ghana, 2020-10) Akolgo, J.A.Food and nutrition insecurity increasingly threaten the livelihoods of poor people in Northern Ghana. Most farmers turn to commercial production of vegetables during the dry season in the Upper East Region of Ghana to overcome food and nutrition insecurity challenges. However, crop yields are sub-optimal, affecting households’ income relied upon for food security. Employing survey data from dry season vegetable farmers in the Upper East Region, this study hypothesised that improving the technical efficiency of dry season vegetable farmers will increase the productivity of the farms, enhance their income and lead to the achievement of their households’ food security. This study analyzes the technical efficiency of dry season vegetable farmers and its implications on households’ food security in the region. The study adopts the Stochastic Frontier Approach (SFA), incorporating flexible risk properties to account for production risk to estimate the technical efficiency level of the vegetable farmers. Also, the study identifies production risk and technical inefficiency factors affecting the output value of vegetables; determines the gross profits of farmers producing vegetables such as pepper, onions, tomatoes and garden eggs using gross margin analysis; and examines the extent of food insecurity among vegetable farm households with the Foster-Greer-Thorbecke (FGT) and Food Security Index (FSI) frameworks. Further, it adopts the probit and ordered probit models to identify the effect of the determinants of dry season vegetable income on the households’ calorie availability and dietary diversity, respectively. A multistage sampling procedure was applied to select three hundred and twenty-two (322) dry season farmers from seven (7) irrigation districts in the region. The findings show that production risk and technical inefficiency exist in dry season vegetable production. The vegetable farms in the dry season exhibit increasing returns to scale. The results demonstrate that labour, seed and agrochemical costs decrease the output variability while fertilizer and irrigation costs increase the output variability of vegetables. The overall predicted mean technical efficiency score for dry season vegetable farms is 73%, which means 27% of the output value of the farms is lost due to production risk and technical inefficiency. The key factors that enhance the technical efficiency of dry season vegetable production are extension visits, usage of motorized pumps, gravity-fed irrigation technology and experience of the farmers. Pepper production gives the highest gross profit, followed by onions, tomatoes and garden eggs in that order. The headcount ratio of the FGT model shows that 45.7% of sampled households are food insecure. The depth and severity of food insecurity are 32.20% and 12.97%, respectively. The average per capita daily calorie availability for food secure households is 2,958kcal while that of the food insecure households is 1,670kcal, far below the mean per capita daily requirement of 2,421kcal. Higher technically efficient dry season vegetable farmers who adopt gravity-fed and motorised water pump irrigation technologies are food secure households whereas technically inefficient farmers who adopt a manual system of irrigation are food insecure. Factors such as dry season vegetable income, vegetable land size, technical efficiency positively improve the probability of achieving high households’ calorie consumption. To improve the poor dietary diversity food consumption level of farm households in the region, dry season vegetable farmers should utilise water pumps and rehabilitate existing gravity-fed irrigation infrastructure to enhance the technical efficiency and productivity of the farmers. Also, the existing fertilizer and seeds subsidies should extend to include agrochemicals to enhance the technical efficiency of farmers to increase vegetables’ output and (profit) income.Item The Effects of Outgrower Scheme on Livelihoods of Smallholder Sorghum Farmers in Northern Ghana(University Of Ghana, 2019-07) Nyaaba, C.K.K.Outgrower scheme (OGS) is widely articulated as an ideal option that can deal with subsistence farming practices of smallholder farmers (SHF) to approach their farming as a business. For OGS to attract SHF participation and lead to livelihoods enhancement, this study argues for strengthening extension services, guaranteed market and promotion of FBO formation as part of the OGS support to farmers. The study also advocates for integration of climate change mitigation services as part of the OGS package. The study combined quantitative and qualitative research methods to analyse the effects of OGS on the livelihoods of smallholder sorghum farmers in Northern Ghana. Specifically, the study examines factors influencing SHF participation in the OGS, the effects of OGS on their productivity, profitability, postharvest loss (PHL) and their vulnerability to climate change. The multistage sampling procedure was used to collect quantitative data from 516 sorghum outgrower farmers (treatment) and non-outgrower farmers (control) groups in Garu and Jirapa districts in the Upper East and Upper West regions of Ghana respectively. Using the probit regression model to determine factors influencing SHF participation in OGS, the results pointed to belonging to FBO, access to market and access to extensions services as key determinants. The study also found average productivity of 1,207kg/ha, profitability of GHS 270/ha and post-harvest losses (PHL) of 14% for the treatment group. For control group, the average productivity was 820kg/ha, profit losses of GHS 92/ha and PHL of 27%. The study further found the treatment group to be relatively vulnerable to climate change than the control group with their overall aggregate livelihood vulnerability index (LVI) of 0.393 and 0.386 respectively. (LVI closer to 1 denotes highly vulnerable). Using endogenous switching regression model (ESRM) to establish treatment effect of OGS on SHF, the results suggest positive effects of OGS on productivity, PHL and profitability of resourced endowed farmers than ordinary SHF. On vulnerability to climate change, participation in OGS have minimal effect of climate change on SHF in the study areas. To stimulate SHF participation in OGS, the study recommend improvement in market access, extension services and establishing and strengthening the existing FBOs. Finally, to help improve SHF productivity, reduce their PHL and increase their profitability, the study recommends modification of the current OGS to make it more pro-poor and also, policies that will incentivize private sector to engage SHF on OGS that are pro-poor. For OGS to become more sustainable and contribute to reducing SHF vulnerability to climate change, the study suggests inclusion of climate change support variables as part of the OGS support to farmersItem Adaptation to Climate Change: Effects of Productivity Improving Strategies on Cocoa Farmers' Livelihoods in the Central Region, Ghana.(University Of Ghana, 2019-07) Asare, K.N.The thesis assessed the capacity of cocoa farmers to adapt to climate change and adopt productivity-improving strategies. It also determines the effect of the adoption of productivity-improving strategies on farmer's livelihoods in the Central Region of Ghana. The key issues addressed in this thesis were: what are the key adaptation strategies; what is the level of farmers' capacity for adopting productivity-improving strategies (PIS); magnitudes in the factors influencing adoption of productivity-improving strategies and the effects of the adoption of PIS on enhancing their livelihoods. Semi-structured questionnaire was used to collect data from 443 cocoa farmers and 11 local institutions. The adaptation strategies known and employed by cocoa farmers were analyzed using relative frequencies. The level of adaptive capacity of farmers was estimated and the Logit model was used in analyzing the magnitudes in the factors of adopting PIS. Ordinary Least Square was used to analyze the effects of PIS on farmer's livelihoods. The results from the study showed that on-farm adaptation strategies known and employed by farmers included the use of improved hybrid seed varieties, changing planting dates as well as the application of chemical fertilizer. Although half (50%) of the farmers were categorized as having moderate adaptive capacity, many adopted the productivity-improving strategies (PIS). The most important factors influencing the adoption of PIS were age, gender, total on-farm income, institutional support, and adaptive capacity. Adoption of PIS had a positive effect on their livelihoods (income). The study recommends that local institutions (cocoa LBCs) should be encouraged to provide support in the form of training and education to improve the low capacity for the key crop management practices required to mitigate climate change resources to farmers to enhance their capacity. Institutions and stakeholders should provide support ( credit, training, and technology transfer) to enhance their adaptive capacity (assets) and also to enhance their technology adoption.Item Climate Shocks, Environmental Degradation and Resource Conflict: Implications for Agricultural Livelihoods and Food Security in Niger Delta Region of Nigeria.(University Of Ghana, 2018-12) Onyenekwe, C.S.There is an overwhelming evidence to suggest that environmental change drives conflicts, and that resource depletion and degradation undermine food security and livelihood wellbeing in communities where people are dependent on land and water resources. Therefore, understanding the vulnerability, food security, adaptation and resilience aspects of climate shocks in the context of land degradation and conflicts has immense practical significance particularly in the climate-impacted and conflict-afflicted Niger Delta region. Employing survey data collected from Rivers and Bayelsa States, this study investigates the vulnerability of the farming and fishing households to the triple challenge of climate shock, resource conflict and environmental degradation, and how these challenges undermine food security needs of various occupation groups in the Niger Delta Region of Nigeria. The study also investigated the range of adaptation practices prevalent in the region, as well as factors influencing the adoption of these adaptation strategies. Five hundred and three (503) households were selected using multi-stage sampling techniques. Ratio analysis was used to analyse the vulnerability levels of the households, ordered logit model was employed to access the effect of vulnerability on the food security status of households and multinomial logit model was used to determine factors affecting the household choice of adaptation strategies. The results show that farming and fishing households have the similar vulnerability score, 0.42 and 0.43 respectively. Although, the farming households were more exposed to the triple stressors; the fishing households seem to be more sensitive to the triple stressors owing to their poor physical and natural asset base. The two groups share similar adaptive capacity. Vulnerability to the triple stressors and having high dependency ratio increase the probability of being in the higher categories of food insecurity while household annual income, household size, access to social network, farm size and participation in non-farm work increases the probability of being food secure. Adaptation strategies adopted by farming households were soil and water management, crop management and livelihood diversification. Factors influencing their choice of adaptation strategies were age, gender, household size, education, extension and farm size. The adaptation strategies employed by the fishing households were intensification (which include use of improved fishing gears, putting more effort and time in fishing) and livelihood diversification. Factors affecting their choice of adaptation strategies were education, access to climate information, extension, household income, perception of shift in rainfall and location. To reduce food insecurity policy makers should focus on efforts that are aimed at reducing vulnerability of agricultural household to the triple stressors such as mitigation and adaptation efforts and providing opportunities for livelihood diversification. To promote the adoption of adaptation strategies among the two livelihood groups attention should focus on education, skills training and extension.Item Social Preferences For Wetland Attributes And Its Implications For Agricultural Households Wellbeing In Oueme Delta In Benin(University of Ghana, 2017-10) Hongbete, P.H.In Benin, Oueme Delta wetlands, as an ecological life support system, play a vital role in contributing to the local population’s livelihood, health and wellbeing. The paucity of knowledge about the value of the Oueme Delta wetlands and their attributes to society, especially to agricultural households undermines the ability of decision makers to develop and implement sustainable wetland use and management policies that maximize societal welfare. To fill that gap, this thesis has been undertaken to reveal to society and specifically to Benin’s wetland managers and policy makers, the value local populations attach to the Oueme Delta wetland attributes, so as to assist decision makers in the decision making process. Attribute-based discrete choice experiment (DCE) approach was used to unveil society preferences for Oueme Delta wetland attributes, from which welfare change implications were derived for agricultural households. The results and their analysis showed that the key Oueme Delta wetland attributes, ranged from the most to the least important based on their contributions to societal wellbeing are: species diversity; cropping area and irrigation facilities; recreation and tourism facilities; and wetland area and their state (habitat). More specifically, agricultural households’ welfare analysis has also indicated the same trends in terms of their preferences for the Oueme Delta wetland attributes. So, it appears that agricultural development, characterized by an increase in land use and irrigation facilities, is not the most important contributor to social welfare in Oueme Delta, rather species diversity. Moreover, the analysis of agricultural households’ welfare changes under different attribute-based wetland improvement policy scenarios reveals that there is an ever important need for policy makers to develop an integrated Oueme Delta wetland improvement policy, which might take into account both the ecological and socioeconomic values of these wetlands for local population wellbeing.Item Smallholder Farmers’ Adaptive Capacity And Choice Of Adaptation Strategies Against Weather Risks In Northern Benin(University of Ghana, 2017-09) Yves, C.Z.Understanding smallholder farmers’ behaviour in terms of adaptation to weather risks provides the means to design policies that will help farmers address weather risks and have an effective impact on farmers’ livelihoods. This study is undertaken with this perspective by analysing how smallholder farmers’ adaptive capacity affects their choice of adaptation strategies to weather risks. The research sought to, i) analyse farmers’ perceived vulnerability to weather risks, their adaptation responses and assess their perceived and adaptive capacities; ii) identify the factors that influence the choice of adaptation strategies; and iii) assess the link between farmers’ adaptive capacity and the effectiveness of their adaptation strategies. Data was collected through survey of 450 cereal farmers (maize, rice, sorghum and millet), and analysed with descriptive statistics, multinomial logit model and maximum simulated likelihood model. The results indicate that floods, drought, decreasing levels of, and increasing variability of rainfall, late onset of the rainy season are the major weather risks which farmers perceived themselves vulnerable to. Crop management, calendar management, improved seeds, irrigation and soil and water management were the adaptation strategies used, with crop and calendar management being the strategies adopted most frequently. Only 8% of farmers’ adaptation responses were to address vulnerability related to flood and drought even though they perceived themselves to be highly vulnerable to those risks. At least 60% farmers perceived that crop management, calendar management, and use of improved seeds have the potential to address weather risks compared to 25% for irrigation and 8% for soil and water management. Farmers’ adaptation intentions translated into adaptation except for improved seeds and irrigation strategies where only 38% and 32% of farmers who intended to use these strategies, respectively actually applied the strategies. On average smallholder farmers have moderate adaptive capacity to respond to weather risk except for rice farmers who have high adaptive capacity. Farmers’ adaptation intention correlate with strategies that do not require much additional investments; while estimated adaptive capacity determines the choice of strategy that require much additional investments. Other factors like age, experience, education perceived vulnerability to risks, access to credit, land tenure, access to climate information, access to extension services also affect the choice of adaptation strategies. On-farm adaptation strategies used by farmers are effective and have increased yields by about 5% to 35% depending on the strategy used. Farmers with high adaptive capacity achieved the highest impact on yields from the application of improved seed and soil, water and irrigation strategies. The findings suggest that supporting farmers to build their capacity to adapt to climate risks can be a means to reducing smallholders’ vulnerability to weather risks.Item Risk Attitudes, Risk Management And Business Success Of Micro And Small Informal Agribusiness Entrepreneurs In Ghana: The Case Of Agri-Food Processors(University of Ghana, 2017-07) Boakye, A.A.Entrepreneurs operating micro and small informal firms including agribusinesses in Ghana face many risks which adversely affect the growth of their firms and subsequent business success. Although risk management is very critical to agriculture related firms, agricultural policies in Ghana have been designed without much consideration to this important aspect of firm management. The impending ‘one-district-one-factory’ policy of the current government for example would need to consider risk management of the firms that would be involved since risk management would influence managerial decisions. The success of the policy would partly be hinged on the ability of entrepreneurs involved to manage risks in a more informed position. The aim of this study was three-pronged. First, it elicited the risk attitudes of entrepreneurs, assessed the factors that influenced the attitudes and examined how entrepreneurs perceived certain risk sources as important to the agribusiness environment in Ghana. Second, the study sought to estimate the effect of entrepreneurs’ risk management practices on agribusiness firm growth. Linear regression models were utilised in achieving these two objectives. Third, the study sought to understand the personality traits of entrepreneurs and what accounted for their business success applying the personality trait theory as attribution to business success of the entrepreneur using an ordered logit model. To elicit entrepreneurs’ risk attitudes, the psychometric theory was utilised. The Domain-Specific Risk-Taking (DOSPERT) instrument which lists hypothetical questions that elicit risk perception and risk propensity was used to elicit the risk attitudes of entrepreneurs. Risk attitude was measured as a combination of the scores from risk perception and propensity. The sample analysis utilised data from 159 entrepreneurs (owners) of micro and small firms in agri-food processing in the Greater Accra and Ashanti regions of Ghana. The results showed that about 61% of entrepreneurs were risk seeking individuals. Using a linear regression model, aged and married entrepreneurs showed more risk aversion behaviour. Education exerted no effect on risk attitudes. Male entrepreneurs were more risk seeking compared to females. Results showed that aged entrepreneurs do not give much credence to general economic/political risk as an important risk source to affect them but considered human risk (sickness and death) as important. Female entrepreneurs did not consider market risk as important enough to affect the business environment probably because they had found innovative ways in marketing and these innovations reduced the effect of market risks on their businesses. Subscription to formal insurance showed a positive and highly significant impact on firm growth. To further understand the underlying factors responsible for levels of business success achieved by entrepreneurs, their personality traits using three dimensions (locus of control, self-efficacy and motivation) were estimated. The general conclusion was that the entrepreneur’s psychological disposition has significant effects on business success. Recommendations for this study include initiation and facilitation for the development of marketing cooperatives (as a risk management tool for entrepreneurs) to negotiate fair prices to help mitigate marketing risks. Again, targeted education on the importance of subscription to insurance packages (a risk management tool which significantly and positively affected firm growth) to alert entrepreneurs of the need to insure their businesses and enjoy the inherent benefits is suggested.Item Impact Of Warehouse Receipt System On Access To Markets And Income Of Smallholder Maize Farmers In The Northern Region Of Ghana(University of Ghana, 2017-07) Safo, N.K.Smallholder farmers have limited access to credit for their farming activities due to lack of collaterals that are acceptable by formal financial institutions. The farmers sell immediately after harvest at low prices to ease their financial constraints, which consequently earn them low incomes. In order to overcome these problems, warehouse receipt system (WRS) is suggested as the best alternative scheme. The WRS in Africa however lacks legal and institutional framework to ensure its successful operation. The system is mostly used by large processors, importers and exporters to secure loans for their transactions, and it is unavailable to smallholder farmers who suffer most from financial exclusion due to lack of collateral. This thesis therefore assesses the impact of WRS on access to markets and income of smallholder maize farmers in the Northern Region of Ghana. The study specifically sought to address the following issues: the institutional arrangements of WRS in Ghana, extent of farmers’ awareness and perception of WRS, and effect of WRS on access to credit, output market and farm income. Data was collected from 400 randomly selected maize farmers in six communities in the Northern Region. Apart from descriptive statistics, endogenous switching regression model (ESRM) and propensity score matching (PSM) were employed to assess the effect of WRS on access to credit, output market, and crop income. In terms of institutional arrangements, the study identified partial legislation and slow implementation of commodity exchange market as the key limitations to successful operation of WRS. Over 80% of the farmers perceived the improved storage, market access and reduced transportation cost as the three most important benefits of WRS. The three most important WRS constraints perceived by the majority (80%) of farmers were: unfavourable condition of community warehouses, lack of insurance at community warehouses, and a few lending institutions supporting the system. About 35% of farmers participated in the WRS in 2016. Findings from both the ESRM and the PSM show that the main factors that positively affect smallholder farmers’ participation in WRS are education, farm size, level of production of maize, and membership of farmer-based organisation. Ownership of storage facility, cost of inputs, and payment of taxes reduce the possibility of participation in WRS. Participating in WRS has the potential to increase 1) amount of credit accessed by GH¢219.82 per annum, 2) quantity of maize supplied by 18%; and crop income of smallholder farmers by 13%. In order to sustain the positive impact of WRS, farmers should be encouraged to expand their farm sizes and join FBOs for consistent learning. Policy makers should facilitate the passage of “commodity exchange and warehouse receipt system bill” into law. The law and an active commodity exchange market will boost the confidence of financial institutions to support the WRS.Item Effect Of Weather Risk On Assets And Labour Allocation Decisions Among Smallholder Farm Households In Developing Countries: Evidence From Burkina Faso(University of Ghana, 2018-02) Gansonre, S.Around the developing world, poverty remains an overwhelming rural issue. Rural dwellers rely heavily on agricultural activities and related assets as main source of livelihoods. They also have widely differing capacities to combine off-farm activities in their income generation process. However, diversification makes households better-off only if it implies increased investment in high return portfolios. An important concern is that high yielding investments are either high risk or exhibit severe entry barriers. In the absence of risk markets, liquidity constrained households may pursue low risk investments to self-insure against income volatility which may create poverty. This study explores how this risk induced behaviour may lead to poverty among smallholder farm households in Burkina Faso by analysing the effect of rainfall risk on their asset holdings and attitudes towards low risk off-farm activities. Two theoretical models are developed using stochastic dynamic programming methods to highlight the mechanisms through which risk implies resource diversion towards less risk but also less profitable agricultural investments. Optimal allocation decisions appear to be determined by the relative profitability of available options which is function of the risk. This implies that consumption smoothing is indirectly pursued by smoothing returns to assets and activities. It is also shown that the household more readily enters off-farm activity as volatility of return to farming increases. Empirical analysis uses a two-year panel data collected in 2010 and 2011 in Burkina Faso. Results suggest that households accumulate liquid assets as a long-term strategy to deal with anticipated rainfall outcomes. Liquidity constraints also contribute to shape the composition of households’ portfolio as well as transaction costs. In addition to these factors, off-farm labour supply is influenced by rainfall uncertainty and rainfall shocks. However, the data suggest that productive farm assets (farm equipment and draught animals), and farming in general, have better returns than less productive liquid assets (livestock, poultry and grain stocks) and off-farm activities as the latter are less attractive to wealthier households. The tendency to accumulate increased level of liquid unproductive assets or work more off-farm will therefore result in lower income paths which may explain why poverty persists. Enabling households to accumulate more farm productive assets and work more on farm is necessary to boosting their income generation capacities. This implies addressing the rainfall risk they face. In the short-term, policies may promote groundwater pump irrigation and fodder crop cultivation to mitigate yield volatility and improve returns from livestock breeding. In the medium term, the development of a rural credit market will encourage high yielding investment directly by enabling households to overcome liquidity constraints and indirectly by enhancing ex-post risk management. Regulatory policies that improve returns to riskless options (liquid assets and off-farm work) are needed. This includes provision of veterinary care, establishment of guaranteed minimum wage and efforts to reduce transaction costs. In the long-term, a structural transformation of the farming system that lowers the reliance on rainfed farming through the development of irrigation schemes and the development of agricultural insurance and irrigation schemes may be pursued.