Abstract:
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 farmers
