Effects Of Commercialization On The Welfare Of Smallholder Rice Farmers In The Builsa South District Of Ghana

Abstract

ABSTRACT This study analyzed the level and determinants of rice commercialization among smallholder farmers in the Builsa South District of Ghana. The study also estimated the effect of rice commercialization on the welfare of the farmers in the study area. The study used primary data collected using a semi-structured questionnaire from a random sample of 384 smallholder rice farmers. The level of rice commercialization was calculated using the Household Commercialization index. The Double Hurdle Model was used to analyze the determinants of rice commercialization. Also, the effect of commercialization on the welfare of farmers (annual household expenditure and household income used as proxy) was analyzed using the Heckman Treatment Effect model. The mean Household Commercialization Index was 50.54%, showing a moderate level of rice commercialization in the study area. The study found that, farmer’s decision to commercialize was significantly and positively influenced by access to market information, availability of buyers and size of rice farm, while negatively influenced by marital status and access to remittances. The intensity of commercialization was significantly and positively influenced by size of rice farm, ownership of means of transport and price of rice output, while negatively influenced by sex of household head and rice farming experience. Welfare of the household was found to be significantly and positively influenced by the level of commercialization of a household. The study recommends that, farmers form a trade union that will facilitate their trade, protect their common interest and link them to more profitable and organized markets. Also, the study recommends that farmer groups should form a private/public partnership with government to establish a rice processing factory to add value to rice produced in the district for sale in high end markets. Again, MoFA should extend its current portfolio of services to include marketing services and timely dissemination of market information through the local media in the district.