Farm Households’ Agricultural Commercialisation, and Food and Nutrition Security in Ghana

Abstract

Previous studies have provided valuable evidence to guide and shape policies to improve agricultural commercialisation. However, there are still lingering challenges globally with respect to the scope and measurement of agricultural commercialisation, as well as its impact on food and nutrition security. The purpose of this thesis is to contribute new evidence by developing and estimating the determinants of an extended metric of agricultural commercialisation that captures crop and livestock dimensions of commercialisation (named household crop-livestock commercialisation index). It also estimated the impact of this extended metric on various food and nutrition security outcomes and developed and estimated a quadruple-hurdle model of commercialisation as an extension of the triple-hurdle model. Secondary data involving 14,009 households from the Ghana Living Standards Survey round 7 (GLSS7) collected by the Ghana Statistical Service were used to achieve the objectives of this study. To validate findings, primary data were collected from 858 farm households in northern Ghana. The extended metric, household crop and household livestock commercialisation indices were used to estimate the level of commercialisation. Fractional regression was applied to estimate the determinants of the extended metric of commercialisation. In estimating the impact of commercialisation on food and nutrition security outcomes, instrumental variable (IV) approaches were used to account for endogeneity and selectivity of commercialisation, while conditional mixed process was applied to estimate the quadruple-hurdle model. The estimate of the level of commercialisation indicates surplus-oriented agriculture for the crop-livestock metric (26.44%) and crop metric (35.20%), but subsistent-oriented agriculture for the livestock metric (10.94%). The main determinants of the extended metric of agricultural commercialisation are ownership of nonfarm enterprise, bank and agricultural cooperative in community, number of crops cultivated, agricultural land endowment, presence of community market, navigable road to community and access to public transport. Therefore, infrastructure, institutional and production scale variables are vital in boosting agricultural commercialisation in Ghana. Evidence of the impact of commercialisation shows that higher crop-livestock commercialisation improves food and nutrition security of farm households in Ghana. This observation is robust to the use of alternative econometric approaches. In estimating the factors that influence four hurdles of agricultural commercialisation, namely production, sale, market choice and intensity of sale, the key factors that simultaneously determine these four hurdles are presence of bank and market in community, crop production diversity, navigable road to community, availability of public transport, agricultural cooperative in community and household size. Investments that boost infrastructure in agricultural producing areas and promote the effectiveness and efficiency of farmer institutions is critical to induce a shift from subsistent focused to commercially oriented production. Creating specific alternative livestock production and marketing-centred strategies by the Ministry of Food and Agriculture (MoFA) is imperative. The link between commercialisation and food and nutrition security suggests that it is important for Ghana to develop well-functioning food systems through enhancing effective institutional collaborations and cooperations (especially among the Ministry of Health, Ministry of Trade and Industry and MoFA) and strengthening policy that creates an enabling environment within the food value chain.