A Comparative Study of Formal andInformal Irrigated Urban Vegetable Production in the Greater Accra Region

Abstract

In the urban centres the demand for vegetable is not seasonal, necessitating a year-round production heavily dependent on irrigation. This study was designed to conduct a comparative economic analysis of formal and informal irrigated vegetable farms in the Greater Accra Region. The analysis was based on farm management data obtained from 60 respondents of the two vegetable irrigation systems respectively in 2001. A budget analysis revealed that formal irrigated urban vegetable farming employed larger quantities of all variable inputs than informal irrigated urban vegetable farming. In addition, output per acre and profit was much higher on formal farms than on informal farms, because formal farms obtained larger output by using larger quantities of inputs at relatively lower unit costs. Production function analysis showed that the technical efficiencies associated with both farm types is factor-biased or neutral, and that technical efficiency is higher on formal than on informal farm types. Both farm types were found to be allocatively inefficient in the use of all the production resources considered in the study. In relative terms, however, formal farms were more allocatively efficient in the use of agrochemicals. The study also showed that farmers in the formal system underutilized land, labour and agrochemicals, and overutilized irrigation service inputs. Informal farm types underutilized fertilizer and agrochemical but overutilized miscellaneous inputs (seeds and planting materials). The higher technical efficiency and profit margins associated with formal irrigated farms tend to support investments in irrigation infrastructure as a means of increasing agricultural productivity and income to small-scale farmers. To exploit the full potential of irrigation, farmers need a complete package of production inputs, improved access to land as well as training on the operation, maintenance and repair of irrigation equipment. To attain optimal resource allocation, formal irrigation farm types need to increase their employment of labour, land and agrochemicals and reduce irrigation services inputs. Informal farm types similarly need to increase the use of fertilizer and agrochemicals while reducing their employment of high expenses on seeds and planting materials and other miscellaneous inputs.