The Competitiveness of Soybean Production in the Upper West Region of Ghana

Abstract

In Ghana, soybean production has received considerable promotion since its introduction in 1910 ranging from research, education on utilization technologies, subsidies, etc. The government still provides subsidy to soybean production in the form of soft credit on inputs (fertilizer, seeds, ploughing). Despite these support systems, little or no study has been conducted to assess the private incentives for farmers to continue its production and the sustainability of its production if the support systems are withdrawn. An equally important related issue that has not also received research attention concerns the extent to which social profit deviates from its private counterpart as well as the constraints to soybean production as it pertains to the Upper West Region of Ghana. This study sets out to assess the competitiveness of soybean production in the Upper West Region, and applied the policy analysis matrix (PAM) approach. The results indicate that soybean production in the Upper West Region is privately profitable. This means that farmers have the incentive to continue growing the crop. However, with regards to efficiency the results show that soybean production in the Upper West Region exhibits lack of economic efficiency in the use of scarce domestic resources as demonstrated by a negative social profit and a Domestic Resource Cost (DRC) ratio of greater than unity. The finding suggests that the soybean industry in the Upper West Region will not be sustainable in the absence of government’s support. Based on these results, the study recommends that government should continue to provide subsidies to inputs. The subsidy on fertilizer in particular, should be extended to include the development and dissemination of the new seed variety (Jenguma) developed by SARI at a subsidised price to serve as incentives for farmers to grow the crop. The government should take proactive measures to provide irrigation facilities to solve the constraint of over reliance on rainfall.