THE EFFECTS OF OUTGROWER SCHEME ON LIVELIHOODS 

OF SMALLHOLDER SORGHUM FARMERS IN NORTHERN 

GHANA 

 

 

BY 

CHARLES KWOWE KWAME NYAABA 

(10169660) 

 

 

THIS THESIS IS SUBMITTED TO THE UNIVERSITY OF GHANA, 

LEGON IN PARTIAL FULFILMENT OF REQUIREMENT FOR 

THE AWARD OF DOCTOR OF PHILOSOPHY DEGREE IN 

AGRIBUSINESS 

 

 

 

DEPARTMENT OF AGRICULTURAL ECONOMICS AND AGRIBUSINESS 

COLLEGE OF BASIC AND APPLIED SCIENCES 

UNIVERSITY OF GHANA, LEGON 

 

 

JULY, 2019 



i 

 

DECLARATION 

I, Charles Kwowe Kwame Nyaaba, do hereby declare that except for the references cited, 

which have been duly acknowledged, this thesis titled, “The Effects of Outgrower Scheme 

on the Livelihoods of Smallholder Sorghum Farmers in Northern Ghana” is the result of 

my own research. This thesis has never been presented either in whole or in part for any 

other degree of this University or elsewhere.  

 

 



ii 

 

DEDICATION 

This thesis is dedicated to the members of Peasant Farmers Association of Ghana 

(PFAG). 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  



iii 

 

ACKNOWLEDGEMENTS 

I thank the Almighty God for giving me good health and protection throughout the four 

years of my studies. My profound gratitude goes to my supervisory team comprising of 

Prof. Daniel Bruce Sarpong, Prof. Irene S. Egyir and Dr. Freda Asem for their scholarly 

advice. I also wish to acknowledge all lecturers at the Department of Agricultural 

Economics and Agribusiness for their comments and suggestions that helped to refine the 

thesis.   

The thesis would not have been possible without funding from the Africa Climate Change 

Adaptation Initiative (ACCAI), Pan-Africa Doctoral Academy (PADA) and Danida 

Fellowship Centre (DFC). I am especially indebted to Prof. Yaa Ntiamoa-Baidu, the 

Director of PADA and Dr. Naalamle Amissah from ACCAI for their professional 

guidance. 

I also wish to acknowledge the contributions of my PhD colleagues from the Department 

of Agricultural Economics and Agribusiness during seminars and daily discussions. Mr. 

Dinko Hanaan Dinko and Prof. Joseph Awetori Yaro equally played important roles by 

providing technical support, I am most grateful. For the smallholder farmers I collected 

the data from and those I work with, I thank all of them for their cooperation.   

My special thanks go to the National President of the Peasant Farmers Association Ghana 

(PFAG) (Mr. Abdul-Rahman Mohammed) for his encouragement and moral support. The 

Executive Director of PFAG, Madam Victoria Adongo has contributed so much to my 

career development more than I could express in this thesis. May the Almighty God 

continue to guide and protect her. To all staff of PFAG, I am grateful for their moral 

support.  

Nobody has ever been so important in the pursuit of my career development than the 

members of my family. I thank my mother whose love and guidance is always with me in 

whatever decision I make in life. Most importantly, I thank my loving and supportive wife, 

Reina Dam-Balagwor, my two wonderful daughters Wesom and Chagewe and My son 

Wesei for being my inspiration.  



iv 

 

 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.  

  



v 

 

TABLE OF CONTENTS 

 

DECLARATION ................................................................................................................. i 

DEDICATION .................................................................................................................... ii 

ACKNOWLEDGEMENTS .............................................................................................. iii 

ABSTRACT ...................................................................................................................... iv 

TABLE OF CONTENTS ................................................................................................... v 

LIST OF TABLES .............................................................................................................. x 

LIST OF FIGURES .......................................................................................................... xii 

LIST OF ACRONYMS .................................................................................................. xiii 

 

CHAPTER ONE ................................................................................................................. 1 

INTRODUCTION .............................................................................................................. 1 

1.1 Background of the Study .............................................................................................. 1 

1.2 Problem Statement ........................................................................................................ 4 

1.3 Objectives of the Study ............................................................................................... 11 

1.4 Hypothesis of the Thesis ............................................................................................. 11 

1.5 Relevance of the Study ............................................................................................... 11 

1.6 Organisation of the Thesis .......................................................................................... 13 

 

CHAPTER TWO .............................................................................................................. 14 

LITERATURE REVIEW ................................................................................................. 14 

2.1 Introduction ................................................................................................................. 14 

2.2 Background of Sorghum Production .......................................................................... 14 

2.2.1 History of Sorghum Outgrower Schemes in Ghana ......................................... 16 

2.3 Agriculture and Economic Development in Africa .................................................... 17 

2.3.1 Agriculture and Economic Development in Ghana ......................................... 19 

2.3.2 Food and Agricultural Policies in Ghana ......................................................... 22 

2.3.3 Medium Term Agricultural Sector Investment Plans in Ghana ....................... 24 



vi 

 

2.4 Ghana Government Agricultural Flagship Programmes ............................................ 25 

2.5 Concept of Smallholder Farmers ................................................................................ 27 

2.5.1 Smallholder Farmers Crop Productivity and Profitability ............................... 29 

2.5.2 Postharvest Loss Among Smallholder Farmers ............................................... 31 

2.5.3 Smallholder Farmers and Climate Change ....................................................... 35 

2.5.4 Smallholder Farmers Vulnerability to Climate Change ................................... 37 

2.6 Outgrower Scheme Debate ......................................................................................... 39 

2.6.1 Types of Outgrower Schemes .......................................................................... 43 

2.7 Summary and Knowledge Gap in the Literature ........................................................ 44 

 

CHAPTER THREE .......................................................................................................... 46 

METHODOLOGY ........................................................................................................... 46 

3.1 Introduction ................................................................................................................. 46 

3.2 Conceptual Framework of the Study .......................................................................... 46 

3.3 Analytical Framework ................................................................................................ 50 

3.4 Theoretical Framework for Factors Influencing Participation in Outgrower Scheme 52 

3.5 Theoretical Framework for Effects of Sorghum Outgrower Scheme on Productivity, 

Postharvest Loss and Profitability ............................................................................. 54 

3.5.1 Estimation of Treatment effects of Outgrower Scheme on Productivity, 

Postharvest Loss and Profitability .................................................................... 56 

3.5.1.2 The Endogenous Switching Regression Estimation ...................................... 60 

3.6 The Effects of Sorghum Outgrower Scheme on Vulnerability to Climate Change ... 64 

3.7 Method of Data Analysis ............................................................................................ 65 

3.7.1 Background of the Study Respondents ............................................................ 66 

3.7.2 Factors Influencing Smallholder Farmers Participation in Outgrower Scheme

 .......................................................................................................................... 66 

3.7.3 The Effects of Outgrower Scheme on Productivity, Postharvest Loss 

Reduction and Profitability .............................................................................. 73 



vii 

 

3.7.4 Determining the effects of Outgrower Scheme on Smallholder Farmers 

Vulnerability to Climate Change ..................................................................... 77 

3.8 Method of Data Collection ......................................................................................... 83 

3.8.1 Sources of Data, Instruments and Interview Procedure ................................... 83 

3.8.2 Sampling Procedure ......................................................................................... 84 

3.8.3 Interview Procedure ......................................................................................... 87 

3.9 Study Area .................................................................................................................. 91 

3.10 Scope and Limitations of the Study .......................................................................... 94 

 

CHAPTER FOUR ............................................................................................................ 95 

RESULTS AND DISCUSSION ....................................................................................... 95 

4.1 Introduction ................................................................................................................. 95 

4.2 Background of the Study Respondents ....................................................................... 95 

4.2.1 Household Characteristics of the Respondents ................................................ 95 

4.2.2 Farm Characteristics of the Respondents ......................................................... 99 

4.3. Socio-economic and Political Characteristics of the Respondents .......................... 102 

4.4 Description of the Sorghum Outgrower Scheme in the Study Area ......................... 105 

4.4.1 Type of Contracts Between Farmers and Buyers ........................................... 106 

4.4.2 Perception of Smallholder Farmers on Price Determination .......................... 107 

4.4.3 Kind of Support Received by Farmers from Buyers ...................................... 108 

4.4.4 Specific Support Targeting Smallholder Farmers Vulnerability to Climate 

Change ............................................................................................................ 109 

4.5 Factors influencing Smallholder Farmers Participation in Sorghum Outgrower 

Scheme .................................................................................................................... 111 

4.6. Determining the Effects of Outgrower Scheme on Smallholder Farmers Productivity

 ................................................................................................................................. 116 

4.6.1 Productivity Analysis ..................................................................................... 116 

4.6.2 Average Treatment Effect on Sorghum Productivity ..................................... 118 



viii 

 

4.7 Determining the Effects of Outgrower Scheme on Smallholder Farmers Profitability

 ................................................................................................................................. 123 

4.7.1 Profitability Analysis ...................................................................................... 123 

4.7.2 Average Treatment effects on Profitability .................................................... 123 

4.8 Determining the effects Outgrower Scheme on Smallholder Farmers Postharvest 

Loss Reduction ........................................................................................................ 126 

4.8.1: Analysis of Postharvest Situation in the Study Area ..................................... 126 

4.8.2 Average Treatment Effects of Sorghum Outgrower Scheme on Postharvest 

Loss Reduction ............................................................................................... 130 

4.9 Determining the Vulnerability Level of Smallholder Farmers to Climate Change .. 135 

4.9.1 Results of Vulnerability of Smallholder Farmers to Climate Change ............ 135 

4.9.2 Average Treatment effects on Smallholder Farmers Vulnerability to Climate 

Change ............................................................................................................ 142 

4.9.3 Summary of Smallholder Farmers Vulnerability to Climate Change ............ 146 

 

CHAPTER FIVE ............................................................................................................ 148 

SUMMARY, CONCLUSION AND RECOMMENDATION ....................................... 148 

5.1 Introduction ............................................................................................................... 148 

5.2 Summary and Major Findings .................................................................................. 148 

5.3. Recommendation ..................................................................................................... 152 

 

REFERENCES ............................................................................................................... 155 

  



ix 

 

APPENDICES ................................................................................................................ 173 

Appendix 1: Questionnaire ............................................................................................. 173 

Appendix 2: Interview Guide ......................................................................................... 189 

Appendix 3: Postharvest Loss Along the Various Postharvest Chain ............................ 194 

Appendix 4: Propensity Score Matching ........................................................................ 198 

Appendix 5: LVI Results in Percentage for Control and Treatment .............................. 201 

 

 

  



x 

 

LIST OF TABLES 

Table 1.1: Actual and Achievable Productivity of Major Staple Crops in Ghana ............. 2 

Table 2.1: Productivity of Major Staple Crops in Ghana ................................................. 30 

Table 2.2: Trends of Productivity in Crops (MT/Ha) in Ghana ....................................... 31 

Table 2.3: Mean Annual Change in Rainfall (%) in Ghana ............................................. 36 

Table 2.4: Projected Mean Annual Temperature Changes in Ghana ............................... 36 

Table 3.1: Treatment Effect .............................................................................................. 62 

Table 3.2 :Variables Influencing Participation in Sorghum Outgrower Scheme ............. 69 

Table 3.3: Major and Sub-Component for Natural Disasters and Climate Change ......... 79 

Table 3.5: Sampling Procedure ......................................................................................... 86 

Table 3.6: Communities and Number of Sorghum Farmers Sampled .............................. 87 

Table 4.1: Household Characteristics of the Respondents ............................................... 96 

Table 4.2. Farm Characteristics of the Respondents ...................................................... 100 

Table 4.3: Market, Community and Socio-economic and Political Characteristics ....... 102 

Table 4.4: Kind of Support Received by the Sorghum Farmers from Buyers ............... 108 

Table 4.5:  Kind of Support on Climate Resilient Received by Farmers ....................... 110 

Table 4.6: Factors Influencing Participation in the Sorghum Outgrower Scheme ......... 112 

Table 4.7: Comparison of Productivity, Revenue and Costs Across Treatment and 

Control Groups ............................................................................................. 117 

Table 4.8: Results of Full Information Maximum Likelihood Estimates of Endogenous 

Switching Regression on Productivity .......................................................... 119 

Table 4.9: Endogenous Switching Regression (ESR) Results on Productivity .............. 121 

Table 4.10: Propensity Score Matching Results on Farm Productivity.......................... 122 

Table 4.11: Full Information Maximum Likelihood Estimates Results on Profitability.

 ...................................................................................................................... 124 



xi 

 

Table 4.12: Endogenous Switching Regression Results on Profitability ....................... 125 

Table 4.13: Propensity Score Matching Results on Profitability ................................... 126 

Table 4.14: Postharvest Loss for Treatment and Control Groups .................................. 127 

Table 4.15: Full Information Maximum Likelihood Estimates Results on Postharvest 

Loss Reduction ............................................................................................. 132 

Table 4.16: Endogenous Switching Regression Results on Postharvest Loss Reduction

 ...................................................................................................................... 133 

Table 4.17: Propensity Score Matching Results on Postharvest Loss Reduction .......... 134 

Table 4.18: Indexed Sub and Major Component of LVI for Water, Socio-demographic, 

Food and Social Network ............................................................................. 136 

Table 4.19: Indexed Sub and Major Component of LVI for Livelihood Strategy, Natural 

Disaster and Climate Change and Health ..................................................... 138 

Table 4.20: LVI-IPCC Contribution Factors to Climate Change ................................... 139 

Table 4.21: Full Information Maximum Likelihood Estimates of effects of Sorghum 

Outgrower Scheme on Reducing Vulnerability to Climate Change ............. 142 

Table 4.22: Endogenous Switching Regression Results of Treatment effects of Sorghum 

Outgrower Scheme on Vulnerability to Climate Change ............................. 144 

Table 4.23: Treatment effects on Vulnerability to Climate Change ............................... 145 

 

  



xii 

 

LIST OF FIGURES 

Figure 1.1: Trend of Sorghum performance for the Period of 2005 to 2016 ...................... 7 

Figure 2.1: Agricultural Sub-Sectors in Ghana ................................................................ 20 

Figure 2.2: Real Annual GDP Growth Rate of the Agricultural Sector 2010 – 2017 ...... 22 

Figure 3.1: Conceptual Framework of Sorghum Outgrower Scheme in Ghana ............... 49 

Figure 3.2: Sustainable Livelihood Framework ............................................................... 51 

Figure 3.3: Map of the Study Area ................................................................................... 93 

Figure 4.1: Existing Contracts Between Farmers and Buyers ........................................ 106 

Figure 4.2: Perception of Farmers on How Prices Price Determination ........................ 107 

Figure 4.3: Percentage Losses in the Various Postharvest Loss stages .......................... 128 

Figure 4.4: Vulnerability Triangle Diagram of LVI-IPCC for Control and Treatment.. 140 

Figure 4.5: Vulnerability Spider Diagram of the Major Components of the LVI for 

Control and Treatment Groups ..................................................................... 141 

 

 

  



xiii 

 

LIST OF ACRONYMS 

1D1F  One District One Factory   

1D1W  One District One Warehouse  

1V1D  One Village One Dam 

AAGDS  Accelerated Agricultural Growth and Development Strategy 

AGRA Alliance for Green Revolution in Africa 

ATT Average Treatment Effect on the Treated  

ATU Average Treatment Effect on the Untreated  

CAADP  Comprehensive Africa Agriculture Development Programme 

CAPI Computer-Assisted Personal Interviewing  

ECOWAP          Economic Community of West African States Regional Agricultural 

Policy 

ECOWAS  Economic Community of West African States 

EPA Environmental Protection Agency 

ESR Endogenous Switching Regression 

ESRM Endogenous Switching Regression Model  

EUCORD European Cooperation for Rural Development  

FAO Food and Agriculture Organisations of United Nations  

FASDEP I  First Food and Agricultural Sector Development Policy one 

FASDEP II  Second Food and Agricultural Sector Development Policy II 

FIML  Full Information Maximum Likelihood Estimate 

GCAP Ghana Commercial Agricultural Programme 

GDP  Gross Domestic Product 

GGBL Guinness Ghana Brewery Limited  

GhAIP  Ghana Agricultural Investment Plan  

GLSS  Ghana Living Standard Survey  

GOPDC  Ghana Oil Palm Development Company Limited  

GPRS I  First Ghana Poverty Reduction Strategy 

GSGDA  Ghana Shared Growth and Development Agenda 

GSS Ghana Statistical Service 

IPCC  Inter-Governmental Panel on Climate Change  



xiv 

 

IPWRA Inverse Probability Weighted Ratio Adjusted  

ISSER  Institute of Statistical, Social and Economic Research 

MDGs  Millennium Development Goals 

METASIP I  First Medium-Term Agricultural Sector Investment Plan  

METASIP II  Second Medium-Term Agricultural Sector Investment Plan 

MoFA  Ministry of Food and Agriculture 

NEPAD  New Partnership for Africa Development 

NGO  Non-Governmental Organisations  

OGS Out Grower Scheme 

OLS Ordinary Least Square 

PERD Planting for Export and Rural Development  

PFJ  Planting for Food and Jobs  

PHL  Post Harvest Loss  

PSIA  Poverty and Social Impact Analysis  

PSM  Propensity Score Matching  

SARI  Savanna Agriculture Research Institute 

SDGs Sustainable Development Goals  

SHF  Small Holder Farmer 

SLF Sustainable Livelihood Framework  

SOGS  Sorghum Out Grower Scheme  

SSA  Sub-Saharan Africa 

TH Transitional Heterogeneity  

TZ Tuozafi 

UNDP  United Nations Development Programme 

UNEP  United Nations Environment Programme 

WASVCD West African Sorghum Value Chain Development Project 

  



1 

 

CHAPTER ONE  

INTRODUCTION 

1.1 Background of the Study  

There is global consensus on agricultural contribution to poverty reduction, job creation 

and overall economic development (Alexandratos & Bruinsma, 2012; Schaffnit-

Chatterjee, 2014).  The Food and Agriculture Organisations of the United Nations (FAO) 

(2018) identified strategic agricultural investment in Sub-Saharan Africa (SSA) as an 

important option that can increase incomes of smallholder farmers (SHF), reduce their 

poverty level and at the same time, guarantee enough food for the projected global 

population of 9.8 billion people by 2050. In analysing challenges and opportunities in 

agricultural investment in SSA, Saghir & Hoogeveen (2017) found effects of investing in 

the agricultural sector as eleven times effective in reducing poverty than similar 

investments  in the other sectors of the SSA economy. 

In Ghana, the agricultural sector play a leading role in the overall economic development. 

The sector provides jobs for about 38.3% of the population and remain the major sources 

of income for majority of low income earners, largely, those in the rural areas (Ghana 

Statistical Service (GSS), 2019). According to GLSS 7 report, about 63.3% of rural folks 

are engaged as skilled agricultural workers compared to 11.4% for those in the urban areas.  

Several literature identified SHF constraints such as difficulty in  accessing financial 

support; access to mechanization services; reliance on outmoded method of farming; poor 

extension services; poor market and storage infrastructure; high postharvest losses (PHL); 

limited irrigation facilities and effects of climate change as a major challenge for SHF 

development in Ghana  (Awunyo-Victor & Al-hassan, 2014; Boateng & Nyaaba, 2014; 

Dittoh & Akuriba, 2018; FAO, 2017; GSS, 2014d; Intergovernmental Panel on Climate 

Change (IPCC), 2013; MoFA, 2017b; Villano, Asante, & Bravo-Ureta, 2019).  



2 

 

Smallholder farmers productivity in Ghana as is the case for most SSA countries is 

generally low, production is limited to home consumption and surpluses for the market 

(Ecker, 2018). They are classified among the poor in the country (GSS, 2019). To improve 

the livelihoods of SHF will require a strategy that will transform their current subsistence 

farming practices to approach their farming as a business.   

Ghana government response to addressing SHF constraints is articulated in the Food and 

Agricultural Sector Development Policy I and II (FASDEP I &II) and associated first and 

second Medium-Term Agricultural Sector Investment Plans (METASIP I and II) (Allience 

for Green Revolution in Africa (AGRA), 2016; Ministry of Finance, 2018; MoFA, 2017b). 

Some programmes in METASIP II implemented in support of SHF include: Fertilizer and 

Seed Subsidy Programme, Creation of Agricultural Mechanization Centres and 

establishment of National Food Buffer Stock Company (Fearon & Adraki, 2015; Institute 

of Statistical, Social and Economic Research (ISSER), 2012; World Bank, 2012). With all 

these interventions, data from the Ministry of Food and Agriculture (MoFA) shows little 

improvement in SHF performance which reflect the stagnation of productivity of various 

staples in Ghana (Ministry of Food and Agriculture (MoFA), 2017a). Table 1.1 shows 

actuals yields and achievable yields of some selected staple crops of SHF in Ghana.  

Table 1.1: Actual and Achievable Productivity of Major Staple Crops in Ghana 

Staple crops Achievable yield 

(MT/ha) 

Actual yield 

(MT/ha) 

% Achieved 

Maize 5.50 2.05 37.27 

Rice (Paddy) 6.00 3.01 50.17 

Cassava 45.00 20.68 45.96 

Yam 52 16.74 32.19 

Sorghum 2.00 1.24 62.00 

Soybeans 3.00 1.70 56.67 

Source: MoFA, 2017 

  



3 

 

1.1.1 Smallholder Farmers and Sorghum Production in Ghana 

The concept of SHF varies from different literature. From a general standpoint, SHF are 

farmers operating under structural constraints such as access to sub-optimal amounts of 

resources, technology and markets (Dittoh & Akuriba, 2018; Dixon et al., 2004) 

summarize this idea when they say that “the term smallholders refers to limited resource 

endowment of farmers compared to other farmers in the sector”. In Ghana, Ministry of 

Food and Agriculture categorised SHF as those cultivating a land area below two hectares 

(MoFA, 2016). For the purposes of this study, sorghum smallholder farmers are sorghum 

farmers who cultivate less than two hectares, are constraint with production and marketing 

resources and hardly access quality extension services.  

Sorghum is a staple crop predominantly cultivated by SHF in Northern Ghana.  It is largely 

grown in the Sudan and Guinea Savanna agro-ecological zones of Ghana (Akuriba & 

Asuming-Brempong, 2012). Sorghum farming is said to be convenient due to its low 

inputs’ requirements, less laborious and has the ability to withstand the unfriendly weather 

condition in Northern Ghana. Sorghum can be grown in any marginal lands without heavy 

fertilizer application (Angelucci, 2013).  

Every part of the sorghum plant has economic value. Sorghum can be used for preparation 

of light porridge and tuozafi (TZ). Tuozafi has become a staple food in Ghana, especially 

among the indigenes of Northern Ghana. The flour of sorghum serves critical needs such 

as curing illnesses and feeding lactating mothers. Sorghum leaves and stalks are used for 

fencing, weaving baskets, roofing, mat making and also fuel for cooking in most rural 

areas in northern Ghana (Angelucci, 2013; Ratnavathi et al., 2016). The fresh sorghum 

leaves and stalks as well as processed sorghum grains are good for feeding livestock 

(Angelucci, 2013). During festivals, funerals and other formal and informal social 



4 

 

gatherings, sorghum artisanal beer popularly called pito is widely consumed in Ghana 

(Djameh et al., 2015). Guinness Ghana Brewery Limited (GGBL) has discovered sorghum 

as perfect substitute for barley since 2006 (Angelucci, 2013; Guinness Ghana Brewery 

Limited (GGBL), 2017). According to GGBL (2017), with better production and 

marketing arrangement, sorghum farming can create jobs in northern Ghana and 

subsequently, lead to reduction of migration of the youth to southern Ghana in search of 

non-existing jobs. 

Sorghum has been substituted for barley by GGBL for the brewing of alcoholic and non-

alcoholic drinks. According to GGBL (2017), the company policy to source local raw 

materials including sorghum for their beverage production is expected to create market, 

create jobs and alleviate poverty among the producers who are prodominately SHF. 

Subsitituting imported barley to sorghum has also reduced the import bill and contributed 

to stabilizing the local currency (GGBL, 2017; Sarfo-Mensah, 2017)  

 

1.2 Problem Statement 

Agriculture play significant role in socio-economic development of Ghana contributing 

about 21.2 per cent of gross domestic product (GDP) and providing a major source of 

income and employment for most households (GSS, 2019; Ministry of Finance, 2019). 

Ghana’s agricultural sector just like other SSA countries, is dominated by SHF who 

constitute over 80 percent of food crop farmers (Villano et al., 2019). Their land holdings 

are between one to two hectares (SRID, 2017). Most of them still depend on outmoded 

technologies in farming (AGRA, 2017; Chauvin et al., 2012; Ecker, 2018). Other 

challenges are their inability to access quality inputs, credit and extension services leading 

to low crop yields, low productivity reflecting in their low profitability. Smallholder 



5 

 

farmers are also challenge with guaranteed market and profitable prices (Mariano et al., 

2012; Tsinigo & Behrman, 2017; Al-Hassan et al., 2013; Ecker, 2018).  

Poor agronomic practices coupled with poor postharvest facilities, smallholder farmers are 

also face with high PHL (Kiaya, 2018). The high PHL is usually due to poor postharvest 

facilities such as, harvesters, dryers,  appropriate transport facilities and storage 

infrastructure (Affognon et al., 2015; Sheahan & Barrett, 2016).  

Aside the above challenges, access to market is a major challenge facing several farmers 

in Ghana including those cultivating sorghum. Availability of market has become a key 

determinant of the choice of crop produced (Ebata & Hernandez, 2017; Opoku, 2012). In 

recent times, sorghum cultivation has attracted the interest of many SHF in northern Ghana 

due to huge demand of sorghum from GGBL for brewing of alcoholic and non-alcoholic 

beverages (Angelucci, 2013; Sarfo-Mensah, 2017). Whiles GGBL marketing arrangement 

contributed to addressing marketing challenges of sorghum in Ghana, the call for provision 

of market for sorghum is still high due to GGBL targeting farmers who produced under 

GGBL promoted outgrower schemes (Angelucci, 2013). According to Sarfo-Mensah 

2017, “some sorghum farmers are still unable to access market from GGBL due to their 

inability to produce quality sorghum that meets GGBL quality requirements”. Access to 

market is not only available market, but also market that offers profitable prices (Ebata & 

Hernandez, 2017) 

Similar to the general problems confronting other food crop producers, sorghum farmers 

have to also struggle to access optimal inputs, quality extension services, quality 

postharvest facilities, credit and also, suffer with poor weather conditions (Azumah et al., 

2016; Tsinigo & Behrman, 2017; Udimal et al., 2017).  



6 

 

Majority of sorghum farmers use poor quality seeds for planting and hardly follow good 

agronomic practices leading to low crop yields. Harvesting is done manually using simple 

farm tools such as hoes and cutlasses. The harvested grains in most occasions are dried on 

the field and threshed manually  (Akuriba & Asuming-Brempong, 2012; Statistics, 

Research and Information Directorate of Ministry of Food and Agriculture (MoFA-SRID), 

2016). These practices apart from reducing the yield quality and quantity, also lead to high 

postharvest losses. In Ghana, high PHL loss, especially aflatoxin contamination in 

sorghum is of major concern.  Available statistics put PHL in sorghum between 5% to 

15% ( High Level Panel of Expert on Food Security and Nutrition (HLPE), 2014; MoFA, 

2016).  

Another constrain to sorghum production is the effect of climate change. 

Intergovernmental Panel on Climate Change opines that climate related hazards affects the 

livelihoods of rural poor directly by affecting their crop yields and worsening their food 

insecurity situation (Intergovernmental Panel on Climate Change (IPCC), 2018). The 

changes are in the form of low and unpredicted rainfall, rising temperatures, flooding, 

drought and emergence of pest and diseases (Adu et al., 2018; Dickinson et al., 2017; 

IPCC, 2018; Jamshidi et al., 2019; Makate et al., 2019; Makuvaro et al., 2018; Shah et al,. 

2013; Yaro, 2013). These challenges have drastically affected smallholder farmers 

productivity, PHL and their profitability.   

The combined effects are reduction in sorghum production, slow growth of sorghum 

production and reduction in sorghum contribution to agricultural GDP (MoFA-SRID, 

2016). Figure 1.1 shows the trend of sorghum production, area planted, annual production 

and annual growth for the period of 2005 to 2016. The area planted, annual production and 

annual growth has experienced increment from 2007 to 2008 and declined after 2008 

(Figure 1.1).   



7 

 

 
Figure 1.1: Trend of Sorghum performance for the Period of 2005 to 2016 

Sources: SRID (2017) 

 

Given the important role of sorghum to socio-economic development in Northern Ghana 

and also the consistent decline in the overall performance, any government policy direction 

to support sorghum production and marketing could contribute to overall wellbeing of 

farmers. some programmes implemented by governments over the years to modernise the 

activities of SHF are captured in FASDEP II and METASIP II (MoFA, 2015). These 

programmes include: Fertilizer and Seed Subsidy Programme implemented to reduce cost 

of fertilizer and seeds for easy access. The programmes were expected to lead to 

improvement in application of fertilizer and improved seeds (Fearon & Adraki, 2015), 

establishment of Agricultural Mechanization Centres expected to reduce difficulty of SHF 

farmers access to mechanization services, establishment of National Food Buffer Stock 

Company expected to provide guaranteed prices and market for grains, construction of 

warehouses in every district to help address the problem of access to storage facilities and 

instituting Ghana Commodity Exchange programme to provide storage facilities, credit, 

market access and profitable prices (MoFA, 2007, 2015, 2017a).  

-100

-50

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

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8 

 

In 2017, the government of Ghana took another bold step to support SHF by introducing 

Planting for Food and Jobs (PFJ). The PFJ provided farmers with subsidised fertilizer, 

seeds, extension services and market access with the aim of modernizing their activities, 

addressing food security constraint and creating jobs (MoFA, 2017b). Even though limited 

assessment reports on these interventions exist, there is no evidence of SHF modernization 

and increased in crop productivity in Ghana.   

Inability of government to modernize the activities of SHF and to alleviate them from their 

current subsistence farming to market-oriented agribusiness call for alternative approach 

in handling government interventions. Several studies shows evidence of potentials of 

OGS to modernize the activities of SHF and improve their production efficiency ( Minot, 

2011; Agbelengor, 2015; Maertens & Velde, 2017; Ton et al., 2017; Ragasa et al., 2018) 

. The benefits of OGS ranges from helping SHF to access credit, provision of quality inputs 

(fertilizer and seeds), provision of mechanization services, provision of extension services 

and guaranteed market (Barrett et al., 2012; Minot & Ronchi, 2014; Minot, 2015; Maertens 

& Velde, 2017). The extension services as part of OGS package also provide farmers with 

climate information, early warning system and climate resilient crop varieties (Feleke et 

al., 2017; Ghimire et al., 2015; Uaiene et al., 2009). 

Regardless of the optimism about the prospects of OGS in modernizing the activities of 

SHF and transforming them to market oriented agribusiness entrepreneurs (Barrett et al., 

2012; Maertens & Velde, 2017; Minot, 2015; Minot & Ronchi, 2014; Paglietti & Sabrie 

Roble, 2012), other studies such as Oya (2012); Wang et al. (2014), Otsuka et al. (2016) 

and Vicol (2017) are pessimistic about the real benefits of OGS to SHF and raised concerns 

of buyers unilaterally determining quality standards, prices, cost of inputs and repayment 

terms leading to low benefits and high exit rate among most schemes.  



9 

 

Vicol (2017) case study of potato outgrower scheme in Maharashtra, India for instance, 

argues that rather than an inclusive alternative to land grabbing, outgrower scheme 

represents another form of land grabbing in rural India. According to the study “while 

some individual households have improved their livelihoods through participation, the 

scheme acts to reinforce already existing patterns of inequality”. The study concluded that, 

“the unequal power relations between firms and farmers skew the capture of benefits 

towards the firms, and render participating households vulnerable to indebtedness and loss 

of autonomy over land and livelihood decisions”. 

 Most OGS studies in Ghana such as Agbelengor (2015); Torvikey et al. (2016) and 

Paglietti & Sabrie Roble (2012) are all on high valued cash crops usually produced in 

southern Ghana by medium to large scale farmers. The sorghum crop has dual role as 

staple food crop and now industrial cash crop and is mainly cultivated by SHF in Northern 

Ghana. The few studies on staple crops in Ghana such as Ragasa et al. (2018) on limitation 

of maize contract farming as a pro-poor strategy in the Upper West Region of Ghana and 

Brigitte & Ragasa (2018) on effect of contract farming on development projects and 

private sector activities in Northern Ghana and also, Maertens & Vande (2017) on rice in 

Benin. Whiles these studies focus on productivity and profitability, information on 

postharvest losses and vulnerability to climate change is ignored. In terms of 

appropriateness of the methodology adopted, the methods used were robust and 

appropriate for the context. However, Ragasa et al. (2018) study on maize cannot be used 

for policy making for sorghum due to numerous government support and available market 

for maize in Ghana. Also, Brigitte & Ragasa (2018) study was comparing effect of 

development projects on private projects and did not analyse the effect on livelihoods. 

Concerning Maertens & Vande (2017) study on rice, apart from substantial differences 

between sorghum and rice in terms of utilization, government support and available market 



10 

 

for rice, geographical location and country specific characteristics weaken any justification 

for policy making in Ghana based on the Maertens & Vande (2017) work. Whiles Maertens 

& Vande (2017) and Ragasa et al. (2018) work provided information on effects of 

outgrower scheme on profitability for rice and maize farmers respectively, information on 

effects on PHL and vulnerability to climate change was ignored. 

Other studies such as Azumah et al. (2016) to determine the factors influencing SHF 

decision to participate in OGS and its effect on farm income in the Northern Region of 

Ghana found that access to credit and extension services positively influenced farmers 

decision to participate (Azumah et al., 2016). The Azumah et al. (2016) study did not 

target specific crop which defeats the concept of OGS.  

Given the importance of sorghum production to the livelihoods of SHF in Northern Ghana 

and lack of empirical study on its effect and also, the inability of government interventions 

to improve smallholder sorghum farmer’s performance, information on programmes and 

interventions that can transform their subsistence farming practices to agribusiness will be 

relevant for policy making. This research therefore examines whether OGS has any effects   

on the livelihoods of smallholder sorghum farmers in Northern Ghana or not. Specifically, 

the study will answer the following research questions: 

i. What factors influence smallholder farmers’ decision to participate in sorghum 

outgrower scheme? 

ii. What are the effects of outgrower scheme on smallholder sorghum farmers’ 

productivity, postharvest loss and profitability? 

iii. What are the effects of outgrower scheme on smallholder sorghum farmers’ 

vulnerability to climate change? 



11 

 

1.3 Objectives of the Study  

The main objective of the study is to examine the effects of outgrower scheme on the 

livelihoods of smallholder sorghum farmers in Northern Ghana. The specific objectives 

are to:  

i. Determine factors influencing smallholder sorghum farmers’ decision to 

participate in the outgrower scheme.  

ii. Establish the effects of outgrower scheme on smallholder sorghum farmers’ 

productivity, postharvest loss and profitability. 

iii. Determine the effects of outgrower scheme on smallholder sorghum farmers’ 

vulnerability to climate change.   

 

1.4 Hypothesis of the Thesis   

The main hypotheses of the thesis are:  

1. Household characteristics, farm and market characteristic, socio-economics and 

political characteristics significantly influence smallholder farmers’ decision to participate 

in sorghum outgrower scheme.  

2. Sorghum ourgrower scheme enhances smallholder farmers’ productivity, helps reduce 

their postharvest losses and increases their profitability.  

3. Sorghum ourgrower scheme reduces smallholder farmers’ vulnerability to climate 

change. 

 

1.5 Relevance of the Study   

This study is relevant because it provides information on factors influencing SHF decision 

to participate in SOGS in Northern Ghana. Knowledge on factors influencing SHF 

decision to join outgrower scheme is important information that can inform policy makers 



12 

 

on the type of policies that can improve the sorghum industry. Given the uniqueness of 

sorghum as staple crop and now industrial crop and also the complex nature of SHF 

engaging in cash crop production, understanding the specific factors motivating their 

decision to participate is relevant for policy making.  

Secondly, information on effects of OGS on SHF farmers’ productivity, postharvest loss 

and their profitability is important information for both private sector and government 

investment decisions. Existing literature on OGS on staple crops focus only on 

productivity and profitability. Information on postharvest losses and SHF vulnerability to 

climate change has always been ignored of which this study provides.  

Another important dimension of this study is to understand the effects of outgrower 

scheme on SHF vulnerability to climate change. Climate change and its impact on 

livelihoods is of global concern and most previous studies focuses only on farm level 

adaptation strategies. Evidence on the effects of OGS on vulnerability to climate change 

will help policy makers to take investment decisions on OGS development in Ghana. 

Following the government policy decision to develop Ghana beyond, various flagship 

programmes were implemented in the agricultural sector. These programmes aimed at 

enhancing SHF performance, promoting government modernization agenda and 

consequently leading to food security and job creation. Given that similar projects such as 

the establishment of Agricultural Mechanisation Centres, National Food Buffer Stock 

Companies and Fertilizer Subsidy programmes in the past failed to achieve project 

objectives, evidence on effects of SOGS could serve as a learning curve to guide 

government on future investment decisions.  

Finally, there are limited empirical literature on SOGS in Ghana. The few existing 

literature are end of project evaluation reports. The methodology adopted by such studies 



13 

 

are not robust and policy recommendations from such reports are not scientifically proven. 

Using information from such reports for policy formulation could be misleading and 

leading to weak policies.  

This study employed Endogenous Switching Regression Model (ESRM) which address 

heterogeneity and endogeneity problems leading to unbiased and consistent results. 

Recommendations based on consistent and unbiased results will generate debate that will 

resonate beyond academic cycles to ideal policies that have positive impact on the 

beneficiaries.  

 

1.6 Organisation of the Thesis 

The thesis is broadly organised in five chapters. Chapter one contains background 

information of the study, problem statement, objectives of the study, relevance of the study 

and organization of the thesis. Chapter two reviewed literature on SHF and their livelihood 

situation, their constraints, their productivity, their PHL and their vulnerability to climate 

change. Literature on OGS and its livelihood implications to SHF were also reviewed. 

Other areas that were reviewed in chapter two were agricultural policies and investment 

plans and Ghana government agricultural flagship programmes. The last part of chapter 

two summarises the literature and present important issues identified in the literature. 

Chapter three is about the conceptual framework of the study, theoretical framework, data 

sources and sampling procedure. Information on the study area and methods of data 

analysis were also discussed. Chapter four contain the results and discussions. Chapter five 

is the summary of the study, conclusion, policy recommendations and suggestions for 

future research.  

  



14 

 

CHAPTER TWO 

LITERATURE REVIEW 

2.1 Introduction 

This chapter presents a review of the relevant empirical literature on outgrower schemes. 

The chapter is organized into sections as follows. Section 2.2 background of sorghum 

production and sorghum ourgrower scheme in Ghana. Section 2.3 reviews literature on 

agriculture and economic development in Africa and that of Ghana in food and agricultural 

policies. 2.4 Ghana government’s agricultural flagship programmes. Section 2.5 contains 

contextual issues surrounding smallholder farmers, their livelihood situation, their 

production, postharvest losses and climate change issues. Section 2.6 review literature on 

outgrower schemes Section while section 2.7 summarises the literature and identifies 

literature gaps. 

 

2.2 Background of Sorghum Production 

Sorghum farming in recent times attracted global attention due to discoveries on its 

nutritional values and the comparative advantage it has in the brewing industry to other 

crops (Ramashia et al., 2019). Among cereal crops consumed by humans, sorghum ranked 

third only superseded by wheat and rice in Africa, China  and India (Hariprasanna et al., 

2015; Ramashia et al., 2019). Some of the north-eastern countries in China such as Jilin, 

Liaoning, and Heilong-jiang have rice-like sorghum food as their major diet (Upadhyaya 

et al., 2017).  

United States, Australia, and Argentina account for 20%-30% of the world sorghum and 

top the sorghum exporting countries (Mccuistion et al., 2019). According to Ratnavathi et 

al. (2016), the unique attributes of sorghum as a drought-tolerant crop, grown in any 

marginal lands, requiring lesser inputs in production and climate-resilient makes it suitable 



15 

 

crop for the poor. Utilization of sorghum as snacks, cookies and noodles are on the increase 

in Japan, the United States of America and Vietnam. Consumption of gluten-free beers 

prepared from sorghum are currently on the increase in America to cater for celiac patients 

(Aruna & Visarada, 2018). According to Aruna & Visarada (2018), special sorghum 

varieties are produced for direct consumption and for preparation of various snacks and 

weaning foods in India. 

In Africa, several meals such as porridge, steam-sorghum and snacks are prepared from 

sorghum and are delicacy for most rural and urban populations in many countries in the 

continent (Djameh et al., 2015; Upadhyaya et al., 2017). Couscous (grain like meal, 

prepared from sorghum flour) for example, is a granulated and steamed traditional food 

preferred in many parts of SSA, especially Senegal but originated from North Africa 

(Ramashia et al., 2019). Injera (crepe-like spongy bread made from sorghum) of Ethiopia, 

Kisra from Sudan is thin fermented bread prepared with sorghum, Ogi from Nigeria is 

fermented cereal pudding  made of sorghum and gluten-free breads from Nigeria are some 

of the important food prepared using sorghum in SSA (Djameh et al., 2015; Upadhyaya et 

al., 2017). Also, lager and stout beer known as clear beer is brewed through malting of 

sorghum in Nigeria (Aruna & Visarada, 2018; Ogunsakin et al., 2017; Ramashia et al., 

2019; Upadhyaya et al., 2017) 

Sorghum ranked third among important cereal crops grown in Ghana after maize and rice, 

with a share of 12% of the total cereal production (Akuriba & Asuming-Brempong, 2012; 

Angelucci, 2013) The popular sorghum varieties grown in Ghana are Naga White, Naga 

Red, Kapaala, and Dorado. Sorghum is considered a climate tolerant crop, easy to 

cultivate, requires low fertilizer application and can be cultivated on any marginal lands. 

It is considered in recent times as a cash crop of which majority of the youth in northern 



16 

 

Ghana are engaged as economic activity (Akuriba & Asuming-Brempong, 2012; Djameh 

et al., 2015).  

Apart from food security and income, the value of sorghum is associated with social, 

cultural and religious ceremonies. The leaves and stalks are used for fencing, weaving 

baskets, roofing, mat making and also fuel for cooking in most rural areas in northern 

Ghana. Sorghum also serves critical needs such as curing illnesses, feeding lactating 

mothers and serving as delicacies for many households in rural northern Ghana 

(Angelucci, 2013; Ratnavathi et al., 2016). The GGBL discovered sorghum as a perfect 

substitute for barley and as part of their local resource used policy, sorghum demand by 

GGBL for brewing has increased (Sarfo-Mensah, 2017). According to Sarfo-Mensah 

(2017), sorghum production has attracted majority of farmers in northern Ghana through 

the GGBL SOGS. Despite the importance of sorghum production, there is no empirical 

literature on its livelihood’s implications 

 

2.2.1 History of Sorghum Outgrower Schemes in Ghana  

The sorghum OGS in Ghana has its roots from European Cooperation for Rural 

Development (EUCORD) project, titled “West African Sorghum Value Chain 

Development” (WASVCD) which was launched in 2006. The project’s aim was to develop 

high-quality sorghum supply chain in West Africa to become a substitute for barley. Ghana 

and Sierra Leone were the pilot countries with initial funding of US$ 2,897,000 for 60 

months (European Cooperation for Rural Development (EUCORD), 2008; Paglietti & 

Sabrie Roble, 2012).  

According to EUCORD (2008), the stakeholders for the project in Ghana were 

Technoserve who played the lead role in managing and coordinating the activities of all 

the other stakeholders;  GGBL the end-user providing guaranteed market; Nucleus 



17 

 

Farmers, SHF, Outgrowers and Large-Scale Individual Farmers being the main producers; 

Credit Venture Capital Fund and Sinapi Aba Savings and Loans companies were the 

financial institutions providing monetary support; Dizengoff Ghana Ltd supporting with 

agro-inputs such as fertilizer and weedicides and training on safe use of agrochemicals; 

Savannah Agricultural Research Institute (SARI) for agronomic support and varietal 

release and Nasia Rice Company providing storage facilities. The project led to an increase 

in sorghum production in the target communities from 112, MT in 2005/6 to 904 MT in 

2006/7 and again, to 1,272 MT in 2007/8. The number of participating farmers also 

increased from 900 in 2005/6 to 3,210 and 5,670 in 2006/7 and 2007/8 respectively. After 

exit of this project, many companies and individuals engaged sorghum farmers in the 

Upper East, Upper West and Northern Region with GGBL still being the end-user 

providing guaranteed market.  

The structure of SOGS today comprises of SHF and medium to large scale farmers whose 

primary role is production. There are buyers popularly called aggregators buying from 

groups of farmers and supplying to big suppliers also called off-takers. The off-takers 

comprises of limited liability companies and Non-Governmental Organization (NGO) who 

signed contracts with GGBL. These actors deal with farmers directly by supporting them 

with inputs and other technical services to improve the quantity and quality of sorghum to 

meet the requirements of GGBL. They also support farmers with weather information and 

supply them with early maturing sorghum seeds to reduce the impact of climate change on 

their farming activities (Angelucci, 2013; Paglietti & Sbrie Roble, 2012). 

 

2.3 Agriculture and Economic Development in Africa  

Agriculture plays an important role in the socio-economic development of almost all 

countries in Africa (FAO, 2015; Saghir & Hoogeveen, 2017; AGRA, 2018; Ecker, 2018). 



18 

 

Its role ranges from poverty reduction, food security, job creation, boosting intra-Africa 

trade, rapid industrialization, sustainable resource and environmental management, 

economic diversification, shared prosperity and human security (AGRA, 2018; FAO, 

2018; New Partnership for Africa Development (NEPAD), 2013). In reviewing prospects 

and challenges of Africa agriculture performance, FAO (2018) reported 53% of the 718 

million total rural population in Africa as earning direct employment in the agricultural 

sector. The sector contributes 15% to Gross Domestic Product (GDP) on average, but the 

contribution varies widely across countries from under 3% in Botswana and South Africa 

to over 50% in Chad (NEPAD, 2013).  

Majority of the sector’s players are SHF who produce most of the food for domestic 

consumption and for export (AGRA, 2018). About thirty-three million farms of less than 

2 hectares per household exist in Africa (FAO, 2018). Irrespective of their numbers, SHF 

often do not harvest enough food for home consumption and for the market due to 

inadequate access to productive resources. Catalysing the activities of SHF has greater 

potentials to enhance rural development which is fundamental for the attainment of the 

Sustainable Development Goals (SDGs) in Africa (AGRA, 2018; FAO, 2017).  

There are several empirical literatures linking market imperfection to the inefficiency of 

SHF (AGRA, 2017, 2018). AGRA (2017) reported general poor crop yields among SHF 

in SSA and associated agricultural growth in the last three decades to area expansion. This 

type of growth is said to be unsustainable due to consistent decline in farm lands as a result 

of population growth (AGRA, 2017). According to FAO (2017), yield improvement base 

on crop intensification practiced in the developed countries is more sustainable and should 

be adopted by policy makers in SSA.  



19 

 

To improve their household incomes and mitigate consumption risks, SHF in most SSA 

countries rather adopted the option of diversifying their economic activities to include non-

farm activities such as trading, animal rearing and agro-processing (Snyder et al., 2015). 

The production constraints of SHF is likely to impact on their nutrition, food security and 

undernourishment among many households. Despite being reduced from the 1990-92 

figure of 33% to 23% in 2014-16, the absolute number of undernourished people in SSA 

remains relatively high (FAO, IFAD, & WFP, 2015). In absolute numbers, the 

undernourished people in SSA has increased from 44 million in 2014 to 218 million in 

2018 (AGRA, 2018; FAO, 2018).  

The huge opportunities in the agricultural sector to change the fortunes of the continent 

has not been fully harnessed. Apart from the few commercial agriculture projects covering 

a relatively small share of crop production that practiced an improved method of farming, 

proper application of improved farming practices among SHF is much lower (Gandhi, 

2014; Koira et al., 2014). Increasing population leading to limited land for a fallow period 

which has been the normal practice of Africa farmers to replenish their depleted soils and 

also a limited public investment in SHF threatened the sustainability of SHF crop 

productivity (AGRA, 2018; Ecker, 2018; FAO, 2015, 2018; Saghir & Hoogeveen, 2017). 

Despite the importance of SHF in ensuring food security in SSA, the focus of policies are 

usually on large scale industrial agriculture (FAO, 2018). Deeper thinking to unmask 

unexploited approach of transforming the activities of SHF is required for agricultural 

transformation that can impact on the SDGs in Africa. 

 

2.3.1 Agriculture and Economic Development in Ghana 

The agricultural sector plays an important role in the socio-economic development of 

Ghana. The sector leads in provision of food, raw materials for industry, job creation and 



20 

 

foreign exchange earnings(GSS, 2019). According the GLSS 7 report, the agricultural 

sector engages about 38.3% of the employed labour in Ghana compare to the services and 

industry sector of 43.5% and 18.2% respectively.  More rural dwellers of about 65.2% are 

employed in the agricultural sector compare to the urban dwellers of 11.8% (GSS, 2019). 

The agricultural sector in Ghana is divided into five sub-sectors. The crops, fisheries, 

livestock, cocoa and forestry/logging (figure 2.1).  

 
Figure 2.1: Agricultural Sub-Sectors in Ghana 

Source: MoFA (2017) 

 

The Ministry of Food and Agriculture (MoFA) is the lead ministry responsible for 

livestock and the crops sub-sectors which happened to be the largest among all the sub-

sectors (Ministry of Finance, 2018). The MoFA is also the lead government agency 

responsible for coordinating agricultural activities among the various ministries and other 

non-governmental organisations and is given the mandate to develop and execute policies 

and programmes within agriculture development agenda.  



21 

 

Ministry of Fisheries and Aquaculture Development is responsible for the fisheries sector 

(Ministry of Finance, 2018). For cocoa, MoFA provides technical support and the cocoa 

board oversees all operational issues (Ministry of Finance, 2018).  

The Ministry of Lands and Natural Resources (MLNR) is in charge of the forestry and 

logging sector (Ministry of Finance, 2018). Other ministries such as Roads and Highways; 

Environment, Science, Technology and Innovation; Health; and Trade & Industry also 

undertake related activities that support agricultural development in the country (MOFA, 

2015). The interconnectivity of various ministries suggests that the sector needs effective 

and holistic coordination of all the ministries for effective operations.  

Performance of Agricultural Sector in Ghana: The Agricultural Sector growth rates for 

the years 2010 to 2017, was projected at 6.0% (MoFAa, 2017). According to the 2017 

progress report of MoFA and the 2018 budget statement by the Ministry of Finance, 

between 2010 and 2016, the average growth rates for the agricultural sector was 3.5%. The 

lowest growth rate of 0.8% was recorded in 2011 and 5.7% in 2013. The low growth rate 

in 2011 was attributed to the poor performance of the fisheries (-8.7%) and 

forestry/logging (-14%) coupled with poor rainfall patterns. The sector’s performance, 

however, experienced significant improvement in 2017. The agricultural Gross Domestic 

Product (GDP) in 2017 was 8.4%, exceeding the 2016 growth rate by 5.4 percentage 

points. The crops sub-sector was the highest with an average growth rate of 9.4% in 2017 

(Ministry of Finance, 2018; MoFA, 2017).  

The introduction of government flagship programme “Planting for Food and Jobs (PFJ)” 

which provides farmers with subsidized fertilizer, high yielding seeds and extension 

services contributed to improvement in the agricultural performance in 2017 as presented 

in Figure 2.2.  



22 

 

The inconsistencies in the sector’s performance over the years as shown in figure 2.2 call 

for strategies that will attract consistent public and private investment due to its critical 

role in ensuring food security, poverty reduction and socio-economic development of the 

country.  

 
Figure 2.2: Real Annual GDP Growth Rate of the Agricultural Sector 2010 – 2017 

Sources Ghana Statistical Service (2018) 

 

2.3.2 Food and Agricultural Policies in Ghana  

The Food and Agriculture Sector Development Policy (FASDEP I & II) is the main 

government policy document governing the activities of MoFA and other related 

ministries in Ghana. The FASDEP I was formulated in 2002 as a holistic policy document 

targeting the private sector as the engine of growth (MoFA, 2007). The FASDEP I was 

formulated in line with the Accelerated Agricultural Growth and Development Strategy 

(AAGDS) and agricultural modernization agenda of the government. After four years of 

implementation of FASDEP I, Poverty and Social Impact Analysis (PSIA) was conducted 

and concluded that FASDEP I cannot achieve its objectives due to the following reasons:  

 Lack of proper targeting of the poor for the modernization agenda.  

0

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 Weak analysis of needs and priorities of the poor leading to wrong agenda setting. 

 No clear road map for the Ministry of Food and Agriculture to execute agricultural 

interventions that were outside the domain Ministry of Food and Agriculture 

(MoFA, 2007) 

Based on lessons learned from FASDEP I and upon broader consultation of stakeholders, 

the FASDEP II was formulated targeting fewer commodities and supporting all categories 

of farmers. It was also aimed to enhance the productivity of the agricultural commodity 

value chain by applying science and technology in production (MoFA, 2015). Six areas 

were identified as relevant for intervention under FASDEP II (MoFA, 2007).  

They are “Food Security and Emergency Preparedness; Improved Growth in Income; 

Increased Competitiveness and Enhanced Integration into Domestic and International 

Markets; Sustainable Management of Land and Environment; Science and Technology 

Applied in Food Production and Enhanced Institutional Coordination” (Boateng & 

Nyaaba, 2014; MoFA, 2007).  

Apart from the various areas targeted under the FASDEP II objectives, there were also 

specific policies and strategies for the various sub-sectors. These include “crop 

development policy, fisheries development policy, livestock development policy, and 

cocoa development policy”. Strategies developed for service delivery were “irrigation 

development strategy, extension services delivery strategy, agricultural mechanization 

strategy, plant protection strategy, financial services delivery strategies, inputs distribution 

strategy, gender mainstreaming strategy, youth in agriculture and human resource 

development strategy”(MoFA, 2007)  

According to MoFA (2007) inadequate allocation of funding, low prioritisation of food 

and agriculture sector by District Assemblies, inadequate response of other Ministries, 



24 

 

Departments and Agencies (MDAs) to agriculture sector policy initiatives, inadequate 

response of private sector to policy initiatives and inadequate response of producers to 

policy initiatives were the risk identified as constraint to the success of FASDEP II. Other 

risk areas identified were adverse dynamics in international trade regimes for agricultural 

commodities, down-turns in world prices of key agricultural export commodities, poor 

rainfall patterns, an outbreak of pests and diseases and low commodity prices on the 

domestic market.  

Foreseeing these risks and lack of mitigation strategy in the FASDEP II was a serious 

omission that might have affected the achievement of FASDEP II objectives. Low interest 

in private sector participation in agriculture and financial institutions engaging SHF was 

identified as a major setback to the success of FASDEP II (Awunyo-Victor & Al-hassan, 

2014; Mustapha et al., 2016).  

In conclusion, the FASDEP II objectives appear to contain broader range of issues in the 

various sectors that requires attention. The most importance issue identified by FASDEP 

II was the identification and targeting specific commodities with their potentials for 

investment. However, the challenge that limited the success of FASDEP II has to do with 

limited funding for investment areas identified, poor implementation of projects, low 

interest of key stakeholders, low technology uptake by the targeted farmers and poor 

institutional coordination were identified by literature as barriers to the success of 

FASDEP II (Abdul-Razak & Kruse, 2017; Fearon & Adraki, 2015)    

 

2.3.3 Medium Term Agricultural Sector Investment Plans in Ghana 

To operationalise the FASDEP II, the METASIP I & II were developed as investment 

plans for the medium term (MoFA, 2018). The METASIP I was designed for the period 

of 2011 to 2015 with the aim of stimulating private sector investment in the medium-term 



25 

 

(Boateng & Nyaaba, 2014). The aim was also to increase agriculture growth by at least 

6% annually with government increasing national budget allocation of at least 10% within 

the investment period (MoFA, 2015).  METASIP II was formulated to replace METASIP 

I for the period of 2014 to 2018 aiming at modernising agriculture.  

The investment under the METASIP I & II were largely executed as independent projects 

and treated as part of a range of projects. Even though the programme areas were designed 

as compliments, the interventions failed to meet the design requirements (MoFA, 2018).  

 

2.4 Ghana Government Agricultural Flagship Programmes 

Modernising the activities of SHF is government’s policy priority (MoFA, 2015, 2018). 

Before 2017, notable flagship programmes seeking to modernise SHF activities and 

improve their productivity were the Ghana Commercial Agricultural Project (GCAP); 

Multinational NERICA Rice Dissemination Project; Agricultural Mechanization Centres, 

Youth in Agriculture with Block Farming concept, National Food Buffer Stock Company, 

the Fertilizer and Seed Subsidy Programme (Diao et al.,, 2014; Fearon & Adraki, 2015; 

Safo, 2016; Samrat, 2013; Udimal et al., 2017; World Bank, 2012)  

As part of campaign to remove the bottlenecks stifling the growth of the private sector and 

to provide enabling environment for growth, job creation, and prosperity for all, the New 

Patriotic Party in their 2016 Manifesto outlined flagship programmes for agricultural 

transformation in Ghana (New Patriotic Party (NPP), 2016) 

These programmes include: “Planting for Food and Jobs, One District One Warehouse 

(1D1W), One District One Factory (1D1F), One Village One Dam (1V1D), Planting for 

Export and Rural Development (PERD) and Rearing for Food and Jobs” (Akoto, 2019; 

Ministry of Finance, 2018; New Patrotic Party (NPP), 2016).  



26 

 

The PFJ which was launched in April 2017 appears to be the government’s main 

agricultural modernization programme targeting SHF (MoFA, 2017b). The PFJ campaign 

is anchored on five pillars: Provision of improved seeds, the supply of fertilizers, provision 

of dedicated extension services, marketing and e-Agriculture (MoFA, 2017b). According 

to the 2017 monitoring report of MoFA, the implementation of PFJ in 2017 led to an 

increased in crop yields, improved extension services and creation of jobs (MoFA, 2017a). 

The 1D1W aim was to provide storage facilities to help address high postharvest losses 

that may be associate with expected bumper harvest due to the implementation of the PFJ.  

The 1D1F programme aimed was to establish at least, one factory in each of the 216 

districts in Ghana to create economic growth, create jobs and transform the economic 

structure from raw material export to private sector value-added industrialized economy 

(Ministry of Finance, 2018). 

The 1V1D targeted northern Ghana, part of Volta region and the northern part of Brong 

Ahafo region where dams are expected to be dug in every village to conserve water for 

domestic and agricultural activities” (New Patriotic Party (NPP), 2016) 

The PERD was a decentralised tree crop project to develop nine tree value chains in the 

various districts. The trees under consideration were: Cashew, Citrus, Coffee, Cotton, 

Coconut, Mango, Rubber, Oil Palm and Shea nut trees. The aim of PERD was expected to 

provide raw materials to feed the IDIF that was to be established. It was also to promote 

rural economic growth and improve household incomes of rural farmers through the 

provision of certified improved seedlings, extension services, business support and 

regulatory mechanisms (Farmer Helpline, 2018) 

whiles these bold steps by the government was necessary, there is no proper documentation 

of detail implementation plan, funding sources, actual implementation commencement and 



27 

 

exit plan. Information of the role of OGS on SHF productivity will be relevant to guide 

government implementation of its flagship programmes due to its private led 

modernization concept. 

 

2.5 Concept of Smallholder Farmers  

The conceptualization of smallholder farmers (SHF) varies across countries and context. 

While the SDGs Monitoring Framework refers to it as “food producers”, other literature 

calls it small farmers, family farms, peasant farmers or subsistence farmers (Dittoh & 

Akuriba, 2018; Garner & de la O Campos, 2014; Khalil et al., 2017; MoFA, 2007, 2017b; 

Murphy, 2012) 

Dixon et al. (2004) summarises SHF when they say “smallholder farmers refers to limited 

resource endowment of farmers compared to those of other farmers in the sector”. In the 

same vein, World Bank, (2003) explained the concept of smallholders as “those farms with 

low asset base and operating in less than 2 hectares of land”. For Brooks et al., (2009), 

smallholders are “farm households which struggle to be competitive, either because of 

their endowments of assets compare unfavourably with those of more efficient producers 

or because they have to content with under-developed markets”. Similarly, in Murphy 

(2012), smallholder farmers are “characterized by marginalization in terms of their access 

to credit, information technology and capital”. The Ministry of Food and Agriculture in 

Ghana (2016) maintains that, a farmer is SHF based on their level of resource endowment 

and landholdings of less than two (2) hectares.  

This study is much associated with the concept presented in the report of High-Level Panel 

of Experts on Food Security and Nutrition (HLPE) in 2019. According to the  HLPE 2019 

report, “ smallholders are agricultural holding run by a family using mostly (or only) their 

own labour and deriving from that work a large but variable share of its income, in kind 



28 

 

or in cash. The family relies on its agricultural activities for at least part of the food 

consumed, be it through self-provision, non-monetary exchanges or market exchanges. 

The family members also engage in activities other than farming, locally or through 

migration. The holding relies on family labour with limited reliance on temporary hired 

labour, but may be engaged in labour exchanges within the neighbourhood or a wider 

kinship framework”.  

As stated by Narayanan (2002), one of the reasons why the sole consensus around the 

concept of SHF may lack an agreed definition is the wide variety of farm structures and 

characteristics across different contexts and geographical locations. Much literature 

mentions the absence of such agreement, but few papers venture proposing acceptable 

definition. 

In the policy debate, the notion of “smallholder farmers” goes hand in hand with the idea 

of disadvantage, risk of poverty, lack of opportunities, and need of support. Hence an ideal 

definition should be consistent with the concepts of absolute poverty, severe food 

insecurity and access of optimal-productive resources and must be based on a criterion that 

does not necessarily depends on outcomes that have to be measured.  

Following the various debates Brooks et al. (2009); Garner & de la O Campos (2014); 

HLPE (2019); Khalil et al. (2017); Murphy (2012); Narayanan (2002) and World Bank 

(2003), this study summarises the definition of SHF as the one who is disadvantaged in 

access to optimal productive resources, lack of market access, marginalized in policy 

space, food insecure, absolute poverty and dependent on less than five (5) hectares of land 

for farming activities. Sorghum SHF are therefore defined as sorghum farmers who are 

dependent on not more than five hectares of land for cultivating sorghum and other crops, 



29 

 

are disadvantaged in access to optimal productive resources, lack of market access, food 

insecure, absolute poverty and are marginalized in the policy space. 

 

2.5.1 Smallholder Farmers Crop Productivity and Profitability  

The term productivity has largely been used to express different meanings and has 

provoked many conflicting interpretations. It is sometimes regarded as the overall 

efficiency with which a production system works, while on other occasions, it is defined 

as a ratio of output to the application of a given resource (Darku et al., 2016; Dharmasiri, 

2012).   

Profitability, on the other hand, is the difference between the cost of production and yield 

per production area, usually, measured by kilograms per acre or per hectare (Devkota et 

al., 2019; Montgomery et al., 2017; Wünsch, Gruber et al., 2012). The main variable 

differentiating profitability and productivity is cost of production and price. While a farmer 

may obtain higher productivity, when the cost of production is high and selling price is 

low, that farmer is likely to make losses. On the other hand, lower productivity, low cost 

of production and higher prices can lead to higher profitability (Devkota et al., 2019; 

Montgomery et al., 2017; Wünsch et al., 2012). The table 2.1 shows average and actual 

productivity in Ghana for major crops for the 2016 farming season.   

 

 

  



30 

 

 Table 2.1: Productivity of Major Staple Crops in Ghana 

Staple crops Achievable yield Actual yield % Achieved 

Maize 5.50 2.05 37.27 

Rice (Paddy) 6.00 3.01 50.17 

Cassava 45.00 20.68 45.96 

Yam 52 16.74 32.19 

Sorghum 2.00 1.24 62.00 

Soybeans 3.00 1.70 56.67 

Source: MoFA (2017) 

 

In Ghana, SHF productivity and profitability is a reflection of the condition under which 

they operate. Most farm holdings of SHF are less than 5 hectares per household and 

dependent on traditional production technologies. There abounds considerable evidence 

of productivity gaps of SHF in Ghana (Villano et al., 2019). Table 2.1 contain 2017 

national productivity of major staple crops in Ghana. Smallholder farmers face numerous 

challenges in production, ranging from limited or lack of access to technical assistance, 

modern inputs, access to credit, and mechanization services (Al-Hassan et al., 2013; 

Baiyegunhi et al., 2019; Donkor & Owusu, 2019; Feleke et al., 2017). These constraints 

led to their actual yields falling below their potential yields leading to low incomes and 

food insecurity. The efforts to address the yield gaps should be relentless if the contry can 

make significant in her support to achieving the SDG’s, especially, goals one and two. 

The table 2.2 contains trend of productivity in metric tonnes per hectare from 2013 to 2017.  

There was increase in productivity of some staple crops but the increment is still below 

the achievable yields for almost all the crops. The achievable yields for sorghum for 

instance was 2 tonnes per hectare (table 2.1), but the highest yield ever achieved was 1.24 

in 2017 implying opportunity for sorghum farmers to make more income through the 

adoption of yield improvement programmes.  



31 

 

Table 2.2: Trends of Productivity in Crops (MT/Ha) in Ghana  

Crop 2013 2014 2015 2016 2017* % Change 

Maize 1.72 1.73 1.92 1.99 2.05 3.0 

Rice (Paddy) 2.64 2.69 2.75 2.92 3.01 3.1 

Millet 0.97 0.96 0.97 1.16 1.05 -9.5 

Sorghum 1.14 1.14 1.00 1.14 1.24 8.8 

Cassava 18.27 18.59 18.78 20.25 20.68 2.1 

Yam 16.78 16.63 16.96 17.42 16.74 -3.9 

Cocoyam 6.50 6.48 6.49 6.53 6.79 4.0 

Plantain 10.81 10.74 10.90 11.17 11.77 5.4 

Groundnuts 1.24 1.28 1.24 1.30 1.37 5.4 

Cowpea 1.24 1.21 1.25 1.41 1.37 -2.8 

Soyabean 1.64 1.63 1.65 1.65 1.68 1.8 

Source: MoFA (2017) 

 

2.5.2 Postharvest Loss Among Smallholder Farmers   

Postharvest loss (PHL) is defined as a measurable decrease in the edible part of the food 

available for consumption but never made it to the consumer’s table (Chegere, 2018; 

Kiaya, 2014) Postharvest loss concerns have received global attention due to its effects on 

food security and the environment. The Food and Agricultural Organisation of The United 

Nations put the value of PHL in SSA as 4 billion USD a year (Sheahan & Barrett, 2017). 

This figure exceeds the total food aid received in SSA over the last decade. For the World 

Bank (2011), crop production constitutes about 70 percent of incomes in SSA of which 10 

to 20 percent crops are loss through post-harvest. The annual value of the losses is 

estimated at USD 4 billion which is equivalent to calorific requirement of 48 million 

people annually in SSA (Wold Bank, 2011) 

Reducing PHL does not only improve SHF profitability, but also contribute to reduction 

in climate change, help stabilize the import bill due to limited resources invested in 

importation of food and improve labour productivity due to healthy living as a result of 

consuming less poisonous food (Affognon et al., 2015; Goldsmith et al., 2015; Rembold 

et al., 2014)  



32 

 

Causes of PHL in developing countries is attributed to poor postharvest infrastructure, 

limited access and application of improved technology in food production and harvesting, 

high illiteracy among farmers to follow appropriate harvest and postharvest management 

practices, poor extension services and unfriendly weather conditions (Affognon et al., 

2015; Chegere, 2018; Sheahan & Barrett, 2016; Wold Bank, 2011)  

In Ghana, most SHF depends on outmoded harvesting methods, stored their harvested 

produce in unhygienic conditions after harvest exposing them to pest, unfriendly weather 

leading to high PHL (Affognon et al., 2015). Postharvest loss and its implication to food 

security have received global attention but investment in PHL reduction in Ghana is still 

very low (Ministry of Finance, 2018). Some selected initiatives in Ghana to address PHL 

include the Warehouse Receipt System, Ghana Commodity Exchange program; One 

District, One Warehouse and establishment of National Food Buffer Stock Company 

(Ministry of Finance, 2018; MoFA, 2017b, 2018). Coulter & Onumah (2002) articulated 

the importance of regulated warehouse receipt system in addressing marketing challenges 

and emphasised the need to encourage stakeholder participation for effective 

implementation. 

Another major challenge to the PHL campaign is lack of comprehensive data on PHL loss 

for various crops. Limited knowledge in measuring PHL has led to oversimplification or 

overestimation of loss figures on most occasions. Sometimes estimates of a single national 

figure for a year are constantly being quoted for several years (MoFA, 2016). FASDEP II 

estimated PHL in 2007 as 20%-50% for fruits, vegetables, roots and tubers, and 20%-30% 

for cereals and legumes (MoFA, 2007). These figures are constantly being quoted and 

have now become an accepted figure for PHL in Ghana. The approach may be misleading 

since PHL in a given crop varies from other crops and varies across seasons (MoFA, 2016). 

At the 2018 biannual review meeting held in Gabon Brazzaville to assess Africa countries' 



33 

 

progress towards achieving CAADP commitments, PHL was not among the indicators for 

Ghana due to lack of data (Kiaya, 2018). Uncertainty in estimating PHL and lack of 

reliable data of specific PHL loss in a given crop in Ghana could lead to poor policies to 

address losses and also, sub-optimal choices of strategies to reduce the losses.  

Various literature attempted to estimate the postharvest loss in cereals, specifically, in 

sorghum. They suggested seven stages where losses normally occur  (Kiaya, 2018; 

Kitinoja & Kader, 2015; Sheahan & Barrett, 2016). These are a pre-harvest stage, 

harvesting, and initial handling, gathering and heaping, transportation/ carting, 

winnowing/threshing, drying, and storage.  

Pre-harvest sorghum loss occurs when there is damage to the grain in the field before 

harvesting. This could be due to biological and biotic factors such as poor control of weeds, 

insects, pests and diseases (FAO, 2011). Most SHF pre-harvest practices are poor due to 

limited investment, limited extension services and high level of illiteracy among SHF to 

follow good farming practices (MoFA, 2017). 

Harvesting and initial handling factors: Sorghum harvesting and handling are done 

manually by most SHF. During the harvesting stage, losses are mainly due to shattering 

and shedding of grains with the amount of loss largely dependent upon the duration of 

harvesting (FAO, 2014b). Over maturity and delayed harvesting is reported to be a major 

factor contributing to postharvest loss at harvesting stage (Huang et al., 2017; Jones et al., 

2018). In Ghana, farmers leave harvested grains on the field to dry because they lack 

drying facilities (MoFA, 2017a).  

Gathering and Heaping:  Gathering and heaping of sorghum is usually done by women 

and children (MOFA, 2016). After harvesting, the sorghum grain heads are gathered and 

heaped on the farm to either be transported to the farmhouse or to be threshed. Within the 



34 

 

heaped period, substantial proportion of grains are either damaged, loss or contaminated. 

This is due to rainfall, high moisture content or pest infestation (Akuriba & Asuming-

Brempong, 2012). 

Drying: Normally, grains are dried on bare grounds before carting for threshing (Kitinoja 

& Kader, 2015). Farmers who primarily depend on this method of drying are faced with 

challenges in the raining season. Also, the tendency of pests and rodents to attack during 

this period is high (Hengsdijk, 2017). Grains dried on bare floor could be contaminated 

with foreign materials, dirt, rainfall, pests, insects, livestock and bird attack (Kiaya, 2018). 

The solar driers are recommended for grains but highly expensive for SHF to afford. 

Threshing and winnowing: Threshing of sorghum is still a major challenge. Most SHF 

depends on manual threshing using sticks to separate grains from the thresh (MoFA, 2017). 

This process leads to losses due to splashing or incomplete threshing. When the harvest is 

threshed before it is fully dried, some grains will remain in the stalks and if the grain is 

threshed when is damp and immediately stored, it will be much more susceptible to micro-

organisms and aflatoxin contamination (Africa Union, 2018). Limited availability of 

threshers for sorghum is a major cause of sorghum postharvest loss. 

Storage: Storage is an important activity in the postharvest chain as it allows farmers to 

keep their grains for good prices and for future consumption (Gitonga et al., 2013; 

Hengsdijk, 2017). Good quality grains can only be realized if the storage conditions are 

appropriate. Improper storage can cause stored sorghum to be contaminated by aflatoxin 

and also, pest and rodent infestation (Affognon et al., 2015; HLPE, 2014; Neme & 

Mohammed, 2017). Storage losses in Ghana are on-farm, household-level storage or 

market storage. According to FAO (2014), on-farm storage losses are between 4-10 while 

market storage is between 1-2%.  For Rembold et al. (2014), on-farm storage is between 



35 

 

2-5% and 2-4% on market storage for grains.  Limited warehouses compelled SHF to either 

store their sorghum on the farms or in their rooms leading to pest infestation leading to 

grain losses (Rembold et al., 2014). As part of the government’s agricultural flagship 

projects, warehouses are being constructed to help reduce storage losses. 

Transportation/carting: Transporting sorghum is another herculean task as in Ghana and 

many parts of Africa, women and children have to convey farm produce on their heads 

and shoulders to the nearest farmhouses (Africa Union, 2018). According to FAO (2014), 

grains losses due to poor transportation is between 1-2%. Produce are usually conveyed 

by women using head pans, baskets and on few occasions, animal tracking such as bullocks 

and donkey carts are commonly used (MoFA, 2007). Some farmers also engaged the 

services of motor tricycle popularly called “motor- king” for a fee. Farm produce are 

normally transported between the farmer's fields to where grains are threshed and the 

threshing floor to the storage centre and to the markets. Transportation could be made 

easier with motor trucks or cars but this is dependent on the availability of access roads 

and farmers’ ability and willingness to pay for the transport cost (Hell & Mutegi, 2011). 

The degree of grain loss during transportation is mostly proportional to the distance from 

the farm to the final destination (Rembold et al., 2014). 

   

2.5.3 Smallholder Farmers and Climate Change  

Climate change and its impact on the environment and socio-economic activities of 

communities is a major concern for policy makers in SSA (Abdul-Razak & Kruse, 2017; 

Pandey et al., 2017; Thompson, Berrang-Ford, & Ford, 2010) . According to (Porter et al. 

(2014), climate change in the last 30 years has contributed to a declining agricultural 

performance between 1% to 5% per decade. The world poorest are said to suffer more 

from the impact due to their weak capacity to adapt (Adeyeri et al., 2019).  



36 

 

Climate change data in Ghana from 1961 to 2000 shows a progressive increase in 

temperature and declined to mean annual rainfall pattern in all the six agro-ecological 

zones (UNEP & UNDP, 2013). The annual average temperature has increased by 1°C in 

the last 30 years. (UNEP & UNDP (2013) projected temperature to continue to rise, while 

rainfall is predicted to decline in all agro-ecological zones in Ghana (Table 2.3 and Table 

2.4)  

Table 2.3: Mean Annual Change in Rainfall (%) in Ghana 

Year   Sudan  Guinea Transitional  Deciduous  Rainforest  Coastal  

2020  -1.1 -1.9 -2.2 -2.8 -3.1 -3.1 

20150  -6.7 -7.8 -8.8 -10.9 -12.1 -12.3 

2080  -12.8 -12.8 -14.6 -18.6 -201.2 -20.5 

Source: Minia et al. (2004) 

 

 

Table 2.4: Projected Mean Annual Temperature Changes in Ghana 

Year  Sudan  Guinea Transitional  Deciduous  Rainfores  Coastal  

2020 0.8 0.8 0.8 0.8 0.8 0.8 

20150 2.6 2.5 2.5 2.5 2.5 2.5 

2080 5.8 5.4 5.4 5.4 5.4 5.4 

Source: Minia et al. (2004) 

 

The climate change situation is more serious in northern Ghana which has increasing 

number of droughts, floods and bushfires. The SHF with minimal livelihoods alternatives 

are largely affected by the impact (Aniah et al., 2019; Dickinson et al., 2017; Etwire et al., 

2013). Majority of SHF in northern Ghana rely on rainfed for their agricultural activities 

and any variations in the rainfall pattern translate to low farm productivity, lower-income 

and high vulnerability (Morton, 2013; Yaro, 2013). According to Abdul-Razak & Kruse 

(2017), since patterns and volumes of rainfall determines agricultural productivity in 

northern Ghana, people whose livelihoods depends on agriculture would be largely 



37 

 

affected. According to Antwi-Agyei et al. (2018), crop yields are estimated to reduce in 

Ghana by 7% by 2020 as a result of the projected decline in rainfall which would 

negatively affect SHF more since their main economic activity is farming.  

It is important to acknowledge the efforts of researches seeking remedy to address the 

impact of climate change on vulnerable communities. Most of the studies centred on farm-

level resilience and adaptation strategies (Adu et al., 2018; Dzanku, 2015; Etwire et al., 

2013; Yaro, 2013). Limited studies examined specific interventions that increases incomes 

of SHF and indirectly empowers them to become less vulnerable. Knowing the level of 

vulnerability among various groups of farmers and the impact of a specific agricultural 

intervention that has demonstrated positive impact on livelihoods would be an ideal step 

for policymakers. Information on SOGS and its effect on SHF farmers' profitability and 

subsequently, their vulnerability is relevant. 

 

2.5.4 Smallholder Farmers Vulnerability to Climate Change  

There are different definitions of climate change vulnerability. The most comprehensive 

definition commonly applied in literature is the one by IPCC 2009 authored by Hahn 

Riederer and Foster (2009).  Hahn et al. (2009) defines climate change as “the degree in 

which a system is susceptible and unable to cope with adverse effects of climate change 

while vulnerability is a function of magnitude and rate of which a system is sensitive, 

exposed and adapt to changes in climate” (Hahn, Riederer, & Foster, 2009). 

Vulnerability is usually considered a function of three elements. “sensitivity to hazard, 

exposure to hazard and the capacity of that system to adapt to the hazard as a result of the 

climate change”(Adu et al., 2018; Chinwendu et al., 2017; Hahn et al., 2009; Jamshidi et 

al., 2019). Chinwendu et al. (2017) have argued that vulnerability explains the degree of 

risk and inability of a system to resist to the climate variations. The exposure is the degree 



38 

 

to which a system is exposed to the effect of changes in climate and sensitivity is the extent 

to which a system is impacted adversely or positively by climate change.   

Smallholder farmers in Ghana face a wide range of climate-related risks ranging from 

weather failure, total crop failure, market risk, postharvest loss with negative effects on 

livelihoods (Jamshidi et al., 2019; Lahouar et al., 2016; Makate et al., 2019). How to 

withstand this climate shocks has been the concern of many researchers. Most studies 

focus on identifying adaptation and coping strategies by SHF to reduce the adverse impacts 

on their livelihoods  (Antwi-Agyei, Dougill et al., 2018; Boansi et al., 2017). Other studies 

such (Abdul-Razak & Kruse, 2017; Etwire et al., 2013; Yaro, 2013) have explored 

strategies that local institutions adopt to promote climate change adaptation in northern 

Ghana. Some studies also focused on the role of indigenous knowledge in farming to 

address the adverse effect of climate change on livelihoods (Bhattacharjee & Behera, 

2018; Pandey et al., 2017)  

There exist limited studies exploring interventions that link farmers and business entities 

such as agribusiness companies who support farmers to improve their productivity and 

profitability and how such interventions could empower farmers to indirectly become less 

vulnerability to climate change. It is against this backdrop that this study examines OGS 

to establish its appropriateness to deal with the diverse constraints inhibiting the 

performance of SHF and enhance their livelihood outcome. The possibility of SHF 

attaining higher income through out-grower schemes and by inference, improved 

livelihoods is reported by Minot (2015); Maertens & Velde (2017) and Ragasa et al. 

(2018). 



39 

 

2.6 Outgrower Scheme Debate 

In the era of globalization and market liberalization, there are globally concerns of the role 

of SHF in the market economy due to their subsistence nature (Almas & Obembeb, 2014; 

Koira et al., 2014; Gaffney et al., 2019). Smallholder farmers could be marginalised as the 

agribusiness companies may capitalise on the market opportunities to take over their lands 

(Eaton & Shepherd, 2001). This could lead to farmers abandoning farming activities for 

alternative livelihoods which has been the case in most developing countries (Bellemare 

& Bloem, 2018; Jayne et al., 2016). Attempts by policy makers to avert the situation  is by 

providing rural communities with social support services such as subsidising farm inputs 

(FAO, 2014a; Saghir & Hoogeveen, 2017). Several impact assessments reports proved 

that government interventions in Ghana has minimal impact on the beneficiaries (Fearon 

& Adraki, 2015; ISSER, 2012). 

Following  Maertens & Velde (2017) and Fawad et al. (2019), OGS is recommended as 

appropriate in  dealing with these challenges. The OGS provides linkages and offers 

important pathway for SHF to obtain improved agronomic services and inputs and also, 

approach their farming with business mindset. These services and support systems apart 

from demographic characteristic of the farmers such as gender and age, are said to be the 

main motivations for SHF participation in OGS and also, modernising their farming 

activities (Gebrezgabher et al., 2015; Ghimire et al., 2015; Gover, 1990; Mariano et al., 

2012; Udimal et al., 2017). Recent report by Ragasa, Lambrecht, & Kufoalor (2018) and 

Fawad et al.  (2019) supported the earlier reports on benefits of OGS to SHF claimed that, 

the OGS also creates opportunities for farmers to access market and industries to obtain 

their raw materials from farmers. 

The OGS is defined as a business transaction between farmers and buyers for the purposes 

of production and supply of agricultural commodities based on formal or informal prior 



40 

 

agreement (Minot & Nicholas, 1986; Eaton & Shepherd, 2001). Minot (2011) defined 

OGS as an existing ad hoc trade arrangement being replaced with well-structured 

commercial trade arrangement between farmers and traders leading to a vertical 

integration in a given agricultural value chain.  Food and Agricultural Organisations of the 

United Nation in 2012 integrates the above definitional schisms to define OGS as supply 

agreements between agribusiness companies and farmers leading to mutual gains (Paglietti 

& Sabrie Roble, 2012)  

The OGS and contract farming are often used interchangeably in literature (Bellemare, 

2012; Bellemare & Bloem, 2018; Ragasa et al., 2018; Wendimu et al., 2016). 

There are however some subtle differences between the two schemes depending on how 

the arrangement is made and who initiates and controls the scheme. According to Glover 

& Kusterer, (1990), contract farming is a private-led scheme while