Analyzing the Cost and Returns of Smallholder Farmers: A Case of Asante Akim South in Ghana

Abstract

Managing crop production as a business among smallholder farmers is a challenge. This farmers' survey therefore assessed farm activities and their economic implications to smallholder farmers, with special reference on cocoa farmers, using structured questionnaire. Farmers and their household were found to be greatly involved in providing labour for all key farm activities such as weed management, pesticide application and harvesting. This labour was not priced by most farmers and therefore estimated expenditure on managing the farms were lower than actual cost incurred. Cocoa formed 75% of total landholdings with 3-4 acres and < 3acres being the modal farm size for cocoa and supplementary crops (vegetables, plantain, oil palm, cassava and maize) respectively. Although applying fertilizer to cocoa increased yield by over 144%, majority of the farmers did not consistently apply it due to purported high price. Vegetables were the only crop that fertilizer was consistently applied to, and even that it was below recommended rates. Yearly variable margin from cocoa treated with fertilizer was GHS 837 (US$ 190)/acre compared to GHS 548 (US$ 125)/acre of cocoa without fertilizer, thereby justifying the use of fertilizer. The annual variable margin from supplementary crops ranged GHS 162-274 (US$37-62)/acre/year, depending on the type of crop. Based on the statistical mode of 4-6 persons per household, 3-4 acres of cocoa and 0.5-2.5 acres of supplementary crops, the yearly returns of GHS 2,511-3,348 (US$ 570-761) from cocoa (with fertilizer) and GHS 81-685 (US$ 18.41-155.68) from supplementary crops was inadequate. Promoting other low capital input ventures like snail rearing, mushroom production and bee keeping will be of immense support to the farmer's household.