Fertilizer subsidy in Ghana: a gain or loss of cocoa productivity?

Abstract

PurposeThe authors investigated cocoa farmers' access to subsidized fertilizer in Ghana and implications on productivity.Design/methodology/approachPrimary data were sourced from 435 cocoa farmers. Cragg hurdle and two-step Tobit model with continuous endogenous regressors/covariates were applied for the drivers of cocoa farmers' participation in fertilizer subsidy programme and productivity. Propensity score matching (PSM), inverse-probability weights (IPW) and augmented inverse-probability weights (AIPW) were applied for productivity impact assessment of fertilizer subsidy.FindingsAll the farmers were aware of fertilizer subsidy for cocoa production in Ghana. Farmers became aware of fertilizer subsidy through extension officers, media and other farmers. Half of cocoa farmers benefitted from fertilizer subsidy. Averagely, cocoa farmers purchased 292 kg of subsidized fertilizer. Many socio-economic, farm-level characteristics and institutional factors determine cocoa farmers' participation in fertilizer subsidy programme, quantity of subsidized fertilizer obtained and productivity. Beneficiaries of fertilizer subsidy recorded higher cocoa productivity than non-beneficiaries. Hence, fertilizer subsidy for cocoa production in Ghana leads to a gain in productivity.Practical implicationsThere should be more investments in fertilizer subsidy so that all cocoa farmers benefit and obtain the required quantities.Originality/valueThe authors provide new evidence on cocoa productivity gain or loss emanating from fertilizer subsidy by combining different impact assessment techniques for deeper analysis: PSM, IPW and AIPW.