Financing agriculture for inclusive development

Issahaku, Haruna; Asiedu, Edward; Nkegbe, Paul Kwame; Osei, Robert Darko

doi:10.4324/9780429450952-11

Cited by 4 publications

(1 citation statement)

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“…A number of factors account for this unfortunate outcome including pervasive credit constraints. Previous studies assert that small holder farmers especially those in rural dwellings have limited access to credit (Sekyi et al , 2017; Issahaku et al , 2020). For instance, according to Sekyi et al (2017) only 30.6% of the households sampled from the Savannah Ecological Zone of Ghana had access to credit with about 85% of the same sample being credit constrained.…”

Section: Introductionmentioning

confidence: 99%

Agricultural labour productivity and credit constraints: implications for consumption in rural Ghana

Issahaku

Mahama

Addy-Morton

2020

AJEMS

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PurposeThe purpose of this study is to assess the impact of credit constraints on agricultural labour productivity as well as the impact of credit constraints and agricultural labour productivity on rural households' consumption in Ghana.Design/methodology/approachThis study uses the Ghana Living Standard Survey round six (GLSS 6) as the main source of data, which happens to be one of the most comprehensive household datasets in Ghana. Quantitative estimation techniques (namely: Endogenous Switching Regression and Two Stage Least Squares) are used to address possible endogeneity and selection into credit markets.FindingsFirst, large households are prone to credit constraints while age (experience) and compliance with extension advice reduce credit constraints. Second, the determinants of agricultural labour productivity for both constrained and unconstrained households are age, sex, farm equipment, herbicide and farm size. Third, household size, education and livestock rearing influence agricultural labour productivity of constrained households. Fourth, credit constraints, irrespective of how they are measured, impede agricultural labour productivity while access to credit fosters labour productivity. Lastly, credit constraints robustly reduce consumption while agricultural labour productivity strongly enhances rural households' consumption.Originality/valueThe first contribution is that, unlike most previous studies, we do not focus on the widely used measure of productivity – output per unit land, but on agriculture labour productivity in particular. Secondly, unlike most previous studies which examine the effect of credit constraints either on productivity alone or consumption alone, our study examines the impact of credit constraints on both. Thirdly, unlike the existing literature which uses one or two measures of credit constraints, we use a wide range of measures of credit constraints – seven different measures of credit constraints. Lastly, our empirical strategy solves at least two critical econometric problems – sample selection bias and endogeneity.

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Section: Introductionmentioning

confidence: 99%