Rural non-farm engagement and agriculture commercialization in Ghana

Abstract

PurposeGhana's economy is largely agrarian, and the business of agriculture is dominated by smallholder farmers who are predominantly rural dwellers. As a result, efforts to lift rural farming households from poverty have been narrowed to the promotion of agricultural development to the neglect of the rural non-farm sector. However, this is fast changing in the advent of a burgeoning rural nonfarm economy and must engage the attention of policy actors. This study thus assesses the effect of non-farm participation on households' level of commercialization of agricultural crops in Ghana.Design/methodology/approachThe study applies a generalized structural equation model (GSEM) to the Ghana Living Standards Survey round 6 dataset, a stratified and nationally representative random sample of 16,772 households in 1,200 enumeration areas.FindingsThis study finds that non-farm participation increases the produce sold to output ratio. It is concluded that non-farm engagement by farmers boosts commercialization in Ghana. Thus, for the Ghanaian and similar contexts, agricultural development interventions that incorporate non-farm activities are more likely to be successful in improving livelihoods.Research limitations/implicationsThe study uses only the ratio of sales value to output value definition for commercialization and acknowledges use of multiple definitions could be superior.Originality/valueVarious empirical studies have examined the link between the farm and nonfarm sectors. This paper is original in its approach as it tackles an aspect of the subject that has been understudied, namely, an exploration of nonfarm and farm linkages from the perspective of agricultural commercialization.

Groundnut market participation in Zimbabwe: A case of Makoni District

“…The result is contrary to the studies by Rubhara and Mudhara (2019) and Abebe and Debebe (2020), who found off-farm income to be negatively related to market participation. However, a study by Nkegbe et al (2023) found similar results to this study where non-farming activities enhanced the market participation of farmers in Ghana.…”

“…This section reviews several previous studies that found different factors to influence smallholder farmers' decision to participate in output markets. Market participation has been positively associated with several factors such as ownership of private assets, access to credit, input use, access to extension services and off-farm income or activities (Boughton et al, 2007;Siziba et al, 2011;Omiti et al, 2009;Olwande and Mathenge, 2012;Geremewe, 2019;Hanyani-Mlambo et al, 2021;Nkegbe et al, 2023). However, these studies' findings are inconclusive, especially among smallholder farmers.…”

Guest editorial: Introduction to the special issue on productive employment in rural farm and non-farm sectors in sub-Saharan Africa

“…Since the paper focuses solely on six specific entrepreneurial competencies, of which only two have been identified as significant factors influencing farmers' welfare, future research could expand the scope by considering additional variables. Nkegbe et al (2024) analyzes the effect of non-farm participation on households' level of commercialization of five crops. Ghana's economy is largely agrarian, and the agriculture business is dominated by smallholder farmers who are predominantly rural dwellers.…”

“…Nkegbe et al . (2024) analyzes the effect of non-farm participation on households' level of commercialization of five crops.…”