Groundnut Market Participation in the Upper West Region of Ghana

Abstract

Agricultural commercialisation is observed to be low in Ghana despite the focus of policy and efforts on increasing the rate of commercialisation. While there are significant differences of market  commercialisation across regions, the Upper West Region has one of the least average marketed surplus  ratio. Using a household survey data for the 2011 production season in the Upper West Region, this paper  quantified the magnitude and direction of effects of factors influencing smallholder groundnut farmers’  intensity of market participation using the Tobit model. The Household Commercialisation Index was first  used to estimate the intensity of market participation. The results showed that about fifty-three percent  of the output of groundnuts was sold in the  region within the production year, which indicated a moderate commercialisation index. The results also  indicated that marital status, output, mobile phone ownership, credit access, access to market information  and form of sale were the most influencing variables to participation decisions. The paper concluded that  groundnut was basically produced as a cash crop for the market to enhance household income. The paper recommends that the Ministry of Food and Agriculture needs to enhance groundnut productivity through access to extension services, use of improved and high yielding varieties as well as the use of good agronomic  practices.

Keywords: Household Commercialisation Index, Tobit Model, Intensity of Market Participation, Smallholder Groundnut Farmers, Upper West Region