Search

Lending to the agricultural sector by commercial banks in Ghana is characterized by high credit risk. Empirical evidence suggests that commercial banks in Ghana have credit risk management (CRM) challenges. This study explores the credit risk mitigation strategies adopted by commercial banks to minimize credit risk in agricultural finance in Ghana. The study adopted a mixed-method approach using a survey questionnaire and interview instruments. The findings indicate that some of the strategies used by commercial banks to mitigate credit risk in agricultural finance do not meet commercial banks' CRM needs. In addition, Ghanaian commercial banks have not fully adopted some of the recommended strategies that are used to mitigate credit risk associated with agricultural lending. The study unveils some appropriate strategies used to mitigate credit risk exposure in agricultural finance among commercial banks. These strategies include agricultural value-chain financing, collaboration with off-takers, incentive-based and risk-sharing schemes, adoption of a holistic agricultural value chain financing, policy interventions, use of agricultural insurance pool, and the proper structuring of agricultural loans. [ABSTRACT FROM AUTHOR]

Purpose: The cost of agricultural loans is a major constraint to the growth of the agriculture sector. This paper examines agricultural loan pricing by banks in Ghana using panel data analysis. Design/methodology/approach: Data were obtained from audited financial reports of 15 agricultural loan lending banks from 2010 to 2017. The study applies the random-effect model and the fixed-effect model in the analysis and uses the system generalized system method of moment to check the robustness of the results from the baseline models. Findings: The study found that agricultural loan pricing by banks is significantly influenced by risk premium, cost of funds, loan impairment, agricultural growth rate and food inflation. Banks should leverage emerging technologies to de-risk agriculture loan pricing to allay the fear of default. Farmers should look for long-term and relatively cheaper funds to support agricultural loans. Increasing credit to the agricultural sector could increase output, thereby reducing food inflation uncertainty for competitive pricing of agricultural loans. Originality/value: Agriculture employs about 52% of Ghana's labor force, contributing about 20% to GDP. But it is "under" financed. This study leads the way in unraveling the factors accounting for the high prices of agricultural loans in Ghana. This study further contributes to policy development toward increasing credit to the agricultural sector. [ABSTRACT FROM AUTHOR]

The adoption of advanced agricultural technologies in Sub‐Saharan Africa remains disappointingly low, particularly among the millions of poor smallholders who account for most of the agricultural production. We conducted a randomized control trial in Ghana to assess the impact of easing drought‐risk constraints in the agricultural credit market, by bundling joint liability agricultural loans with index insurance, on smallholder farmers' agricultural technology adoption decisions. In the micro‐insurance treatment, any index insurance payouts go directly to farmers, while in the meso‐insurance treatment, payouts are issued to banks to be used to expunge farmers' debts. We find evidence that bundling joint liability lending with micro‐insurance increases adoption of fertilizer. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this research is to examine the impact of alterations in the path of monetary policy rates on inflation via the supply side of an emerging economy. Design/methodology/approach: The study employed semi-annual data covering the period 2007S1 to 2020S2 on the inflation rate, the combined outputs of industry and agriculture, the lending rate, and the monetary policy rate. The vector autoregression model was estimated and counterfactual simulation exercises were conducted. Findings: The study revealed that a move from a higher to a lower monetary policy rate regime resulted in a shift in inflation from a higher to a lower regime. In particular, a 200-basis point reduction in the monetary policy rate over the simulation horizon produces a 1.3% fall in the inflation rate over the same period. Research limitations/implications: The study has a limitation due to the unavailability of a long-span dataset on all relevant variables. As a result, it is important to exercise caution when interpreting the study's findings. A potential area for further research is to explore how changes in interest rates impact inflation in the real economy by utilising other multiple-variable time series techniques. Practical implications: It is the opinion of the authors that for inflation in Ghana to move to a lower regime, conscious efforts should be made by the monetary authorities to gradually move from a regime of a high monetary policy rate to a lower one. Social implications: In particular, a 200-basis point reduction in the MPR over the simulation horizon produces a 1.3% fall in the inflation rate over the same period. Originality/value: This study enhances the authors' knowledge of how monetary policy can affect inflation in developing countries through the supply-side channel. [ABSTRACT FROM AUTHOR]

Purpose: Promoted for its inclusivity, agricultural value chain (AVC) financing leverages social capital and mechanisms such as off-take agreements and forward contracts to reduce borrowing and lending costs and risks for both farmers and lending institutions. AVC financing has been defined as the flow of financial products and services to and among the various actors within the AVC to address constraints of production and distribution and fulfill the needs of those involved in the chain by reducing risk and improving efficiency. This paper investigates how farmers' involvement in AVC affects their access to credit. Design/methodology/approach: The authors collected primary data from 400 crop farmers in northern Ghana through a semi-structured questionnaire and analyzed the data, using the multinomial endogenous switching regression model. Findings: Joint participation in AVC increased the amount of formal and informal credit received by 64 and 78%, respectively, compared to nonparticipation. Similarly, participation in AVC horizontal linkage and AVC vertical linkage increased the amount of formal and informal credit received by 40 and 47% and 46 and 74%, respectively, compared to nonparticipation. Irrigation farming, extension visits, knowledge of AVC in the community, access to a storage facility and trust in contract farming significantly influenced farmers' participation in AVC. Originality/value: The authors' work offers valuable insights into how different dimensions of value chain participation can impact smallholder farmers' access to credit. This work also underscores the importance of considering both formal and informal credit sources when analyzing the outcomes of value chain participation. The findings could enable formal financial providers to identify, liaise and/or resource informal financial players such as value chain actors to supply both formal and informal credit to farmers in AVCs. [ABSTRACT FROM AUTHOR]

This paper presents a very interesting issue on the agrarian question in Ghana and the rest of Africa: constraints to accessing agricultural credit by small-scale oil palm processors. Such constraints may have implications for investment behaviour into small-scale agro processing activities. Two hundred and sixty four (264) small-scale oil palm processors selected randomly from 10 communities in the Kwaebibirem Municipality in the Eastern Region, Ghana, were interviewed using structured questionnaires. The quantitative data were further triangulated with results of in-depth interview sessions with the managers of two rural banks in the community. It emerged from the study that most of the respondents accessed loans through informal sources with personal savings being the most popular source. The results also showed that significant determinants of factors affecting access to credit by the processors were gender, marital status, guarantor and high interest rate. Accessibility to agricultural credit was constrained by such factors as collateral security, information on credit and literacy rate of clients. The arguments of this paper are very important for policies seeking to solve the issue of improved access to credit by small-scale agro processors in Ghana. The paper therefore makes a strong case for sustained education and awareness creation on credit access. It also calls for actors to unify their efforts through cooperative associations to derive maximum benefits of collective investment of group savings, and increase their chances of accessing formal agricultural credit facilities. [ABSTRACT FROM AUTHOR]

Access to credit is a key prerequisite for the development of smallholder agriculture. However, rural credit markets are typically characterized by market failures and smallholder credit access is limited. Resource‐providing contracts are an institutional tool to overcome credit market failures through the provision of production inputs in the form of in‐kind credit. Previous research has shown that interlinkage of contract and credit helps farmers overcome financial constraints, foster production investments, and hence increase productivities and income. However, if and how such contract schemes affect farmers' overall demand for and access to formal credit from other sources is not yet well understood. In this article, we therefore investigate the associations of the provision of in‐kind credit and farming households' formal credit demand and ability to receive formal credit. We use data of 463 oil palm producers in Ghana and show that participation in contract farming is associated with an increase in credit demand. Concerning credit approval, we find that the outstanding debt of the in‐kind credit scheme is associated with a substantially lower likelihood of credit acceptance. However, the results also suggest that farmers can fully compensate this negative effect by informing the bank about the contract, and thus the source of the debt. This indicates that debt acquired from resource‐providing contract schemes does not necessarily pose an additional credit constraint to farmers. [EconLit Citation G21, G23, O16, O17]. [ABSTRACT FROM AUTHOR]

In this article, we investigate whether lending institutions perceive smallholder (individual) farmers as riskier borrowers than farm cooperatives. Our research results show that individual farmers in Ghana are less likely to be successful in obtaining credit than cooperative farmers, because they are perceived to be riskier borrowers. In addition, results show that the willingness of lending institutions to provide loans is higher for those farmers who are associated with cooperative societies. This suggests that individual farmers can increase their odds of securing loans by joining a cooperative society. Empirical results also support the hypothesis that the interest rate is a significant predictor of the willingness to loan bias among lending institutions. In addition, our results indicate that higher interest rates are associated with increased loan risk. However, when interest rate is higher, longer loan maturity can dampen the effect of interest rate. In other words, an increase in loan maturity length reduces the effect of interest rate on the loan risk. These research results have important policy implications for the welfare of smallholder farmers in developing economies as lack of financing has a significant impact on smallholder farmer productivity. [ABSTRACT FROM AUTHOR]

Purpose: Agriculture in Ghana is dominated by smallholder farmers in rural areas. Majority of these farmers are resource-poor and faced with serious challenges in accessing formal financial services towards farming needs attributed to the stringent requirements. To bridge this gap, village savings and loan associations (VSLA) have been promoted in rural areas as an alternative to meeting the credit needs of smallholder farmers. Credit plays a vital role in input acquisition among farmers for improved agricultural value productivity. This study assesses the contribution of VSLA to agricultural value productivity in the Northern Region of Ghana. Design/methodology/approach: The methodology is a primary cross-sectional data collected with the help of a semi-structured questionnaire. This study, therefore, applied a propensity score matching (PSM) to assess the effects of VSLA on agricultural value productivity. Findings: Results from the PSM revealed that extension contact, contract farming, television set ownership, participating in "Planting for Food and Jobs" and nature of roads, including receiving VSLA information from members' increases participation decision of farmers in VSLA. Conversely, age of a farmer, household size, distance to output market and farmers in the Sagnarigu Municipality have negatively influenced VSLA participation. The propensity score matching estimates showed that members of VSLA obtained 38.2% higher agricultural value productivity than non-members. Originality/value: Village savings and loans associations can be promoted among smallholder farmers as an effective alternative to formal financial service for inclusive development. [ABSTRACT FROM AUTHOR]

Purpose: Does financial inclusion matter for productivity among smallholder farmers? The authors answer this question by using the sixth and seventh rounds of the Ghana Living Standard Survey to examine the extent to which financial inclusion affects productivity among smallholder farmers in Ghana. Design/methodology/approach: The study uses a pooled data of the 6th and 7th rounds of the Ghana Living Standard Survey which are national representative data. The authors model an Instrumental Variable (IV) to correct for endogeneity in financial inclusion and a dominance analysis to examine the effects of access to credit, ownership of savings account and insurance product on farmers' productivity. Findings: Results from the study indicate that financial inclusion significantly enhances productivity. Moreover, credit, savings and insurance products influence productivity at various degrees. Thus, expanding the scope of financial services (access to credit, savings and insurance) among smallholder farmers is crucial for inclusive finance and sustainable agricultural production. Practical implications: The findings of the study have implications for financial institutions in the design of financial products that the meet the needs of smallholder farmers. Originality/value: Several studies have looked at how access to credit influences agricultural productivity in Africa. However, in recent times financial inclusion has been advocated for because it goes beyond mere access to credit. This paper to the best of our knowledge is the first of its kind to examine how financial inclusion could affect agricultural productivity in Ghana. [ABSTRACT FROM AUTHOR]

Purpose: Cocoa is regarded as a brown-golden crop, but its value chain activities are dominated by the elderly. Hence, focussing attention on the young generation of farmers is the surest way to reverse this trend and secure the future of the cocoa industry. This paper, therefore explores factors influencing youth participation in cocoa value chain activities in Ghana. Design/methodology/approach: Primary data were collected using a multistage sampling technique. The authors used a semi-structured questionnaire in collecting data via interviews. Through the theory of utility maximization, a multivariate probit (MVP) model was estimated to identify factors influencing youth participation in cocoa value chain activities in Ghana. Findings: The author found that some of the value chain activities are complementary, while others are substitutes. Participation in cocoa value chain activities is influenced by access to land, participation in training programmes in cocoa production, membership of Next Generation Cocoa Youth Programme (MASO), access to agricultural credit and other demographic characteristics. Research limitations/implications: Relevant information and youth-targeted projects enhance their participation in value chain activities. Originality/value: This paper is one of the few studies that empirically analyses drivers of youth participation in cocoa value chain activities in Africa. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this study is to examine the impact of access to credit on technical efficiency (TE) of maize farmers in a developing country, Ghana. Design/methodology/approach: The study employed an instrumental variable approach and the stochastic frontier analysis (SFA) method for the estimation of the results. Findings: The study found that farmers who have access to agricultural credit stand the chance of increasing TE by a margin of 8%, which also influences the maize production than those who did not have access to credit. The average TE score of the farmers was 74%. The study also found out that factors like membership, gender, farmers' access to credit, age and social network determine farmers' possibility of accessing agricultural credit. The study finds out that returns to size are increasing among the maize farmers and that significant improvement in efficiency can be realized by increasing the level of input used in production. Also, factors such as farm size, labor, seeds and fertilizer are the essential determinants of maize production output. Also, gender, extension, age, off-farm income, access to credit and membership were significant factors influencing technical inefficiency (TI). Originality/value: The paper contributes to the existing literature on agricultural credit on rural agricultural development. The problem of endogeneity associated with access to credit, which has been considered by other researchers, is dealt with this study. This paper also provides information to government policymakers, practitioners and all other stakeholders in the maize sub-sectors and also will benefit small farmers outside the study area. [ABSTRACT FROM AUTHOR]

In this study, the Land Use Dynamic Simulator model was applied to investigate the impact of farm credit as an adaptation strategy to cope with effects of climate variability on agricultural land‐use change and crop production in the Vea watershed in Ghana. The authors identified the determinants of crop choices within the landscape (e.g., farm household and biophysical characteristics of farm plot). The crop choice sub‐model was then linked to the crop yield sub‐model to determine the yields of selected crops. In adapting to the impacts of climate variability, the maize credit adoption sub‐model under the maize cultivation credit scenario was integrated into decision‐making. This was simulated for a 20‐year period, and compared with the business‐as‐usual scenario. Under the simulated maize credit scenario, maize adopters increased from about 20 per cent to about 50 per cent and the area allocated for maize cultivation significantly increased by about 266 per cent. Consequently, the average annual aggregated household crop yield increased by 6.3 per cent higher than in the business‐as‐usual scenario. This simulation study shows that access to maize credit can significantly influence agricultural land‐use change and food availability in the study area. However, although access to farm credit may translate into food availability, the sustainability of this strategy is questionable. [ABSTRACT FROM AUTHOR]

The study reviewed the historical emergence of microfinance in general and Ghana in particular. It was found that microfinance started as pawnshops with affordable interest rates to Irish loan fund, then to co-operatives, agricultural credits, small loans to poor women and farmers then formally microcredit and finally microfinance (Microcredit plus savings, insurance, money transfers, and non-financial services). In Ghana, microfinance was started by the government offering subsidised credit to farmers, then through NGOs, then establishment of Agricultural Development Bank to supply small loans to the agricultural sector, then establishment of Rural and Commercial Bank, to formalisation and commercialisation of MFI. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to investigate how farmers' access to credit affects agricultural commercialization in the northern Savannah ecological zone of Ghana. The study uses data from the Ghana Feed the Future baseline survey involving a total sample of 2,962 farm households. The study employs endogenous switching regression for ordered outcomes to account for endogeneity and self‐selection bias in the decision to access credit. The results from the estimations revealed that education, age, nonfarm business equipment, multiple crop production, and group membership are the variables influencing farmers' access to credit. Agricultural commercialization is determined by gender, age, marital status, household size, farm size, nonfarm business equipment, means of transport, group membership, assets index, multiple crop production, and location. In terms of causal effect, the results show that credit access stimulates higher commercialization. Thus policies that enhance farmers' access to credit are more likely to be successful in getting them to commercialize. [ABSTRACT FROM AUTHOR]

Purpose: The 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/approach: This 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. Findings: First, 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/value: The 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. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to examine the impact of informal credit access on agricultural productivity in rural Ghana. Design/methodology/approach: Data sets from the Ghana Feed the Future baseline survey involving a total sample of 2,437 rural farm households were used. In order to address the problem of endogeneity and sample selectivity bias, the endogenous switching regression (ESR) model was employed to examine whether rural farm households' with access to informal credit and those without access differ in terms of their productivity levels and whether access to informal credit affects agricultural productivity. Findings: Estimates from the ESR show that access to informal credit significantly promotes agricultural productivity. Specifically, farmers with access to informal credit were able to achieve a yield of 48.42 kg/ha more than their counterparts without informal credit access. In terms of the counterfactual, farmers without informal credit access would have increased their yield by 57.61 kg/ha if they were to have access to informal credit. Research limitations/implications: The study was restricted to the savannah ecological zone of Ghana. This limits the extent of generalisation of results. Originality/value: This study provides a rigorous econometric analysis of the impacts of access to informal credit on agricultural productivity in rural Ghana. The study contributes to the current debate on the link between access to informal credit and agricultural productivity and provides valuable input for policymakers. [ABSTRACT FROM AUTHOR]

Index insurance has been heralded as a potential solution to risk management problems faced by smallholder farmers in developing countries. Despite its potential, demand for standalone index insurance contracts has remained low in early field trials. We investigate the willingness to pay for drought index insurance‐backed loans in northern Ghana using contingent valuation. We find that index insurance lowers overall demand for agricultural loans. We also compare micro‐level index insurance, provided directly to farmers, with meso‐level insurance, provided to the credit agency and find that farmers appear to prefer micro‐level insurance. Finally, farmers are willing to pay to avoid basis risk. [ABSTRACT FROM AUTHOR]

Purpose: Production credit is essential for enhancing the technical efficiency (TE) and the welfare of smallholder farmers in Africa. The purpose of this paper is to examine the impact of credit on smallholders' TE using cross-sectional data from 223 maize-producing households in Northern Ghana. Design/methodology/approach: Due to the exogenous assignment of credit and assumption of homogeneity in farm technologies, the propensity score matching (PSM) analysis was used to compare the average difference in TE between farmers that had received credit and those that had not. Findings: The results revealed that production credit impacts positively on smallholder farmers' TE. Access to production credit is significantly influenced by access to markets and extension services, distance to market, asset index and land fragmentation. The provision of credit enhances the timely purchase and efficient allocation of farming inputs to produce the maximum possible output. Per capita income and land fragmentation also play important roles in reducing smallholders' TE. Practical implications: To increase efficiency gains, credit programs for agricultural interventions should target resource-poor smallholder farmers. The efficiency gains can be sustained through stronger partnerships with financial institutions. Policy interventions aimed at increasing smallholder farmers' access to production credit (e.g. through the creation of a conducive investment environment that lowers the lending rate and collateral requirements) must be vigorously pursued. Originality/value: To the best of authors' knowledge, this is one of the only recent studies to examine the impact of credit on the TE of farming households by applying the translog stochastic frontier production function and the PSM approaches. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this paper is to examine if credit rationing persists even in the era of financial liberalization, the extent to which individual, firm and loan characteristics influence the rationing behavior of commercial banks and whether the agricultural sector is discriminated against in the commercial bank credit market.Design/methodology/approach The study employed a probit model with marginal effects and a generalized Blinder-Oaxaca decomposition estimation on a randomly selected data of 1,239 entrepreneurs from eight commercial banks’ credit records about their individual, firm and loan characteristics.Findings The study revealed that credit rationing persists and that applying for a relatively longer payment period, providing collateral and guarantor, being illiterate, being relatively older and being in the agricultural sector increases the likelihood of being credit rationed, while having some relationship with the bank, having non-mandatory savings and applying from a bank with relatively high interest rates reduce the likelihood of being credit rationed. The study also revealed a credit gap of 17.77 percent and a positive discrimination against borrowers in the agricultural sector as the gap was largely being influenced by unexplained factors.Research limitations/implications The research was intended to cover a large number of commercial banks in Ghana. However, most of the banks were unwilling to provide such information about their borrowers; hence, the research was limited to only eight commercial banks who provided the author with the information needed for the study.Practical implications The study concludes that policies that enhance human capital, women, and older access to credit and agricultural-oriented financial services and others, will go a long way to reduce rationing and increase access to credit, especially to the agricultural sector.Social implications The research proposes the use of group lending as a form of collateral and monitoring to ease risks and default, and hence supports sustainable funding to increase access and outreach.Originality/value The paper looks at the comprehensive way about the various factors determining credit rationing in that it considers not only the individual, economic/firm and loan characteristics but also the extent to which discrimination toward the agricultural sector exists in the commercial banks credit market. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this paper is to examine farmers’ access to credit, credit constraint, and productivity in the Northern Savannah ecological zone of Ghana.Design/methodology/approach Secondary data from the Ghana Feed the Future baseline survey involving a total sample of 2,968 farm households were used. The conditional mixed process (CMP) framework was applied to estimate access to credit, credit constraint, and productivity simultaneously. As a system estimator the CMP corrects for possible heterogeneity and sample selection bias.Findings The results from the estimations revealed that age, literacy, farm non-mechanized equipment, and group membership were the variables influencing farmers’ access to credit. Credit constraint conditions were determined by household size, locality, group membership, and household durable assets. Finally, the results showed that productivity of farmers was dependent on marital status, household size, locality, farm size, commercialization, farm mechanized equipment, group membership, and household durable assets.Originality/value This paper is the first, to the best of the authors’ knowledge, to use the CMP framework to jointly estimate access to credit, credit constraint, and productivity. The results indicate that estimating credit access and constraint models separately would have yielded biased estimates. Thus, this paper informs future research on farmers’ credit access, credit constraint, and productivity for informed policymaking. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this paper is to analyze determinants of farmers’ participation and credit rationing in microcredit programs using survey data from Ghana.Design/methodology/approach The authors use the Garrett Ranking Technique to analyze farmers’ reasons for participation or non-participation in credit programs, a probit regression model to estimate factors influencing farm households’ participation, and the Heckman’s sample selection model to identify factors influencing farm households’ probability of being credit rationed by microcredit programs.Findings The results reveal that farm households participate in credit programs because of improved access to savings services and agricultural loans. Fear of loan default and lack of savings are reasons for non-participation in credit programs. Furthermore, membership in farmer-based organizations (FBOs) and the household head’s formal education are positively associated with farmers’ participation in credit programs. The likelihood of farmers being credit rationed (i.e. their loan applications were either rejected or the amount of credit they applied for was reduced) is less likely among higher income farmers and members of FBOs such as farmer cooperatives and savings clubs.Practical implications The findings suggest that policy strategies aiming to improve access to savings and credit services should educate farmers and strengthen FBOs that could serve as entry points for financial service providers. Such market smart strategies have the potential to improve farmers’ access to financial services and reduce rural poverty.Originality/value Although existing studies have examined farmers’ participation in credit markets and credit rationing separately, the unique contribution of this paper is the analysis of participation in microcredit programs as well as the likelihood of farmers being credit rationed in Ghana. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to examine the impact of agricultural credit on technical efficiency of Ghanaian maize farmers using a unique dataset drawn from the database of Sub-Saharan Africa’s intensification of food crops agriculture (Afrint II) in 2008 period. Design/methodology/approach – In this study, a two-stage estimation procedure is employed to determine impact of agricultural credit on technical efficiency of Ghanaian maize farmers. The first stage utilized probit model while the second stage utilized stochastic frontier approach to estimate impact of credit on technical efficiency of Ghanaian maize farmers. Findings – The study found that farmers are producing below the frontier with average technical efficiency of 47 percent. Policy variables such as credit access; education, extension access and farm size played a stronger role in technical efficiency. Agricultural credit in particular increased technical efficiency by 3.8 percent. Research limitations/implications – The results should not be extended to the impact of agricultural credit on economic efficiency since the allocative efficiency component is not considered in this study. Also, caution should be taken in the interpretation of these results because the data could not permit the incorporation of all variables that might affect technical efficiency. Originality/value – The originality of the paper and its contribution to existing literature largely lies from the use of a unique dataset to find evidence of the impact of credit on efficiency in Ghana. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to investigate the determinants of agricultural credit rationing by formal lenders in Ghana. Design/methodology/approach – This study employed descriptive statistics, analysis of variance (ANOVA) and Heckman's two-stage regression model to identify types of rationing faced by farmers and investigate factors that influence agricultural credit rationing by formal financial institutions. Data used in this study are gathered through a survey of 595 farmers in seven districts within Brong Ahafo Region of Ghana. Findings – The result reveals that farmers face three types of rationing. Evidence from the Heckman two-stage models shows that engagement in off farm income generating activities, increase in farm size, positive balances on accounts and commercial orientation of the farmers has the potential to reduce rationing of credit applicants by formal lenders. Practical implications – The results provide information on the factors that need to be considered as important in an attempt to reduce agricultural credit rationing by formal lenders. Originality/value – The value of this study is that farmers would use the results of this study to improve access to required amount of agricultural credit from formal financial institutions. The information would also benefit stakeholders in the agricultural sector, particularly youth in agriculture program organized by Ministry of Food and Agriculture in Ghana as how to improve access to credit and reduce rationing of program participants by formal financial institutions. [ABSTRACT FROM AUTHOR]

The study examined constraints influencing farmers' access to credit and the effect that credit has on maize productivity, using the endogenous switching regression approach with survey data collected from 595 maize farmers in the Ashanti and BrongAhafo Regions of Ghana. The study revealed that credit constraint has a dampening effect on input use and farm productivity. The results showed that engagement in off-farm income-generating activities, farm size and farmers' perception on operational modalities are factors that influence credit constraint conditions for farmers. In addition, the marginal productivity of credit differs between credit-constrained and credit-unconstrained farmers: thus, access to credit would enable credit-constrained farmers to take advantage of the available productive opportunities and increase maize productivity. Therefore, farmers in need of additional credit should be served to increase farm productivity. [ABSTRACT FROM AUTHOR]

Farmers face a particular set of risks that complicate the decision to borrow. We use a randomized experiment to investigate (1) the role of crop-price risk in reducing demand for credit among farmers and (2) how risk mitigation changes farmers' investment decisions. In Ghana, we offer farmers loans with an indemnity component that forgives 50 percent of the loan if crop prices drop below a threshold price. A control group is offered a standard loan product at the same interest rate. Loan uptake is high among all farmers and the indemnity component has little impact on uptake or other outcomes of interest. [ABSTRACT FROM AUTHOR]

• Sustainable agricultural practices (SAP) can limit degradation of essential ecosystems. • However, its adoption is low in Sub-Saharan Africa, particularly Ghana. • A significant proportion of farmers show a high level of knowledge on SAP. • Socioeconomic, farm-specific and institutional factors drive SAP adoption. • Participation in field demonstration and saving groups should be encouraged. Serious attention should be given to the low adoption rates of what appears to be relatively simple sustainable agricultural practices (SAPs) that have the potential to protect the environment, enrich soil nutrients, restrict the depletion of essential ecosystem resources and increase farm productivity. Using primary data from 320 sampled agricultural households in two districts of Northern Ghana, multivariate probit (MVP) and zero-truncated Poisson models were applied to identify the determinants of SAP adoption and adoption intensity, respectively. From the MVP analysis, the study found that some SAP components are complementary, while others are substitutes. Furthermore, the results of the MVP regression indicate that non-farm income, livestock ownership, pest and disease prevalence, farmers' experience of erosion, farmers' perception of poor soil fertility, participation in field demonstration, membership of saving groups, access to agricultural credit, plot ownership, and distance to the agricultural input market are important determinants of adoption of SAP. With zero-truncated Poisson, the study found that factors such as farm size, participation in field demonstration, ownership of livestock and access to agricultural credit significantly influenced the intensity of SAP adoption. The study therefore recommended that policies should target institutional and plot-specific characteristics to improve and intensify the adoption of SAPs as they condition the need for adoption and the extent of adoption. [ABSTRACT FROM AUTHOR]

• Best management practices close yield gaps in mature oil palm in Ghana. • Short-term yield increases are achieved through improved crop recovery. • Improving crop recovery provides the finance needed for inputs to increase yields. • Improved fertilizer recommendations are essential to increase yields in Ghana. • Best management practices reduce the need for area expansion for oil palm. The area under oil palm in Ghana has expanded but average fruit bunch yields remained low, resulting in large yield gaps. This study assessed the potential for increasing yield with 'Best Management Practices (BMP)' on plantations and smallholder farms in southern Ghana, compared with current standard practices, i.e. reference (REF) yield. We evaluated short-term (≤1 year) yield increases with 'yield taking' (improved crop recovery), and long-term increases (>1 year) with 'yield making' (better agronomy) practices and identified the factors that contributed most to yield improvements. Average fruit bunch yield increases with BMP were 2.1 t ha−1 (+19%) and 4.7 t ha−1 (+89%) with yield taking and 4.7 t ha−1 (+36%) and 7.6 t ha−1 (+76%) with yield making at plantations and smallholder farms respectively. Short-term yield improvements were achieved with more frequent harvesting events and improved field access, which can help finance inputs needed for the yield making phase. Our analysis suggests more balanced palm nutrition could contribute considerably to yield making, particularly on smallholder farms. Improved fertilizer recommendations are therefore essential for sustainable oil palm production in Ghana. Increasing yields to 21.0 t ha−1 on land already planted to oil palm, can increase national fruit bunch production from 2.5 Mt to 6.9 Mt, sparing 600,000 ha of land. However, labour constraints on plantations and lack of access to credit and agricultural inputs on smallholder farms are major hurdles that need to be overcome to increase production. [ABSTRACT FROM AUTHOR]