Smallholder Maize Farmers’ Food Consumption Expenditures in Ghana: The Mediating Role of Commercialization

DOI 10.7160/aol.2016.080302
No 3/2016, September
pp. 13-27

Asante, S. B., Osei-Asare, Y. B. and Kuwornu, J. K. M. (2016) “Smallholder maize farmers’ food consumption expenditures in Ghana: The mediating role of commercialization", AGRIS on-line Papers in Economics and Informatics, Vol. 8, No. 3, pp. 13 - 27. ISSN 1804-1930. DOI 10.7160/aol.2016.080302.

Abstract

This paper examines the effect of smallholder maize farmers’ commercialization on their household food consumption expenditures in Ghana using data from the Ghana Living Standard Survey Round Five (GLSS5). The results indicate that the intensity of smallholder maize commercialization is generally low and that better output price, quantity of maize produced, farm size, type of market or point of sale, access to mobile phone network coverage, proportion of crops given to landlord, instant payment for maize sold, are inter alia key incentive variables that influence the intensity of maize commercialization. The study also revealed that intensity of maize commercialization positively influenced food consumption expenditures. Increases in the sale of maize results in increases in purchases of food items needed to address household food security needs. These findings demonstrate the urgent need to strengthen smallholder market integration initiatives, encourage market information delivery systems, and establish more retail outlets with improved market facilities in order to promote production and trade in high value cereals such as maize in Ghana.

Keywords

Commercialization, smallholder maize farmers, consumption, food expenditures, households.

References

  1. Abera, G. (2009) "Commercialization of Smallholder Farming: Determinants and Welfare Outcomes." A cross-sectional study in Enderata District, Tigari, Ethiopia, (Unpublished master thesis), University of Agder, Kristiansand, Norway.
  2. Aker, J. C. (2010) "Information from Markets Near and Far: Mobile Phones and Agricultural Markets in Niger", Applied Economics, Vol. 2, No. 3, pp. 46–59. ISSN 1945-7782. DOI 10.1257/app.2.3.46.
  3. Alene, A. D., Manyong, V. M., Omanya, G., Mignouna, H.D., Bokanga, M. and Odhiambo, G. (2008) Smallholder market participation under transaction costs: Maize supply and fertilizer demand in Kenya, Food Policy, Vol. 33, pp. 318-328. ISSN 0306-9192. DOI 10.1016/j.foodpol.2007.12.001.
  4. Asingwire, N. and Okello, J. J. (2011) "Challenges facing smallholder farmers’ ICT-based market information service projects: The case of BROSDI and WOUGNET in Uganda", International Journal of Economic Research, Vol. 2, pp. 142-152. ISSN 2229-6158.
  5. Baber, A. and Shahnawaz, M. (2010) "Household Consumption Patterns in Pakistan: A Rural Urban Analysis", Forman Journal of Economic Studies, Vol 6, pp. 1-25. ISSN 1990-391X.
  6. Banerjee, A. V. and Duflo, E. (2007) "The Economic Lives of the Poor", Journal of Economic Perspectives, Vol. 21, No. 1, pp. 141–167. ISSN 0895-3309. DOI 10.1257/089533007780095556.
  7. Barrett, C. (2008) "Smallholder Market Participation: Concepts and Evidence from Eastern and Southern Africa", Food Policy, Vol. 33, pp. 299-317. ISSN 0306-9192. Source: RePEc. DOI 10.1016/j.foodpol.2007.10.005.
  8. Blundell, R. and Robin, J. M. (1999) "Estimation in Large and Disaggregated Demand systems: An estimator for conditionally linear systems", Journal of Applied Econometrics, Vol. 14, pp. 209-232. ISSN 0883-7252. DOI 10.1002/(SICI)1099-1255(199905/06)14:3<209::AID-JAE532>3.0.CO;2-X.
  9. Cunningham, L.T., Brown, B. W., Anderson, K. B. and Tostao, E. (2008) "Gender Differences in Marketing Styles", Journal of Agricultural Economics, Vol. 38, No. 1, pp. 1-7. ISSN 1574-0862. DOI 10.1080/13548500802241928.
  10. Eskola E. (2005) "Commercialization and Poverty in Tanzania: Household-Level Analysis", (Unpublished discussion papers), Department of Economics, University of Copenhagen [Online] Available: http://www.econ.ku.dk/english/research/publications /wp/ 2005/0527.pdf/ [Accessed: September 29, 2012].
  11. Ghana Statistical Service (GSS) (2008) "Ghana Living Standards Survey", Reports of the Fifth Round, Accra, 1-5.
  12. Greene, W. H. (2003) "Econometric Analysis" (fifth edition), Prentice Hall, Upper Saddle River, New Jersey. ISBN 0-13-066189-9.
  13. Han, T. and Wahl, T. I. (1998) "China’s Rural Household Demand for Fruit and Vegetables". Journal of Agricultural and Applied Economics, Vol. 30, No. 1, pp. 141-150. ISSN 2056-7405. DOI 10.1017/S1074070800008129.
  14. Hopper, W. C. (2011) "Income and Food Consumption", The Canadian Journal of Economics and Political Science/ Revue canadienne de economiques et science politique, Vol. 9, pp. 487-506. No longer published. E-ISSN 1920-7220, ISSN 0315-4890. DOI 10.2307/137436.
  15. IFAD–IFPRI Partnership Newsletter (2011) "Agricultural Commercialization in Northern Ghana". [Online] Available: http//ifadifpri.word pressed.com. [Accessed: September 24, 2012].
  16. Jolly, C. M., Awuah, R. T., Fialor, S. C., Agyemang, K. O., Kagochi, J. M. and Binns, A. D. (2008) "Groundnut consumption frequency in Ghana", International Journal of Consumer Studies, Vol. 32, pp. 675–86. ISSN 1470-6423. DOI 10.1111/j.1470-6431.2008.00697.x.
  17. Key, N., Sadoulet, E. and de Janvry, A. (2000) "Transaction Costs and Agricultural Household Supply Response", American Journal of Agricultural Economics, Vol. 82, No. 2, pp. 245–259. E-ISSN 1467-8276, ISSN 0002-9092. DOI 10.1111/0002-9092.00022.
  18. Kirsten, J., Mapila, M., Okello, J. and Sourovi, D. (2012) "Managing Agricultural Commercialization for Inclusive growth in Sub-Saharan Africa". GDN Agriculture Policy Series, Vol. 1, pp. 1-58.
  19. Leavy, J. and Poulton, C. (2007) "Commercialization in Agriculture", Ethiopian Journal of Economics, Vol. 16, No. 1, pp. 3 – 42. ISSN 1993-3681. DOI 10.4314/eje.v16i1.39822.
  20. Mahelet, G. F. (2007) "Factors Affecting Commercialization of Smallholder Farmers in Ethiopia: The case of North Omo Zone, SNNP region", Paper presented at the Fifth International Conference on the Ethiopian Economy, Addis Ababa, June 7-9, 2007. [Online] Available: from www.eeaecon. org/6th%20Int'l%20 Papers%20.htm [Accessed. October 20, 2012].
  21. Martey, E., Al-Hassan, R. M, and Kuwornu, J. K. M. (2012) "Commercialization of Smallholder Agriculture in Ghana: A Tobit regression Analysis", African Journal of Agricultural Research, Vol. 7, No. 14, pp. 2131-2141. ISSN 1991-637X.
  22. Meng, T., Florkowski, W. J., Kolavalli, S. and Ibrahim, M. (2012) "Food expenditures in rural households in Northern Region of Ghana". Selected paper prepared for presentation at the Southern Agricultural Economic Association. Annual meeting, Birmingham, AL, Feb. 4-7, 2012.
  23. Mhango, Y. (2010) "Ghana: Annual economic outlook; The Eve of Oil Production". Standard Bank Report. [Online] Available: http://ws9.standardbank.co.za/sbrp/Latest Research.do [Accessed: October 26, 2012] .
  24. Minot, N., Epprecht, M., Anh, T. T. T. and Trung, Q. L. (2006) "Income diversification and Poverty in the Northern uplands of Vietnam". IFPRI Research report, 145, pp. 1-111.
  25. Muhammad, A., Seale, J. L. Jr., Meade, B. and Regmi, A. (2011) "International Evidence on Food Consumption Patterns", Technical Bulletin, TB-1929, 59.
  26. Okoboi, G. (2008) "A Case Study of a Best-Bet Market Chain Approach: How Smallholder Potato Producers in Kabale Market Potatoes to Nandos in Kampala". Final Report, ASARECA.
  27. Olwande, J. and Mathenge, M. (2010) "Market Participation among the Poor Rural Households in Kenya", Tegemeo Institute of Agricultural Policy and Development.
  28. Omiti, J. M., Otieno, D. J., Nyanamba, T. O. and Mccullough, E. (2009) "Factors Influencing the Intensity of Market Participation by Smallholder Farmers: A Case Study of Rural and Peri-urban areas of Kenya", African Journal of Agricultural Resource Economics, Vol. 3, No. 1, pp. 57-82. ISSN 1993-3738.
  29. Pender, J. and Alemu, D. (2007) "Determinants of smallholder commercialization of food crops: Theory and evidence from Ethiopia". Discussion Paper No. 745, International Food Policy Research Institute (IFPRI), Washington, DC.
  30. Pingali, P. (1997) "From Subsistence to Commercial Production System: The Transformation of Asian Agriculture", American Journal of Agricultural Economics, Vol. 79, No. 2, pp. 628-634. ISSN 1467-8276. DOI 10.2307/1244162.
  31. Pingali, P., and Rosegrant, M. (1995) "Agricultural commercialization and diversification: Processes and policies", Food Policy, Vol. 20, No. 3, pp. 171–185. ISSN 0306-9192. DOI 10.1016/0306-9192(95)00012-4.
  32. Pradhan, K., Dewina, R. and Minsten, B. (2010) "Agricultural Commercialization and Diversification in Bhutan", International Food Policy Research Institute, Washington, DC, USA.
  33. Quaye, W., Gyasi, O., Larweh, P., Johnson, P-N. T. and Obeng-Aseidu, P. (2009). "The extent of marketability and consumer preferences for traditional leafy vegetables – A case study at selected markets in Ghana", International Journal of CoDOInsumer Studies, Vol. 33, pp. 244–249. ISSN 1470-6431. DOI 10.1111/j.1470-6431.2009.00768.x.
  34. Rogers, E. M. (1995) "Diffusion of Innovations". The Free University Press, New York. ISBN-13: 978-0029266717; ISBN-10: 0029266718.
  35. Romer, P. (1994) "New Goods, Old Theory and The Welfare Cost of Trade Restrictions", Journal of Development Economics, Vol. 43, No. 1, pp. 5-38. ISSN 0304-3878. DOI 10.3386/w4452.
  36. Sadoulet, E. and de Janvry, A. (1995). Quantitative Development Policy Analysis. The Johns Hopkins University Press, Baltmore, Maryland, USA. ISBN 0801847826 9780801847820.
  37. Safdar, S., Ahmad, N. and Sher, F. (2012) "Estimation of urban –rural expenditure and size ealasticities of food items in Pakistan: Evidence from PSLM data", Academic Research International, Vol. 3, No. 2, pp. 474- 481. ISSN 2223-9944.
  38. Sindi, J. K. (2008) "Kenya’s Domestic Horticulture Subsector: What Drives Commercialization Decisions by Rural Households?" Department of Agricultural, Food and Resource Economics: Michigan State University.
  39. Strasberg, P. J., Jayne, T. S., Yamano, T., Nyoro, J., Karanja, D. and Strauss, J. (1999) "Effects of agricultural commercialization on food crop input use and productivity in Kenya". Michigan State University International Development Working Papers No. 71. Michigan, USA. ISSN 0731-3438.
  40. Technoserve (1997) BOAFO: the Newsletter of Technoserve/Ghana, Vol. 8, November, Accra, Ghana.
  41. Timmer, C. P. (1997) "Farmers and Markets: The Political Economy of New Paradigms", American Journal of Agricultural Economics, Vol. 79, No. 2, pp. 621-627. ISSN 0002-9092. DOI 10.2307/1244161.
  42. Von Braun, J., Bouis, H., Kennedy, E. (1994) "Agricultural Commercialization, Economic Development, and Nutrition" In: von Braun, J., and E. Kennedy (eds.). Johns Hopkins University Press, Baltimore, MD, 3-8. ISBN 0-8018-4759-1.
  43. Wiggins, S., Argwings-Kodhek, G., Leavy, J. and Poulton, C. (2011) "Small Farm Commercialization in Africa: Reviewing the Issues", Future Agricultures Consortium, Research Paper.

Full paper

  Full paper (.pdf, 1.05 MB).