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Capacity Utilization of the Rice Milling Industry and Interlinkage in the Rice Market in Ghana

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  • Furuya, Jun
  • Sakurai, Takeshi

Abstract

Most large-scale millers in the Kumasi area, central Ghana, provide interest-free or low interest loans to farmers under the agreement that the farmers will bring their paddy to the millers. This paper examines the effect of this interlinkage on the efficiency of rice milling. A quadratic short-run cost function was estimated by controlling for self-selection bias using the results of first-stage Probit regression, and capacity utilization was calculated in relation to money lending. The results show that if a miller provides a loan to farmers, the operating rate will increase by 24% and the total cost will decrease by 17%.

Suggested Citation

  • Furuya, Jun & Sakurai, Takeshi, 2005. "Capacity Utilization of the Rice Milling Industry and Interlinkage in the Rice Market in Ghana," Japanese Journal of Agricultural Economics (formerly Japanese Journal of Rural Economics), Agricultural Economics Society of Japan (AESJ), vol. 7, pages 1-12.
    • Handle: RePEc:ags:jpjjre:242151
    DOI: 10.22004/ag.econ.242151
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    References listed on IDEAS

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    1. Crow, Ben & Murshid, K. A. S., 1994. "Economic returns to social power: Merchants' finance and interlinkage in the grain markets of Bangladesh," World Development, Elsevier, vol. 22(7), pages 1011-1030, July.
    2. Dalton, Timothy J. & Guei, Robert G., 2003. "Productivity Gains from Rice Genetic Enhancements in West Africa: Countries and Ecologies," World Development, Elsevier, vol. 31(2), pages 359-374, February.
    3. Carter, Michael R., 1989. "The impact of credit on peasant productivity and differentiation in Nicaragua," Journal of Development Economics, Elsevier, vol. 31(1), pages 13-36, July.
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    Cited by:

    1. Kijima, Yoko & Otsuka, Keijiro & Futakuchi, Koichi, 2013. "The development of agricultural markets in sub-Saharan Africa: the case of rice in Uganda," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 8(4), pages 1-12, October.
    2. Kapalata, Deogratius & Sakurai, Takeshi, 2020. "Adoption of Quality-Improving Rice Milling Technologies and Its Impacts on Millers' Performance in Morogoro Region, Tanzania," Japanese Journal of Agricultural Economics (formerly Japanese Journal of Rural Economics), Agricultural Economics Society of Japan (AESJ), vol. 22.
    3. Latif Apaassongo Ibrahim & Sakurai, Takeshi & Tachibana, Towa, 2020. "Local Rice Market Development in Ghana: Experimental Sales of Standardized Premium Quality Rice to Retailers," Japanese Journal of Agricultural Economics (formerly Japanese Journal of Rural Economics), Agricultural Economics Society of Japan (AESJ), vol. 22.

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