Effect of input credit on smallholder farmers’ output and income

Purpose - The purpose of this paper is to examine the effect of input credit on smallholder farmers’ output and income using Masara N’Arziki support project in Northern Ghana. Design/methodology/approach - A cross-sectional primary data set was used to estimate the effect of project participation on farm output, yield and income using propensity score matching (PSM) methods. Findings - The findings are that project participation is skewed towards experienced farmers with big-sized households and farms. The effect of project on outcomes is somewhat unsatisfactory in the sense that participation only raises output and yield, but not income. Research limitations/implications - The paper only examined the project effect on farm outcomes among smallholder farmers participating in the programme in just one operational area in the Northern region. Future research should consider all the operational areas for an informed generalisation of findings. Practical implications - Greater benefits to farmers from programme participation would require project management to review the contractual arrangement so that the high cost of input credit is significantly reduced. Originality/value - The paper applied the PSM to estimate the effect of project participation on farm output, yield and income among smallholder farmers which is non-existent in the literature on the study area, at least as far as we know. This paper can inform future policy on the direction and nature of support for smallholder farmers in Northern Ghana.