Author
Listed:
- David Boansi
- Michael Gyasi
- Stephen Nuamah
- Enoch Kwame Tham-Agyekum
- Fred Ankuyi
- Richmond Frimpong
- Albert Gbafah
- Charles Bosompem Gyan
Abstract
This study identified the determinants of cocoa farmers’ access to credit in Ghana and estimated the impact of credit access on yield, yield gap, gross income, cost of production, and net income using propensity score matching. A total of 384 cocoa-farming households were included in the analysis. Only 33.3% of cocoa farmers accessed credit for production and cooperative unions were the main source of credit accessed by the farmers. The study finds significant positive impacts of agricultural credit on yield, gross income, and net income, while yield gap decreases significantly (by 12.2–16.7%) with access to credit. Policy efforts to improve cocoa farmers’ access to credit could therefore enhance the productivity and profitability of cocoa production. It was found that male-headed households with access to credit derive greater benefits than their female counterparts. This may be attributed to differences in resource endowments and marginalization (between male and female heads). In addition, it was found that with access to credit, cultivating more than one cocoa farm could make cocoa production more productive and profitable. This indicates more efficient and profitable use of credit on fragmented farms, than on non-fragmented farms. However, under credit constraint, the practice of land fragmentation could be counterproductive.Through the generation of foreign exchange, creation of employment, and the provision of other environmental and health related benefits, cocoa can be classified as a gem among the major export commodities from Ghana. Despite the benefits the commodity offers to the Ghanaian economy, the cocoa subsector has been subjected to myriads of production related challenges (including aging trees, low soil fertility, low or limited adoption of productivity-enhancing inputs, challenges with post-harvest management, etc.), which have led to declining trend in cocoa production, rising production costs and decreasing farm income. Majority of these challenges have in recent research efforts been linked to credit constraints. While efforts have been made by previous and current governments to improve cocoa farmers access to credit and enhance the performance of the subsector, credit remains insufficient for cocoa farmers, and very little has so far been documented empirically on the impact of agricultural credit on cocoa production, especially in Ghana. This study addresses this gap by analyzing the determinants of cocoa farmers access to agricultural credit and the impact of agricultural credit on productivity (yield, yield gap, and gross income), cost and returns from cocoa production. The study also identifies and documents potential heterogeneity in impacts of agricultural credit on male and female headed households, and between farmers who operate on fragmented and non-fragmented lands, stressing on the need to consider the differences in impact between these two groups when implementing measures to enhance farmers access to credit and the impact on farm performance. Findings from this study could guide policy formulation, especially in targeting of farmers for agricultural credit and in the implementation of measures to address challenges in cocoa production. To farmers, this study could enlighten them on the benefits of operating on fragmented lands with improved access to credit, and the risk of operating on fragmented lands under credit constraint
Suggested Citation
David Boansi & Michael Gyasi & Stephen Nuamah & Enoch Kwame Tham-Agyekum & Fred Ankuyi & Richmond Frimpong & Albert Gbafah & Charles Bosompem Gyan, 2024.
"Impact of agricultural credit on productivity, cost and returns from cocoa production in Ghana,"
Cogent Economics & Finance, Taylor & Francis Journals, vol. 12(1), pages 2402035-240, December.
Handle:
RePEc:taf:oaefxx:v:12:y:2024:i:1:p:2402035
DOI: 10.1080/23322039.2024.2402035
Download full text from publisher
As the access to this document is restricted, you may want to search for a different version of it.
Corrections
All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:oaefxx:v:12:y:2024:i:1:p:2402035. See general information about how to correct material in RePEc.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
We have no bibliographic references for this item. You can help adding them by using this form .
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/OAEF20 .
Please note that corrections may take a couple of weeks to filter through
the various RePEc services.