This series is offered by the Office of Chief Economist in the Africa Region, and provides regular opportunities to interact, debate and discuss on topics that are relevant to our work in the Africa Region. The series invites leading researchers to present the results of their most recent research in a seminar format.
Information, market access and risk: addressing constraints to agricultural transformation in northern Ghana
A typical smallholder farmer in northern Ghana cultivates less than ten acres of land, grows rain-fed maize and groundnut or rice, may be food insecure during lean seasons, maintains very limited liquid savings and faces the risk of weather shocks. These smallholder farmers are using few inputs other than their own family labor: there is little use of fertilizer, high-yield seeds, or farming equipment. Farmers in northern Ghana are achieving just 30 percent of potential crop yields. We report preliminary results from a four-year project examining three major agricultural barriers inhibiting increased farm profitability amongst smallholder farmers: (1) excessive risk deriving from weather uncertainty, (2) unavailability and unaffordability of high yielding inputs, and (3) lack of improved agricultural knowledge. Using a cross-cutting randomized design, we test all three. To test the role of risk, farmers were able to purchase a commercial rainfall index insurance project. To test the role of unsure, untimely, and costly access to appropriate inputs, the program made fertilizer and improved seeds available just prior to land preparation. To test the role of imperfect farmer knowledge, certain communities were provided with more intensive extension. In addition, two text messaging interventions provided farmers with information about either weather forecasts or market prices. Preliminary results suggest that large insurance grants – but not small grants – induce sizeable investments. Extension agents induce significant but small impacts on farmer knowledge and practice. Input provision had little impact. Text messages with weather forecasts changed the timing of farmer activities and increased profits.
For more information contact: Ken Omondi.