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Effects of farm credit access on agricultural commercialization in Ghana: Empirical evidence from the northern Savannah ecological zone
Author(s) -
Sekyi Samuel,
Abu Benjamin Musah,
Nkegbe Paul Kwame
Publication year - 2020
Publication title -
african development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.654
H-Index - 32
eISSN - 1467-8268
pISSN - 1017-6772
DOI - 10.1111/1467-8268.12424
Subject(s) - nonfarm payrolls , commercialization , endogeneity , production (economics) , agriculture , agricultural economics , agricultural productivity , business , marital status , economics , agricultural science , geography , marketing , econometrics , population , demography , archaeology , sociology , macroeconomics , environmental science
The purpose of this paper is to investigate how farmers' access to credit affects agricultural commercialization in the northern Savannah ecological zone of Ghana. The study uses data from the Ghana Feed the Future baseline survey involving a total sample of 2,962 farm households. The study employs endogenous switching regression for ordered outcomes to account for endogeneity and self‐selection bias in the decision to access credit. The results from the estimations revealed that education, age, nonfarm business equipment, multiple crop production, and group membership are the variables influencing farmers' access to credit. Agricultural commercialization is determined by gender, age, marital status, household size, farm size, nonfarm business equipment, means of transport, group membership, assets index, multiple crop production, and location. In terms of causal effect, the results show that credit access stimulates higher commercialization. Thus policies that enhance farmers' access to credit are more likely to be successful in getting them to commercialize.