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Capital and credit constraints in the engagement of youth in Ghanaian agriculture

Capital and credit constraints in the engagement of youth in Ghanaian agriculture The purpose of this paper is to determine the factors influencing rural youth farmers’ credit constraints status and the effect of credit constraint on the intensity of participation of these farmers in Ghana.Design/methodology/approachThe econometric estimation is based on cross-sectional data collected in 2018 from the Brong Ahafo region in Ghana. The sample data set consists of 450 rural youth farmers. The collected data were analyzed through different econometric techniques, using the endogenous switching regression model (ERSM).FindingsThe direct elicitation approach employed in this study revealed that out of the 450 farmers, 211 (47 percent) of the respondents were credit constrained compared to 239 (53 percent) of their counterparts who were unconstrained. The ERSM indicated that youth farmers education, age, savings, parents occupation reduced the probability of the rural youth farmer to be credit constrained but cumbersome loan application procedure and loan disbursement time positively affect credit constraint. Moreover, farmers that are credit constrained have lower intensity of participation in agriculture activities than a random farmer from the sample. This suggests that access to credit has a positive impact on the intensity of participation in agriculture activities.Research limitations/implicationsIn this study, only rural youth farmers in a particular region were considered. However, there are youths all over the nation. Therefore, future researchers could consider other youth’s farmers elsewhere in the country.Originality/valueAlthough existing studies have examined rural youth farmers’ participation in agriculture and credit constraint separately, the unique contribution of this paper is the analysis of credit constraint of rural youth farmers as well as the impact of credit constraint on the intensity of participation in agriculture activities. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Agricultural Finance Review Emerald Publishing

Capital and credit constraints in the engagement of youth in Ghanaian agriculture

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0002-1466
DOI
10.1108/afr-11-2018-0100
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to determine the factors influencing rural youth farmers’ credit constraints status and the effect of credit constraint on the intensity of participation of these farmers in Ghana.Design/methodology/approachThe econometric estimation is based on cross-sectional data collected in 2018 from the Brong Ahafo region in Ghana. The sample data set consists of 450 rural youth farmers. The collected data were analyzed through different econometric techniques, using the endogenous switching regression model (ERSM).FindingsThe direct elicitation approach employed in this study revealed that out of the 450 farmers, 211 (47 percent) of the respondents were credit constrained compared to 239 (53 percent) of their counterparts who were unconstrained. The ERSM indicated that youth farmers education, age, savings, parents occupation reduced the probability of the rural youth farmer to be credit constrained but cumbersome loan application procedure and loan disbursement time positively affect credit constraint. Moreover, farmers that are credit constrained have lower intensity of participation in agriculture activities than a random farmer from the sample. This suggests that access to credit has a positive impact on the intensity of participation in agriculture activities.Research limitations/implicationsIn this study, only rural youth farmers in a particular region were considered. However, there are youths all over the nation. Therefore, future researchers could consider other youth’s farmers elsewhere in the country.Originality/valueAlthough existing studies have examined rural youth farmers’ participation in agriculture and credit constraint separately, the unique contribution of this paper is the analysis of credit constraint of rural youth farmers as well as the impact of credit constraint on the intensity of participation in agriculture activities.

Journal

Agricultural Finance ReviewEmerald Publishing

Published: Jan 7, 2020

Keywords: Ghana; Participation; Credit constraint; Endogenous switching regression; Rural youth farmers

References