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Credit access and technical efficiency of smallholder farmers in Northern Ghana

Credit access and technical efficiency of smallholder farmers in Northern Ghana The purpose of this paper is to examine the relationship between credit access and technical efficiency of smallholder crop farmers in northern Ghana.Design/methodology/approachThe study uses a random sample of 445 farming households in the three northern regions of Ghana. The two-stage double bootstrap DEA approach was used to consistently estimate technical efficiency scores as well as the determinants.FindingsThe results revealed that, given the current technology, there is substantial yield or productivity gap among the sample of producers in northern Ghana used for the study. This is because producers can reduce input use by over 50.0 percent while still achieving the same output levels. It is further revealed that proportion of household income from off-farm activities, distance of farm from homestead, location and credit access are significant determinants of technical efficiency.Originality/valueThe current study differs from previous studies in two basic ways. First, it takes into account the fact that smallholder farmers practise mixed or inter-cropping by using value of output so that various crops on a given plot of the farmer can be aggregated; and second, a nonparametric approach is adopted so that the inherent inconsistencies in using the two-step model within a parametric framework can be avoided. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Agricultural Finance Review Emerald Publishing

Credit access and technical efficiency of smallholder farmers in Northern Ghana

Agricultural Finance Review , Volume 78 (5): 14 – Sep 17, 2018

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0002-1466
DOI
10.1108/afr-03-2018-0018
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to examine the relationship between credit access and technical efficiency of smallholder crop farmers in northern Ghana.Design/methodology/approachThe study uses a random sample of 445 farming households in the three northern regions of Ghana. The two-stage double bootstrap DEA approach was used to consistently estimate technical efficiency scores as well as the determinants.FindingsThe results revealed that, given the current technology, there is substantial yield or productivity gap among the sample of producers in northern Ghana used for the study. This is because producers can reduce input use by over 50.0 percent while still achieving the same output levels. It is further revealed that proportion of household income from off-farm activities, distance of farm from homestead, location and credit access are significant determinants of technical efficiency.Originality/valueThe current study differs from previous studies in two basic ways. First, it takes into account the fact that smallholder farmers practise mixed or inter-cropping by using value of output so that various crops on a given plot of the farmer can be aggregated; and second, a nonparametric approach is adopted so that the inherent inconsistencies in using the two-step model within a parametric framework can be avoided.

Journal

Agricultural Finance ReviewEmerald Publishing

Published: Sep 17, 2018

Keywords: Technical efficiency; Ghana; DEA; Credit; Truncated model; O12; Q12; Q14

References