Innovations in smallholder agricultural financing and economic efficiency of maize production in Ghana’s northern region
This study used PSM and the selectivity-corrected framework for stochastic frontiers to examine how innovative agricultural finance practices of maize farmers in northern Ghana affect economic efficiency. We find, consistently, that users of innovative financing have higher technical (TE), allocativ...
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| Format: | Article |
| Language: | English |
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Elsevier
2022-12-01
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| Series: | Heliyon |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2405844022033758 |
| _version_ | 1797960903648346112 |
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| author | Mark Appiah-Twumasi Samuel Arkoh Donkoh Isaac Gershon Kodwo Ansah |
| author_facet | Mark Appiah-Twumasi Samuel Arkoh Donkoh Isaac Gershon Kodwo Ansah |
| author_sort | Mark Appiah-Twumasi |
| collection | DOAJ |
| description | This study used PSM and the selectivity-corrected framework for stochastic frontiers to examine how innovative agricultural finance practices of maize farmers in northern Ghana affect economic efficiency. We find, consistently, that users of innovative financing have higher technical (TE), allocative (AE), and economic efficiency (EE) scores than nonusers. The efficiency gaps between users and nonusers are 4% for TE; 5% for AE; and 10% for EE. Contrary to expectation, farmers’ access to mechanized services diminished their TE. Our findings indicate that short-term policies to increasing maize output should focus on reducing inefficiency levels than introducing new technologies. This can be achieved by providing technical training to farmers through improved access to agricultural extension services, provisioning farmers with timely access to tractors and equipment, and facilitating access to profitable output markets. The positive efficiency effects of using innovative financing suggests that policies should favour creating further sources of informal financial options for poor rural farmers. Here, Village Savings and Loans Associations can mitigate credit supply risks by linking farmers directly to inputs and reducing the need for cash loans. Local governments must harness Ghana Government’s Planting for Export and Rural Development programme to create sustainable employment opportunities that enable farmers to raise farm investment capital in the off-season. |
| first_indexed | 2024-04-11T00:52:22Z |
| format | Article |
| id | doaj.art-89c72366215343b7b3e8e60bb08b29b9 |
| institution | Directory Open Access Journal |
| issn | 2405-8440 |
| language | English |
| last_indexed | 2024-04-11T00:52:22Z |
| publishDate | 2022-12-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Heliyon |
| spelling | doaj.art-89c72366215343b7b3e8e60bb08b29b92023-01-05T08:38:30ZengElsevierHeliyon2405-84402022-12-01812e12087Innovations in smallholder agricultural financing and economic efficiency of maize production in Ghana’s northern regionMark Appiah-Twumasi0Samuel Arkoh Donkoh1Isaac Gershon Kodwo Ansah2Department of Agricultural and Food Economics, Faculty of Agriculture, Food and Consumer Sciences, University for Development Studies, Tamale, Ghana; Corresponding author.Department of Economics, School of Applied Economics & Management Sciences, University for Development Studies, Tamale, GhanaDepartment of Economics, School of Applied Economics & Management Sciences, University for Development Studies, Tamale, GhanaThis study used PSM and the selectivity-corrected framework for stochastic frontiers to examine how innovative agricultural finance practices of maize farmers in northern Ghana affect economic efficiency. We find, consistently, that users of innovative financing have higher technical (TE), allocative (AE), and economic efficiency (EE) scores than nonusers. The efficiency gaps between users and nonusers are 4% for TE; 5% for AE; and 10% for EE. Contrary to expectation, farmers’ access to mechanized services diminished their TE. Our findings indicate that short-term policies to increasing maize output should focus on reducing inefficiency levels than introducing new technologies. This can be achieved by providing technical training to farmers through improved access to agricultural extension services, provisioning farmers with timely access to tractors and equipment, and facilitating access to profitable output markets. The positive efficiency effects of using innovative financing suggests that policies should favour creating further sources of informal financial options for poor rural farmers. Here, Village Savings and Loans Associations can mitigate credit supply risks by linking farmers directly to inputs and reducing the need for cash loans. Local governments must harness Ghana Government’s Planting for Export and Rural Development programme to create sustainable employment opportunities that enable farmers to raise farm investment capital in the off-season.http://www.sciencedirect.com/science/article/pii/S2405844022033758Innovative financingEconomic efficiencySample selection stochastic frontierPropensity score matchingVillage savings and loans associationGhana |
| spellingShingle | Mark Appiah-Twumasi Samuel Arkoh Donkoh Isaac Gershon Kodwo Ansah Innovations in smallholder agricultural financing and economic efficiency of maize production in Ghana’s northern region Heliyon Innovative financing Economic efficiency Sample selection stochastic frontier Propensity score matching Village savings and loans association Ghana |
| title | Innovations in smallholder agricultural financing and economic efficiency of maize production in Ghana’s northern region |
| title_full | Innovations in smallholder agricultural financing and economic efficiency of maize production in Ghana’s northern region |
| title_fullStr | Innovations in smallholder agricultural financing and economic efficiency of maize production in Ghana’s northern region |
| title_full_unstemmed | Innovations in smallholder agricultural financing and economic efficiency of maize production in Ghana’s northern region |
| title_short | Innovations in smallholder agricultural financing and economic efficiency of maize production in Ghana’s northern region |
| title_sort | innovations in smallholder agricultural financing and economic efficiency of maize production in ghana s northern region |
| topic | Innovative financing Economic efficiency Sample selection stochastic frontier Propensity score matching Village savings and loans association Ghana |
| url | http://www.sciencedirect.com/science/article/pii/S2405844022033758 |
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