Market Participation and Farm Profitability: The Case of Northern Ghana

Mzyece, Agness (2021) Market Participation and Farm Profitability: The Case of Northern Ghana. Sustainable Agriculture Research, 10 (2). pp. 1-11. ISSN 1927-050X

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Abstract

This study examines the effect of quantity sold (sales volume) on profitability of market participating smallholder farmers in northern Ghana. Market participation has been shown to be important for increasing incomes and improving production efficiency for farm households but still remains low in SSA. While agribusiness and development experts generally advocate for more intensive market participation, it is not clear if selling more results in more profits for smallholder farmers in remote markets that are prone to exorbitant transaction costs. The data used in this study is from the APS survey conducted in 2013 and 2014 in Northern Ghana which had a sample size of 527. The study is based on the theory of profit maximization, in which separability is inferred from observed market participation. OLS regression is used for empirical estimation after rejecting the hypothesis of endogeneity in the model. Mean gross margin/ kg across four groups of farmers ranked by quantity sold is also statistically examined. The results confirm the existence of economies of scale and also show that different crops have different effects on profitability. The results also show that although unambiguously positive, the relationship between quantity sold and profitability may not be linear.

Item Type: Article
Subjects: Science Global Plos > Agricultural and Food Science
Depositing User: Unnamed user with email support@science.globalplos.com
Date Deposited: 14 Jun 2023 12:17
Last Modified: 19 Dec 2023 03:27
URI: http://ebooks.manu2sent.com/id/eprint/1121

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