RICE COMMERCIALIZATION AND RURAL HOUSEHOLD WELFARE IN NORTHERN GHANA

Abstract

In the Northern region of Ghana, despite significant rice production, rice commercialization lags behind rice imports. Smallholder farmers, with potential for commercial-scale production primarily operate at subsistence levels. This study surveyed 420 rice-producing households, utilizing descriptive statistics to outline variables and exploring the role of agricultural support services in crop commercialization. The Binary Probit model identified determinants, while the endogenous switching regression model assessed its impact on per capita consumption expenditure. Propensity Score Matching (PSM) technique evaluated effects on household income. Findings reveal strategic allocation of 66% of rice production for sales, with factors such as age, farm size, and other non-agricultural factors influencing commercialization. Commercializing households show higher per capita consumption expenditure with an income distribution concentrated in the GHS 1001–GHS5000 range. Propensity score matching indicates a substantial (36.1%) income increase associated with rice commercialization. Non-farm income, remittances, agricultural training, and improved seeds play crucial roles. The study provides comprehensive insights, guiding efforts to enhance sustainable agricultural growth and economic well-being for smallholder farmers in Northern Ghana. Government policies in Northern Ghana should prioritize improving farmers' access to quality seeds and extension services, particularly through initiatives like the Planting for Food and Jobs program. Essential investments in rural infrastructure are crucial for reducing market access challenges and promoting smallholder engagement in commercial agriculture. To enhance market opportunities, policies should focus on strengthening linkages, implementing value addition initiatives, and exploring private sector partnerships to boost competitiveness and income from locally produced rice. Future research should consider comprehensive longitudinal studies to assess the sustained impact of rice commercialization on household income and economic well-being in the region