Anthony Siaw, Yuansheng Jiang, Martinson Ankrah Twumasi, Wonder Agbenyo, Gideon Ntim-Amo, Frank Osei Danquah and Ernest Kwarko Ankrah
The purpose of this study is to examine the impact of access to credit on technical efficiency (TE) of maize farmers in a developing country, Ghana.
Abstract
Purpose
The purpose of this study is to examine the impact of access to credit on technical efficiency (TE) of maize farmers in a developing country, Ghana.
Design/methodology/approach
The study employed an instrumental variable approach and the stochastic frontier analysis (SFA) method for the estimation of the results.
Findings
The study found that farmers who have access to agricultural credit stand the chance of increasing TE by a margin of 8%, which also influences the maize production than those who did not have access to credit. The average TE score of the farmers was 74%. The study also found out that factors like membership, gender, farmers' access to credit, age and social network determine farmers' possibility of accessing agricultural credit. The study finds out that returns to size are increasing among the maize farmers and that significant improvement in efficiency can be realized by increasing the level of input used in production. Also, factors such as farm size, labor, seeds and fertilizer are the essential determinants of maize production output. Also, gender, extension, age, off-farm income, access to credit and membership were significant factors influencing technical inefficiency (TI).
Originality/value
The paper contributes to the existing literature on agricultural credit on rural agricultural development. The problem of endogeneity associated with access to credit, which has been considered by other researchers, is dealt with this study. This paper also provides information to government policymakers, practitioners and all other stakeholders in the maize sub-sectors and also will benefit small farmers outside the study area.
Details
Keywords
Martinson Ankrah Twumasi, Yuansheng Jiang, Frank Osei Danquah, Abbas Ali Chandio and Wonder Agbenyo
The purpose of this paper is to examine the effect of savings mobilization on access to credit among smallholder farmers’ in the Birim central municipality of Ghana.
Abstract
Purpose
The purpose of this paper is to examine the effect of savings mobilization on access to credit among smallholder farmers’ in the Birim central municipality of Ghana.
Design/methodology/approach
A cross-sectional primary data set was used to estimate the factors influencing smallholder farmers’ access to credit and size of loan to be borrowed using the IV-Probit and IV-Tobit model.
Findings
The results of the study revealed that savings mobilization has a positive significant impact on access to credit and the total amount of credit one can borrow as well. Other control variables such as transaction cost and farm size depicted a negative significant impact on access to credit. Land ownership, member of an association, household size, years of farming experience and education also showed a positive significant impact on access to credit.
Research limitations/implications
The paper only examined the savings effect on credit accessibility among smallholder farmers in one of the municipality’s in the Eastern region of Ghana. Future research should consider all or many municipality for an informed generalization of findings.
Practical implications
This paper provides evidence that smallholder farmers knowledge on the financial market is poor and it would require the policymakers or NGOs to organize financial management training programs so that the farmers high ignorance of the financial market will significantly reduce.
Originality/value
Although existing studies have examined smallholder farmers’ access to credit, the unique contribution of this paper is the analysis of the impact of saving mobilization on credit accessibility in Ghana, a major access to credit determinant in the financial market. In addition, those researchers who factored in savings as an access to credit determinant did not also consider the casual relationship between these two variables, thus, the present of endogeneity of which this paper does.
Details
Keywords
Richard Kwasi Bannor, Helena Oppong-Kyeremeh, Steffen Abele, Frank Osei Tutu, Samual Kwabena Chaa Kyire and Dickson Agyina
The unavailability and inadequate use of cashew seedlings for propagation are part of the challenges facing the cashew sub-sector in Ghana. However, promoting investment into…
Abstract
Purpose
The unavailability and inadequate use of cashew seedlings for propagation are part of the challenges facing the cashew sub-sector in Ghana. However, promoting investment into cashew seedling production should be based on the analysis of the profitability and viability of such a venture as well as the respective determinants of farmers' demand for the planting material.
Design/methodology/approach
This study used gross margin/contribution, net margin and contribution ratios to analyse the profitability of cashew seedling production under four different business models. Also, the determinants of choice of planting material for cashew plantation among farmers was analysed via a multinomial probit regression.
Findings
The study revealed that cashew seedling production is profitable with a gross margin of $8,474, $2,242, $1,616 and $1,797 and contribution to sales of 31–53% for the various business models. The positive determinants of the use of cashew seedlings were off-farm job participation and extension contact, whereas farm size and age of plantation negatively influenced the use of seedlings. Land acquisition method also influenced the use of both seedlings and seeds negatively.
Practical implications
The findings provide empirical evidence of the viability and profitability of cashew seedling production as a viable business venture and off-farm opportunity in rural areas. The information from the study will help major stakeholders in cashew production to understand the type of farmers who use seeds and seedlings as well as the reasons for using or otherwise.
Originality/value
Significant research in the cashew value chain had focussed on the profitability of cashew plantation with little literature on profitability and viability analysis of cashew seedling production. Similarly, this study provides a significant value chain job opportunity as well as literature on the choice of cashew seedlings among current and prospective end-users.
Details
Keywords
Kofi Kamasa, David Nii Nortey, Frank Boateng and Isaac Bonuedi
This paper assesses the impact of tax reforms on tax revenue mobilisation in Ghana.
Abstract
Purpose
This paper assesses the impact of tax reforms on tax revenue mobilisation in Ghana.
Design/methodology/approach
The autoregressive distributed lag model together with dynamic ordinary least squares and fully modified least squares techniques were employed on a time-series data spanning from 1980–2018. Exploiting data from IMFs monitoring of fund arrangements database, an index of tax reforms is constructed as a function of the number of successfully implemented tax-related reforms and policy measures per year over the study period.
Findings
Having established the presence of co-integration between tax revenue and its determinants, this paper finds strong evidence that tax-related reforms exert positive and significant impact on tax revenue generation in Ghana. Among other covariates, the results show that the tax base (real GDP), public debt and education (human capital index) significantly boosts tax revenue in the long run.
Originality/value
The success of tax reforms in boosting revenue mobilisation has been examined in light of the buoyancy and elasticity of the tax system in Ghana, albeit with little emphasis on the extent to which tax reforms contribute to tax revenue mobilisation from econometric perspective. This paper fills this gap in the literature by analysing the impact of tax reforms on tax revenue mobilisation in Ghana. As a recommendation, well-designed and implemented tax reforms and policies aimed at increasing the tax base, education and effective utilisation of funds from public debt promise to be instrumental in boosting tax revenue in Ghana.
Details
Keywords
Ernest Christlieb Amrago and Nicholas Oppong Mensah
The purpose of this study is to examine trade credit from agrochemical vendors as an alternative source of finance for cabbage producers in the Bono East Region of Ghana. The…
Abstract
Purpose
The purpose of this study is to examine trade credit from agrochemical vendors as an alternative source of finance for cabbage producers in the Bono East Region of Ghana. The determinants of trade credit supply and impact on cabbage producer’s profitability are investigated.
Design/methodology/approach
The study sample size is 260. The perception index, probit regression, negative binomial regression and the propensity score matching (PSM) was employed to assess the perception of trade credit, factors influencing trade credit supply and the impact of trade credit supply on the cabbage producer’s profitability and agrochemical vendor’s welfare respectively.
Findings
The perception index analysis revealed that the agrochemical vendors, in general, had a positive perception of trade credit. Different groups of factors influence trade credit supply. Further along, the number of times trade credit was used by the cabbage producers was influenced by several factors. On the PSM result, trade credit use had a significant positive impact on the cabbage producer’s profitability. In detail, all the matching estimations revealed that profitability increased above Gh¢ 4,000.00 (US$ 692.04). Likewise, the robustness check result (Inverse Probability Weighted Regression Adjustment (IPWRA)), was no different from the matching estimations. Generally, the result indicates that the impact of trade credit supply on the agrochemical vendor's welfare using total household expenditure, total savings and income as proxy variables for welfare were positive.
Originality/value
Trade credit has encountered less attention in the agricultural finance discourse; however, this study makes an imperative contribution on the same. Specifically, the study reveals the determinants of trade credit supply from agrochemical vendors and a positive impact of trade credit use on the cabbage producer’s profitability, a result which has not been investigated in the trade credit literature.