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Ghana's economy is largely agrarian, and the business of agriculture is dominated by smallholder farmers who are predominantly rural dwellers. As a result, efforts to lift rural farming households from poverty have been narrowed to the promotion of agricultural development to the neglect of the rural non-farm sector. However, this is fast changing in the advent of a burgeoning rural nonfarm economy and must engage the attention of policy actors. This study thus assesses the effect of non-farm participation on households' level of commercialization of agricultural crops in Ghana.

The study applies a generalized structural equation model (GSEM) to the Ghana Living Standards Survey round 6 dataset, a stratified and nationally representative random sample of 16,772 households in 1,200 enumeration areas.

This study finds that non-farm participation increases the produce sold to output ratio. It is concluded that non-farm engagement by farmers boosts commercialization in Ghana. Thus, for the Ghanaian and similar contexts, agricultural development interventions that incorporate non-farm activities are more likely to be successful in improving livelihoods.

The study uses only the ratio of sales value to output value definition for commercialization and acknowledges use of multiple definitions could be superior.

Various empirical studies have examined the link between the farm and nonfarm sectors. This paper is original in its approach as it tackles an aspect of the subject that has been understudied, namely, an exploration of nonfarm and farm linkages from the perspective of agricultural commercialization.

The paper examines the effect of internal remittances on the employment choices of household heads in rural Ghana.

The paper employs data from the Ghana Living Standards Survey (GLSS 6) of the Ghana Statistical Service. Due to issues of endogeneity of remittances in relation to labor supply, the paper adopts an instrumental variable approach in the analysis. First, employment choices are categorized into three: (1) wage/salary employment, (2) self-employment and (3) domestic/family employment. The relationship is then modeled as instrumental variable multinomial probit (IV-MNP). Secondly, employment choices are recategorized into two: farm employment and otherwise and modeled as instrumental variable probit (IV-PROBIT). The models are estimated via the conditional mixed process (CMP) estimation technique.

The results indicate that remittances have a negative effect on self-employment and a positive effect on domestic/family employment. Thus, remittances reduce participation in self-employment but increase participation in domestic/family employment. Furthermore, remittances have a negative effect on participation in farm employment. The results are robust to different measures of remittances: receipt of remittances (dummy) and remittance income.

The results suggest that remittances are used for consumption rather than investing in earning activities. In general, engaging in earning type of employment, whether farm and nonfarm employment will decline with receipt of remittances in rural Ghana. There is a need for policy attention with the increasing migration of people out of rural areas.

Prior to this study, little was known on the effect of internal remittances on labor supply decisions of remittance recipients in Ghana, particularly rural Ghana. This paper contributes significantly to filling this knowledge gap.