Abstract
BackgroundTraditional cost–benefit analysis of soybean production tends to largely focus on financial benefits to farmers, and less so on non-market co-benefits in sustaining smallholder farming systems. Relying solely on the standard financial analysis undermines the actual benefit of soybean production, which often results in ineffectual policy designs. An economic analysis that incorporates key non-pecuniary co-benefits of soybean production provide vital insight that contributes to improving productivity and overall economic well-being of farmers. Cross-sectional data were collected from 271 farmers to estimate the overall economic benefit of soybean that captures both market and non-market attributes in three major producing districts (Sissala-West, Wa-East, and Dafiama-Busie-Issa (DBI)) of Ghana.ResultsWhen non-market co-benefits were omitted, soybean production was not profitable (−Gh¢103.10/ha or −US$22.91) in DBI while Sissala-West and Wa-East had modest profit margins. However, the financial analysis changed dramatically when an average non-market value of Gh¢345.69 (US$76.82) was incorporated in the analysis. The soybean system was, therefore, financially viable for all the districts when the non-market attributes of the crop were considered.ConclusionsThe findings demonstrate the importance of the non-pecuniary benefits of soybean in smallholder farming systems for policy decision-making. For instance, farmers’ motivation for soybean production is closely linked to those ancillary benefits like the biological nitrogen fixed in the soil for cultivation of other crops. Similarly, crop administrators and policy makers’ support for conservation agriculture and green environment is tied to these non-market co-benefits.
Highlights
Traditional cost–benefit analysis of soybean production tends to largely focus on financial benefits to farmers, and less so on non-market co-benefits in sustaining smallholder farming systems
When the analysis was limited to only market sales, the return on investment was 17% in Wa East, 39% in Sissala West and -9% in Bussie Daffiama Issa (BDI) district
The study estimates the overall economic benefit of smallholder soybean production that accounts for market and non-market benefits in the Upper West region of Ghana
Summary
Traditional cost–benefit analysis of soybean production tends to largely focus on financial benefits to farmers, and less so on non-market co-benefits in sustaining smallholder farming systems. The farmers rely on rudimentary agriculture technologies such as cutlasses and hoes [4], but are responsible for about two-thirds of the national food demand in the country [5]. In such farming systems, the production of soybean is limited to potential incomes from the sales of grains [1, 6, 7], and to generate other non-pecuniary co-benefits which sustains the entire farming systems and overall farm household well-being [3, 8]. The weakness of the traditional economic analysis of the smallholder soybean farming raises a fundamental research question: Does the associated non-pecuniary co-benefits of soybean affect its economic viability in a smallholder farming system?
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