Does contract farming improve rice farmers' food security? Empirical evidence from Ghana

Abstract

PurposeIn order to improve access to resources for smallholder farmers, efforts are being made to promote contract farming in Ghana. This is seen as a strategy to increase agricultural productivity of farmers, give better market access and guarantee adequate supply of raw materials to agro-based industries. However, the challenge is whether contract farming leads to improvement in food security status of farmers. The study therefore seeks to explore to what extent farmers' food security status is influenced by their participation in contract farming activities.Design/methodology/approachUsing Cragg's double-hurdle model to analyse participation in contract farming, the authors control for selection bias using propensity score matching applied to a data set of 336 observations to examine the impact of contract farming on the food security levels of rice farmers in Ghana.FindingsThe results of this study show that yield of paddy and the wealth of the farmer are the main factors that influence the quantity of paddy rice to be contracted in contract farming arrangements. This study also finds that participation in contract farming will increase food security by 109%. In conclusion, contract farming has a significant positive impact on the farmers' food security status.Originality/valueAgricultural policies and rural development initiatives supporting the promotion and expansion of contract farming should be pursued to persuade more farmers to produce under contract farming agreements.