Farmer groups, collective marketing and smallholder farm performance in rural Ghana

Abstract

PurposeRapid transformation of agrifood value chains because of population growth, urbanization, rising consumer incomes and increased demand for food quality and safety has resulted in the need for smallholder farmers to coordinate horizontally through group formation and collective marketing to improve farm performance in developing countries. This paper aims to examine the factors that influence farmer group membership and collective marketing decisions and their impacts on smallholder farm performance in rural Ghana.Design/methodology/approachUsing data from a recent survey of 447 rice farmers in rural Ghana, an endogenous switching regression model is employed to account for selection bias arising from both observable and unobservable farmer attributes.FindingsThe data reveal that group members and collective marketing participants obtained higher prices and also incurred lower input costs. The econometric estimates show that age, access to credit, mobile phone ownership, distance to market and road status are the main drivers of group membership and collective marketing decisions. The authors also find positive and significant impacts of farmer group membership and collective marketing on farm net revenues.Research limitations/implicationsThe findings from this study suggest that government and donor support for the formation of farmer groups during implementation of agriculture and value chain interventions should as well incorporate strategies to facilitate collective marketing.Originality/valueTo the best of the authors’ knowledge, this study is the first to examine the role farmer groups and collective marketing play in improving smallholder farm performance.