Fertiliser Subsidy and Technical Efficiency of Smallholder Farmers in Selected Districts in the Transitional and the Guinea Savannah Zones of Ghana

Abstract

The study examined the impact of Ghana’s fertiliser subsidy programme on maize output and technical efficiency among smallholder farmers in Ghana. Several null hypotheses were tested based on data gathered from a sample of three hundred and fifty-two (352) farmers drawn from two of Ghana’s five agro-ecological zones, the Transition zone and the Guinea savannah zone. Both a probit and stochastic frontier models were used to estimate the determinants of access by farmers to fertiliser subsidy and to assess the impact of the fertiliser subsidy programme on maize output and technical efficiency, respectively. Among others, the study found that age, sex, education, access to improved seed, off farm activities, political influence and distance to the nearest fertiliser retail shop influence farmers’ access to subsidised fertiliser. The study also revealed that access to subsidised fertiliser was low (42.3%) although it positively increases maize output in both Guinea savannah and Transition zones. The study estimated mean TEs of 68.7% and 68.9% in the Transition and the Guinea savannah zones respectively. Also, access to subsidy was found to decrease TE of smallholder farmers in both zones significantly. It is therefore concluded that access to subsidised fertiliser has a mix effect on maize output and needs further investigation.