Implications of Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern Ghana

Abstract

Using survey data from northern Ghana, this study seeks to establish the impact of participation in non-farm work on the vulnerability of resource poor households to food poverty. Vulnerability to food poverty is assessed based on expected future food expenditure of households. The potential endogeneity problem associated with participation in non-farm work by households is overcome using a novel instrumental variable approach. Analysis of the determinants of expected future food expenditure is done using a standard Feasible Generalized Least Squares (FGLS) method. Demographic and socioeconomic variables, location variables, and household facilities are included in the model as control variables. Our study finds that participation in non-farm work significantly increased the future expected food consumption, thereby alleviating the vulnerability of households to food poverty. Our study also confirms that current food poverty and future food poverty, i.e., vulnerability to food poverty, are not independent from each other. Non-farm work plays a crucial role in providing the means to overcome the risk of food poverty in these resource poor households. Policies that promote off-farm income generating activities, such as small businesses and self-employment, as well as the creation and support of businesses that absorb extra labor from the farm, should be encouraged in the study region. Because households in the study region are exposed to above average levels of hunger and food poverty, the study recommends the government of Ghana and development partners to take measures that enhance the resilience of these resource poor households.