Abstract
AbstractThis paper examines the impact of rice value chain participation and social networks on smallholder farmers' market performance outcomes (paddy price, quantity of paddy traded, and net returns), using data from a recent survey of 458 smallholder rice farmers in northern Ghana. We employed a treatment effects model to account for potential selection bias associated with observable and unobservable factors. The empirical results reveal that smallholder farmers' participation in a rice value chain is associated with increased paddy price, quantity traded, and net returns. We also find that value chain participation decisions and market performance are positively and significantly influenced by social networks. The empirical results also suggest that sex, farm size, mobile phone ownership, and access to credit significantly increase paddy prices, quantity traded, and net returns of smallholder rice farmers in the value chain.
Highlights
In the past 2–3 decades, agricultural value chains in developing countries have experienced dramatic structural transformation, driven by several factors such as population growth, rising urbanization, increasing consumer incomes, and varying consumer dietary requirements (Henderson & Isaac, 2017; Mensah, Adu, Amoah, Abrokwa, & Adu, 2016; Swinnen & Kuijpers, 2019)
This paper examines the impact of rice value chain participation and social networks on smallholder farmers' market performance outcomes, using data from a recent survey of 458 smallholder rice farmers in northern Ghana
We examined the role of rice value chain participation and social networks in improving smallholder rice farmers' market performance outcomes such as paddy price received, quantity of paddy traded, and net returns, using data from a recent survey of 458 smallholder rice farmers from five districts in northern Ghana
Summary
In the past 2–3 decades, agricultural value chains in developing countries have experienced dramatic structural transformation, driven by several factors such as population growth, rising urbanization, increasing consumer incomes, and varying consumer dietary requirements (Henderson & Isaac, 2017; Mensah, Adu, Amoah, Abrokwa, & Adu, 2016; Swinnen & Kuijpers, 2019). To link value chain participation decision to the market performance outcomes, we assume a linear function between a vector of the outcome measures and a vector of farm, household, and social network characteristics (Xi), and a dummy variable representing value chain participation (VCi), specified as: Yi = Xiθ + VCi β + μi,. We use treatment effects model in the empirical analysis (Cong & Drukker, 2000), which accounts for observable and unobservable factors In this context, the treatment effects model estimates the factors influencing smallholder rice farmers' decisions to participate in a rice value chain, and their impacts on paddy price received, quantity traded, and net returns. It is captured as a dummy variable, whereby one is assigned to a farmer who did not need credit, or the one who needed credit, applied for it and received the required
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