The economics of small-scale private pump irrigation and agricultural productivity in Ghana

Abstract

A key policy strategy towards poverty reduction and ensuring food security in sub-Saharan Africa is to assist poor farmers who over-depend on rainfall to reduce variability in production and increase productivity through small-scale private pump irrigation. Despite the fact that the performances of large scale irrigation schemes have not been efficient and optimal in terms of anticipated economic benefits, not much evidence exist on small-scale private pump irrigation as an alternative investment option in smallholder agricultural production in Africa. Not much emphasis also has been put on the opportunity costs of family labor time in small-scale private pump irrigation, which happens to be one of the key ingredients in the decision making of smallholder farmers who engage in irrigation agriculture. This paper examines the economics of small-scale private pump irrigation and agricultural productivity using a survey data collected in four administrative regions of Ghana, including, the Northern, Upper East, Eastern, and Volta. Mixed method approach that combines both qualitative and quantitative analytical tools are employed in the study. The empirical approach involves estimating a production function in order to derive the shadow wages of family labor directly from the marginal agricultural productivity. Notably, the production functions of small-scale private motor pump irrigators using groundwater and surface water and small-scale private manual pump irrigators are estimated and compared with that of rainfed farmers and gravity flow irrigators after which, the implicit wages of family labor is computed for each irrigation farmer. The paper finds that among the entire small-scale private pumps irrigators, groundwater motor pump irrigators have significantly higher value-added output and tend to do better in terms of financial returns to small-scale private pumps irrigation. The empirical results indicate that small-scale private motor pump irrigators who use groundwater or surface water are able to generate the highest implicit wage rate of family labor, and concludes that small-scale private pump irrigation in sub-Saharan Africa would be successful if it is combined with the efficient use of inputs of production, including seeds, fertilizer, and chemical inputs. The paper contributes to expanding the existing debate on irrigation development in sub-Saharan Africa by highlighting on the potential of small-scale private pump irrigation in Ghana. Governments in sub-Saharan Africa should consider irrigation as part of a wider agricultural policy strategy by promoting farmer education and developing market infrastructure to enhance the returns to small-scale private irrigation and attract private sector investors into the irrigation sub-sector.