Understanding smallholder preferences for joint ventures in Ghana's rice sector: Improving market access through inclusive business models

Abstract

Efforts to connect farmers with markets in an inclusive manner have gained prominence within organizations like the Food and Agriculture Organization of the United Nations (FAO) and Inclusive Business Models (IBMs) have emerged as a promising avenue for achieving this objective. Currently, the adoption of IBM structures remains limited, particularly in developing countries, resulting in a paucity of information on motivating factors behind farmer engagement. This study employs a discrete choice experiment to discern these preferences, focusing on a joint venture model within the rice sector in Ghana. Data from face-to-face surveys with smallholder rice farmers analysed with a latent class model revealed heterogeneity in preferences towards IBM attributes, with a majority (55 per cent) choosing alternatives that were consistent with a joint venture business model. These related to level of investment and decision making, quality standards, price, payment schedules and control. The study also identified demographic and experiential characteristics of farmers willing to engage with IBMs. Such farmers tended to be more educated, younger, possess greater experience in rice farming, manage smaller farms, have experience with contracts, invest in processing equipment, and infrequently adopt new production practices. These findings underscore the potential to enhance the quality of domestically produced rice through IBMs and advocate for government intervention to overcome barriers, especially in the context of investment. Additionally, the results suggest that targeting younger farmers with prior contract-selling experience could encourage participation in IBMs.