Welfare dynamics of innovations among agricultural households in Ghana: Implication for poverty reduction

Abstract

To reduce the high incidence of poverty in rural households, agricultural modernization using innovations has been pursued by governments and actors in the agricultural innovation system (AIS). This study analyzed how agricultural innovations and farmer-actor interactions in the AIS contribute to poverty outcomes among agricultural households in Ghana. Data used was the Ghana socio-economic panel survey data with 891 and 2595 observations for cocoa and maize households, respectively. The multinomial endogenous treatment effect model with instrumental variables was employed for the analysis. Adopting digital technologies in combination with other innovations, and having stronger farmer-actor interactions in the innovation system were associated with non-poor outcome in maize-growing households, who were poorer compared to cocoa-growing households. Innovations that consistently increased food security in both crop systems were associated with non-poor outcomes. The findings of the study highlight the need for governments and stakeholders to prioritize agricultural digitalization, encourage the adoption of multiple innovations and focus on food security-improving interventions as strategies to addressing rural poverty reduction.