Enhancing Agricultural Growth for Smallholders in Ghana

1. Targeting smallholders for agricultural growth in Ghana Jordan Chamberlin 16 November 2007 Accra, Ghana

2. Pro-poor agricultural growth • Ghana’s current development objectives place a great deal of emphasis on broad-based, pro-poor agricultural growth • Emphasis on • expansion of high-value & export-oriented cash crops • improved production of food crops • Transformation of smallholder agriculture Page 2

3. Who are Ghanaian smallholders? • Data on small farms & staple agriculture • Ghana Living Standards Survey 2005/6 • 8687 households • regional & ecological zone inferences • Production data • SRID, Ministry of Agriculture: district data 1992-2006 • Field visits to maize producers (March 2007) Page 3

4. Smallholders dominate agriculture • Two thirds of all farms less than 3 ha • Forest, 3.1 ha avg • Savanna, 4.0 ha avg • Coast, 2.3 ha avg Page 4

5. Smallholder crop portfolios • Number of crops varies with farm size • < 2 ha: average of 3.1 crops • >=5 ha: average of 5.0 crops • Maize & cassava most important in smaller farms • The only crops produced by 12% of households (median holding size 0.8 ha) Page 5

6. median # crops Page 6

7. Smallholders do engage markets • Less variation by holding size • Commercialization rates lowest for smallest farms • fewer marketed crops • less likely to sell the crops they do produce • More variation by geography % of maize farmers who sell their produce Page 7

9. Yields are growing but still low Fertilizer & other input use is driven by geography Anecdotal evidence that fertilizers are freq. used to compensate for land degradation rather than to maximize yields % of farmers using purchased fertilizer

10. Relationship between income and holdings is weak and variable across geographical space Positive in forest/transition Negative in coast Agrees with anecdotal evidence that land is not the chief limitation, but rather access to labor and other resources… Farm size ≠ poverty Per capita consumption & hh landholding Page 10

11. Characterizing smallholders • Holdings are small, but size does not fully explain farmer behavior • Incomes and income sources vary widely • Yields are low; input use is low • Market participation is variable but staple markets are widely engaged in (esp maize) Page 11

12. Characterizing smallholders • Geography is more important than holding size for capturing many smallholder characteristics, including input use and many aspects of market participation • What are the key constraints faced by smallholders and how do the conditions under which they produce modify those constraints? Page 12

13. Constraints faced by smallholders • Production technologies are not accessible • factor market constraints: labor, mechanized traction • Risk of production failure (rainfall variability) • Uncertainty about market opportunities & prices • Poor returns on productivity-related costs Page 13

14. For example, consider these costs along the maize chain from farm gate to Accra retail – equivalent to 80% of producer price for a producer near Techiman High transactions costs & poor access Source: Personal communication from Natural Resources Institute, 2006, as published in World Bank 2007: 119 Page 14

15. Much of the production base and many of the rural poor are located in areas with poor access High transactions costs & poor access Page 15

16. The access story has many overlapping dimensions

17. Rainfall Rainfall variability

19. Targeting smallholders • The challenges faced by different types of farms are heightened by production and market environments • Much production takes place under conditions of high costs, poor information, risk • many smallholders do not perceive benefits of productivity investments Page 19

20. Targeting smallholders • Strengthening food markets (maize) is one of the most important means of engaging the largest portion of smallholders, and thereby increasing productivity and income • Development of more profitable technologies • More efficient and competitive input markets • More efficient output marketing chains • Market information, weights and measures • Risk mitigation • Continue to explore alternatives • e.g. organic production; high-value non-perishables Page 20

22. Smallholders less likely to use some inputs % holders using purchased inputs * relative to average share for producers with smallest holdings Page 22

23. Holding size may not well explain food crop marketing Share of production sold Page 23