Farmers’ livelihood in rural Ghana: empirical investigation into risk perceptions and attitudes
Loading...
Date
November, 2015
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
Agriculture has and continues to be the backbone of the Ghanaian economy contributing about
21.5% to GDP and employs about 50% of the labour force and contributes substantially to the
foreign exchange earning of the economy. Agriculture in Ghana is dominated by smallholder
farmers who produce substantial amount of the food needs of Ghanaians. Most smallholder farmers
live in the rural areas of Ghana producing a wide range of crops, from cocoa to pepper to cassava
and plantain. Notwithstanding the importance of smallholder farmers’ contribution to the economy
of Ghana, rural households in Ghana are the poorest as poverty is basically a rural phenomenon in
Ghana. These farmers face a wide range of risks that impede their ability to expand and increase
their income and ultimately their welfare. These risks and their attitude towards them have profound
impact on their output and welfare as their perception and attitudes determine their responses to
unfavourable conditions.
The research sought to examine the livelihood of rural farmers in Ghana, their risk perception, risk
attitudes and how risk perceptions and attitudes impact on their economic, and their overall
livelihood.
Primary data were gathered from a sample of 1,200 respondents from a field survey of rural farmers
from three districts in Ghana selected from three different regions; Offinso North District from
Ashanti Region, Techiman Municipality from Brong Ahafo Region and Sefwi Wiawso
Municipality from Western Region. Face-to-face questionnaires were administered to the
respondents to collect the relevant information from the respondents. Five components of
livelihood, Economic, Health, Food, Education and Empowerment were computed. Using the
Equally Likelihood Certainty (ELCE), and with three utility functional forms, and the Arrow-Pratt
risk aversion formula, risk aversion position of the rural farmers were determined. Using ordinary
vii
least squares, multiple regressions were run to examine the associations between livelihood and
socioeconomic characteristics of respondents, risk perception and socioeconomic characteristics and
risk attitudes and socioeconomic characteristics as well as the association between risk perception
and attitudes and livelihood.
The results from the study show that plantation crop farmers are more secured in terms of livelihood
than that of food and vegetable crop farmers. Rural farmers in Ghana located at plantation crop
producing areas, have higher economic and overall security status than others located at other areas.
The results show that plantation crop farmers consider disease and pests and credit availability as
the most important risks that they face whereas food crop farmers perceive yield variability, disease,
and pests as the most important risks. However, vegetable crop farmers perceive output prices and
yield variability as the most important risks conditions.
The work found that livelihood is generally low in the rural areas of Ghana, with differences in
livelihood based on location of the farmers and crop type. Farmers were also found to be risk averse
with the level of aversion changing with location, crop type and the kind of utility function
employed.
The research recommends that government can institute policies like expansion of cocoa
scholarship to other farmers’ wards, irrigation schemes, establishment of small to medium sized
food processing firms for price stabilization to enhance farming in the rural areas to guarantee the
income of farmers and their overall livelihood. It is also recommended that any policies enacted
should take into consideration the differences in the risk perception and the attitudes of farmers to
these risks in order to make the policies work.
Description
Thesis submitted in partial fulfilment for the award of the degree of Doctor of Philosophy in Economics.