Market Information and Extent of Agricultural Commercialization: Empirical Evidence from Smallholder Farmers in Effutu Municipality of Ghana

Abstract

Aims: Agricultural commercialization literature has shown that access to market information influences market participation by smallholder farmers. However, documentation on which type of access to market information influences the extent of market participation in the study area is missing. Therefore, this paper analyzed the effect of the different types of access to market information on the extent of agricultural commercialization by using data on smallholder maize farmers in the Effutu Municipality of Ghana. Study Design: The study basically used primary data collected through farmer interviews. A structured questionnaire was used to collect information on demographic characteristics, institutional factors, production, marketing and post-harvest activities. Place and Duration of Study: The study was conducted in 15 communities of Effutu Municipality of Ghana between April and May, 2011. Methodology: The selection of 150 farmers followed a multi-stage systematic random sampling technique. The truncated regression model was used for the analysis. Results: The truncated regression estimate revealed that gender, total number of male adults within the household, education, market information, farm size, access to land and non-farm income significantly explain variation in the extent of agricultural commercialization. Conclusion: The study concluded that the type of access to market information is critical for market decision-making. Access to market information from informal sources, such as farmer association, friends and relatives significantly influence the extent of household agricultural commercialization. It is recommended that agricultural development projects strengthen the delivery system of the informal market information by strengthening farmer based organizations complemented with incentive packages to sustain farmers' interest.