MARKET PARTICIPATION INTENSITY EFFECT ON PRODUCTIVITY OF SMALLHOLDER COWPEA FARMERS: EVIDENCE FROM THE NORTHERN REGION OF GHANA

Abstract

This paper explored the effect of market participation intensity on productivity of smallholder cowpea producers in the Northern Region of Ghana. A cross-sectional primary data of 183 cowpea producers was sampled from three communities in each of four selected districts in the region. The Instrumental Variable (IV) regression model using the 2SLS estimator was employed to estimate the causal effect of intensity of market participation on productivity. The results revealed that market participation intensity, measured as the proportion of output sold is endogenous in the cowpea on-farm productivity model. This finding implies that policy measures that lower transaction costs will significantly boost smallholder cowpea productivity by empowering farmers to intensify their participation in the market. Additionally, policies tailored towards increasing farmers' farm size, removing barriers in accessing and cultivation of improved varieties of cowpea seed as well as diversification of agricultural production activities should be promoted. Furthermore, opportunities created to enable these farmers upgrade themselves through the formal educational system will in the long run enable them to raise their on-farm cowpea productivity level through the adoption of productivity enhancing technologies.