Social networks, rice value chain participation and market performance of smallholder farmers in Ghana

Abstract

This paper examines the impact of rice value chain participation and social networks on smallholder farmers' market performance outcomes (paddy price, quantity of paddy traded, and net returns), using data from a recent survey of 458 smallholder rice farmers in northern Ghana. We employed a treatment effects model to account for potential selection bias associated with observable and unobservable factors. The empirical results reveal that smallholder farmers' participation in a rice value chain is associated with increased paddy price, quantity traded, and net returns. We also find that value chain participation decisions and market performance are positively and significantly influenced by social networks. The empirical results also suggest that sex, farm size, mobile phone ownership, and access to credit significantly increase paddy prices, quantity traded, and net returns of smallholder rice farmers in the value chain.