Off-Farm Participation And Farm Households’ Vulnerability To Food Insecurity In Ghana Otoo Emmanuel

Abstract

Food insecurity and poverty remain severe and predominant in farming areas in Ghana, and the situation is on the upswing as the population grows at a faster rate (GSS, 2018). In order to improve their wellbeing, farm households are increasingly falling on off-farm activities as an alternative source of livelihood. Yet many government poverty reduction interventions have concentrated mainly on-farm production, ignoring off-farm economic activities. Moreover, empirical studies are presenting conflicting findings on whether off-farm participation practically improves welfare. Thus making it unclear whether off-farm need to be captured in policies and intervention and also whether the policies are to encourage or discourage off-farm participation. Using the Ghana Living Standard Survey (6th round) data for the whole country, and endogenous switching model coupled with Full information likelihood estimator, this study presents a more concrete result correcting for the shortcomings in previous studies such as endogeneity and skewed sample (northern region of Ghana). It further improves on the few studies done before this by including a variable capturing expenditure on non-substitutable market goods such as utility, education, health and housing. The study found that expenditure on health, education and utility significantly increase the chances of farm households engaging in off-farm work. In terms of the effect of working outside the farm on the susceptibility to being food insecure, the study revealed that whether off-farm participation would reduce or increase vulnerability to food insecurity of the farm household, depends on whether the farm household has a comparative advantage on the farm only or both farm and off-farm. This study, therefore, concludes that off-farm economic activities are worth being considered in poverty reduction policies. However, the direction in which the policies are to take must be dependent on the comparative advantage of the farm household in terms of working only on the farm or both given their skills, education and opportunities available. Keywords: Off-Farm Participation, Vulnerability, Food insecurity, Welfare, Farm Households, Endogeneity