An Economic Assessment of the Factors That Influence Smallholder Farmer Participation in Export Markets as a Case of High Value Mango Markets in Southern Ghana

Abstract

Market participation is critical to the development of smallholder agricultural production because it stimulates increased productivity and enhances poverty alleviation. The levels of access to and participation in high value markets by smallholder mango farmers in Southern Ghana are low. It is not clear what factors influence participation and the level of participation in high value mango markets by smallholder mango farmers in Ghana. Knowledge on these factors would be important when devising and formulating appropriate measures to enhance participation by Ghana’s smallholder mango farmers in high value markets. This study analyzed the factors that influence participation and the level of participation of Ghana’s smallholder mango farmers in export markets as a case of high value mango markets. The study characterized the mango marketing system in Southern Ghana using descriptive statistics. A triple hurdle model was used in the study to capture a 3-step decision-making process in which a binary probit model was used to assess the factors influencing access to and participation in either low or high value markets in the first stage. In the second stage, a binary probit model was used to assess the factors that influence the choice of a high value market (domestic or export high value market). A tobit model was employed in the final stage to determine the level of market participation in terms of how much is to be sold in the export market. The study was undertaken in Southern Ghana. In this region, the Shai Osudoku, Yilo Krobo and Manya Krobo districts were purposively selected because of their high level of mango production. The multistage sampling technique was used to select 224 mango farmers. Data were collected using a pre-tested semi-structured questionnaire and were captured in SPSS (version 21) software and analyzed with STATA 15. The results from the estimation of the triple-hurdle model showed that participation in high value mango markets was influenced by education, household income, farming experience, ownership of a motorized transport (tricycle), ownership of a radio, trust, x distance to nearest tarmacked road, certification and access to credit. The level of participation in mango export markets as a case of high value markets was determined by household size, household income, farming experience and access to credit. Based on the study findings, it is recommended that institutional support including certification and credit should be provided to smallholder mango farmers. This institutional support should be coupled with practical-based education and training to ensure that the farmers meet the stringent requirements of high value markets and, consequently, increase their participation and the level of participation in high value markets. Also, to ease mango farmers’ access to and participation in high value markets, rural infrastructural development should be geared towards improving road networks to mango farms. Further, to ensure market efficiency and enhance smallholder farmer participation in competitive markets, the study recommends the reduction of transaction costs through the provision of equipment, such as motorized transport (tricycles) and radio; and the encouragement of transparency between trading partners to enhance trust between them.