Participation and output effect of a Block Farm Credit Programme in selected districts of Northern Ghana

Abstract

Purpose

The purpose of this paper is to examine the effect of the Ministry of Food and Agriculture (MoFA) Block Farm Credit Programme (BFCP) participation on crop output in four districts in the Northern region of Ghana.

Design/methodology/approach

Structured questionnaires were used to collect data from 240 beneficiary and non-beneficiary farmers of BFCP. The treatment effect model that accounts for selectivity bias was employed to examine the socioeconomic determinants of farmers’ decision to participate in the BFCP and the effect of BFCP participation on crop output.

Findings

Even though the BFCP participation increases output, inadequacy and late delivery of BFCP inputs, low publicity about the programme and difficulty in accessing the inputs from the districts agricultural officers are factors that prevent the full realization of the benefits of the programme. Improving extension services to create more awareness and a re-introduction of the BFCP to make inputs available and affordable to farmers can help boost farm productivity.

Practical implications

The positive effect of the BFCP means that the provision of low-cost production credit has the potential to increase productivity and improve incomes. Hence, MoFA should endeavour up scaling and properly managing the scheme.

Originality/value

This study is the first to evaluate the BFCP in Northern region of Ghana, particularly in relation to its contribution to crop value. The findings are very useful to advise policy by taking account of the programme deficiencies and enhance effectiveness.

Citation

Donkoh, S.A., Eliasu, A., Setsoafia, E.D. and Ansah, I.G.K. (2016), "Participation and output effect of a Block Farm Credit Programme in selected districts of Northern Ghana", Agricultural Finance Review, Vol. 76 No. 3, pp. 348-361. https://doi.org/10.1108/AFR-01-2016-0005