Effect Of Input Credit Scheme On Productivity Of Smallholder Cocoa Farmers In The Amenfi West And Prestea-Huni Valley Districts Of The Western Region: A Case Study Opportunity International

ABSTRACT

Opportunity International, a private financial institution has made efforts to support cocoa farmers in Ghana through the establishment of input credit scheme with the aim of enhancing access to inputs to improve productivity of farmers. The primary objective of the study is to determine whether access to inputs improves productivity of smallholder cocoa farmers in the stated districts of the Western Region of Ghana. Purposive sampling was used to select two districts from the region, as well as the communities of interest within the selected districts. Three communities in the Amenfi West and two communities in the Prestea-Huni Valley districts were selected due to the level of participation of farmers in the scheme. A total of 88 participants and 169 non-participants across the communities were selected randomly for the study from the five communities. Factors influencing farmers‟ participation in the scheme were assessed using a Probit regression model. The PSM method was used to determine the effect of access to credit on productivity of smallholder cocoa farmers. A three-point likert scale was used to identify the severity of constraints faced by participant and non-participant farmers and constraints ranked based on weighted means. Results from the Probit regression indicated farm size, awareness of financial institution, membership of FBO, access to extension agent, location of farmer, timeliness of input supplied, adequacy of loan amount and age as significant factors that influenced participation in the scheme in the study area. Estimation from the PSM revealed the intervention has a positive and significant effect on productivity of participant farmers with participation in the intervention increasing the outputs of participants by 449.9kg/ha compared to non-participants. The fertilizer and agrochemical use were also increased by 84.31kg/ha and 9.95litres/ha, respectively. Respondents identified common constraints faced with the most pressing including poor producer prices and unfavourable weather conditions. It was concluded that the intervention improved the output, fertilizer use and agrochemical use of participant farmers. The study recommends, among others that government provides incentives to help support private credit schemes for cocoa production.