Rice farm income diversification in Ghana and implications on household consumption expenditure

Abstract

PurposeThis study investigates implications of crop and income diversifications on consumption expenditure (welfare) of rice-producing households in Ghana. It further compares diversification by three rice production systems: two-season rain-fed, two-season irrigated and one-season rain-fed rice production.Design/methodology/approachPrimary data were sourced from 225 rice farmers. Margalef index and three-stage least-squares were employed.FindingsMajority of rice-farming households in Ghana diversify livelihoods. The extent of livelihood diversification differs among two-season rain-fed, two-season irrigated and one-season rain-fed rice-producing households. Credit, distance to district capitals, production purpose and number of farming seasons influence crop and income diversifications, and consumption expenditure of rice-producing households. While crop diversification reduces consumption expenditure, income diversification increases it. Crop and income diversifications positively influence each other. Consumption expenditure reduces crop diversification but increases income diversification.Practical implicationsPolicy should be directed towards the promotion of more livelihood activities to boost rice farmers' welfare. There should be awareness creation and training programmes to enable rice farmers realize different economic activities within and outside the agricultural value chain.Originality/valueCrop and income diversifications were measured as continuous response variables, unlike previous studies that used a binary response variable. The authors established a synergy among crop and income diversifications, and consumption expenditure (welfare). The authors further compared crop and income diversifications by three rice production systems: two-season rain-fed, two-season irrigated and one-season rain-fed rice production systems.