Do farmer groups impact on farm yield and efficiency of smallholder farmers? Evidence from rice farmers in northern Ghana

Abstract

Multiple production and marketing challenges facing smallholder farmers in developing countries have resulted in renewed interests of governments, donor agencies and private agribusiness companies in forming farmer groups to help address these challenges. Using recent survey data of 412 smallholder rice farmers from northern Ghana, we examine the role of farmer groups in improving yield and technical efficiency. Due to self-selection into farmer groups, we use a sample selection stochastic production frontier model to account for potential selection bias arising from observed and unobserved attributes. The empirical results reveal that participation in farmer groups is associated with increased yield and technical efficiency, relative to farmers who produce and market rice individually. Moreover, the yield and efficiency gaps between group members and nonmembers increase significantly when selection bias is taken into account in the analysis.