Impacts of Out-Grower Schemes, Technology Adoption, and Market Participation on Smallholder Household Welfare in Northern Ghana

Smallholder farmers in developing countries like Ghana face significant challenges, including low productivity, limited access to inputs and markets, and financial constraints, which contribute to persistent poverty and food insecurity. Outgrower schemes have emerged as a viable solution by integrating smallholders into structured value chains, offering them input-based credit, training, and assured markets. This study examines the determinants and impacts of outgrower scheme participation, collective market engagement, in-kind credit access, and market orientation on farm performance and household welfare. Using advanced econometric models—including endogenous treatment effects, multinomial endogenous switching regression, marginal treatment effects (MTE), and ordered probit selection—the study finds that participants in outgrower schemes use more inorganic fertilizer and weedicide and achieve higher maize yields than nonparticipants, with regional variations. Collective participation in both input and output markets significantly enhances commercialization, farm income, and household consumption. Access to in-kind credit improves dietary diversity, reduces poverty and food insecurity, and increasing access through shorter distances encourages more participation. Furthermore, transitioning from subsistence to surplus or commercial market orientations yields better income and food security outcomes. The study underscores the importance of institutional support, public-private partnerships, and targeted policies to facilitate smallholder access to agricultural inputs, output markets, and financial services, thereby promoting inclusive agricultural growth and aligning with Sustainable Development Goals.

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