A Probit Analysis of the Determinants of Fertilizer Adoption by Cocoa Farmers in Ghana

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1 Asan Journal of Agrcultural Extenson, Economcs & Socology 8(1): 1-8, 2016; Artcle no.ajaees ISSN: SCIENCEDOMAIN nternatonal A Probt Analyss of the Determnants of Fertlzer Adopton by Cocoa Farmers n Ghana Benjamn Tetteh Anang 1* 1 Department of Agrcultural and Resource Economcs, Faculty of Agrbusness and Communcaton Scences, Unversty for Development Studes, Tamale, Ghana. Author s contrbuton The sole author desgned, analyzed, nterpreted and prepared the manuscrpt. Artcle Informaton DOI: /AJAEES/2016/21540 Edtor(s): (1) Anthony N. Rezts, Department Busness Admnstraton of Food and Agrcultural Products, Unversty of Western, Greece. Revewers: (1) Aknnagbe Oluwole Matthew, Federal Unversty of Technology, Akure, Ngera. (2) Ir. Effendy, Tadulako Unversty, Indonesa. Complete Peer revew Hstory: Orgnal Research Artcle Receved 21 st August 2015 Accepted 19 th September 2015 Publshed 19 th October 2015 ABSTRACT Cocoa remans an mportant cash crop n Ghana and plays a major role n the country s socoeconomc development. The crop s the manstay of many smallholder households and ths has led to several efforts to enhance ts producton. The ntroducton of partal lberalsaton has encouraged prvate sector actvty n the Ghanaan cocoa sector, ncludng the prvatsaton of nput supply. A key strategy amed at mprovng cocoa producton s the adopton of norganc fertlzer. The current study sought to determne the factors nfluencng farmers decson to adopt fertlzer n cocoa producton, usng cross-sectonal data from 80 randomly selected farmers n the Bban-Anhwaso- Bekwa Dstrct of Ghana. The study revealed that ncome from cocoa producton ncreases the probablty of fertlzer adopton whle farm sze and the age of the household head decrease the probablty of adopton. Based on the fndngs, t s recommended that fertlzer for cocoa producton should be subsdsed by the government to promote adopton. In addton, extenson servce delvery must be enhanced to ensure that farmers get nformaton on mproved producton practces. Keywords: Adopton; cocoa producton; Ghana; norganc fertlzer. *Correspondng author: E-mal: benjamn.anang@uds.edu.gh;

2 1. INTRODUCTION Cocoa producton plays a major role n Ghana s economy. The country has a long hstory of cocoa producton and was once the world s leadng producer. Currently, Ghana ranks second to Cote d Ivore as the global leadng producer [1,2]. Several challenges ncludng low prces, agng farmers, pests and dseases, competton wth food crop producton and bush fres n the early 1990s, led to a gradual declne n the producton of the naton s most mportant agrcultural crop. There have been efforts by the Government of Ghana to resusctate the cocoa sector by mprovng the prce pad to farmers, provdng agrochemcals and free sprayng of cocoa farms to reduce the ncdence of pests and dseases responsble for crop falure and low yeld. The Cocoa Research Insttute s also mplementng strateges to help cocoa farmers ncrease ther yelds. These nclude the ntroducton of hgh-yeldng varetes and tranng of farmers on modern producton practces. Besdes these efforts, there s also the promoton of cocoa fertlzers to enhance farmers output. The adopton of fertlzer n cocoa producton by farmers n Ghana s a postve development that has the potental to mprove output [3]. At the same tme, the ntroducton of fertlzers has the tendency to reduce the organc nature of the country s cocoa that may affect the premum Ghana enjoys on her cocoa on the nternatonal market. There are several studes on agrcultural technology adopton n developng countres. [4, 5] carred out detaled survey of agrcultural technology adopton n developng countres and found that farm sze, rsk, human captal, avalablty of labour, access to credt and land tenure systems were the most mportant factors nfluencng farmers technology adopton decsons. [6] nvestgated how rsk atttudes affect fertlzer adopton and rate of applcaton n Cote d Ivore. The author found that farmers rsk perceptons and rsk averson are strong determnants of fertlzer adopton and ntensty use decsons. Other varables such as educaton, membershp of assocaton, farmers lqudty, farm sze, hred labor, sol fertlty and access to credt were sgnfcant factors explanng farmers decsons. [7] summarsed adopton studes by the Centro Internatonal de Mejorameto de Maz Y Trgo (CIMMYT) n sx countres namely Kenya, Tunsa, Colomba, El-Salvador, Mexco, and Turkey. The study concluded that the followng factors accounted for the dfferences n adopton rates n the sx countres: Dfferences n nformaton acqured, agro-clmatc and physcal envronments, avalablty of nputs, dfferences n market opportuntes for the crops, dfferences n farm sze as well as the rsk averson characterstcs of farmers. Accordng to several research reports, the adopton of the cocoa producton technologes recommended to farmers by the Cocoa Research Insttute of Ghana (CRIG) has been low, resultng n low yelds [3,8,9,10,11]. Reasons for the low adopton nclude lack of fnancal resources and labour, techncal dffcultes [10] and hgh cost of technologes [12]. There are several studes on the adopton of cocoa technologes n Ghana. The objectve of the current paper s to determne the factors nfluencng the adopton of norganc fertlzer by cocoa farmers n Ghana. 2. METHODOLOGY The followng secton s a presentaton of the methods used, a descrpton of the study area, the data, as well as the emprcal model for the study. 2.1 Study Area and Data The study was conducted n the Bban- Anhwaso-Bekwa Dstrct n the Western Regon of Ghana. The dstrct s a major cocoa producng area n the country and s located n the forest belt. The area experences an average annual ranfall between 1200 mm and 1500 mm. The ranfall dstrbuton s bmodal. The agro-clmatc condton of the area s sutable for the growng of mportant crops lke cocoa, rubber, maze, cassava, plantan and cocoyam. Eghty randomly selected cocoa farmers located n four communtes n the Bban-Anhwaso-Bekwa Dstrct took part n the study. The communtes ncluded Bekwa, Baakokrom, Asham and Humjbre. Twenty farmers were then selected from each communty usng random samplng. Farmer ntervews took place wth the ad of sem-structured questonnares. Demographc, socoeconomc and producton data were solcted from the respondents. To acheve the research objectve, the study solcted from farmers whether they use norganc fertlzer n 2

3 cocoa producton. The queston requred a yes or no response. Out of the 80 respondents, 78 provded complete nformaton and these were used n the fnal analyss. 2.2 Analytcal Framework and Emprcal Model The current study used the probt model to analyse adopton decsons of farmers due to the bnary nature of the dependent varable. The probt model makes the assumpton that whle only the values of 0 and 1 for the dependent varable Y are observed, there s a latent, unobserved contnuous varable Y * that determnes the value of Y [13]. The probt model ensures that the estmated probabltes le between 0 and 1. Suppose the response varable Y s bnary wth only two possble outcomes (1 for adopton and 0 for non-adopton). Consder also a vector of ndependent varables x whch s assumed to nfluence Y. Then the probt model takes the form: Pr( Y = 1 x ) = F( β ' x ) = Φ ( β ' x ) (1) Where Pr denotes probablty, Y s the bnary choce varable representng adopton and Φ s the cumulatve dstrbuton functon (CDF) of the standard normal dstrbuton. β s a vector of unknown parameters. It s assumed that the latent varable Y* can be specfed as follows: And N = β0 + βn n + n= 1 Y x u (2) * 1 f Y > 0 Y = 0 otherwse (3) where x represents a vector of explanatory varables, u s a random dsturbance term, N s the total sample sze, and β s a vector of unknown parameters to be estmated by the method of maxmum lkelhood. Due to the non-lnearty of the probt model, the parameters are not necessarly the margnal effects of the varous ndependent varables. The margnal effects of the coeffcents are more nformatve and useful for polcy decson-makng. To estmate the margnal effect, we dfferentate equaton (1) wth respect to x [14]: Y x = φ ( β ' x ) β (4) where ϕ represents the probablty densty functon of the standard normal dstrbuton. The emprcal specfcaton of the probt model for the study s gven as follows: 6 y = β + β x + v 0 n n n= 1 (5) where Y = adopton of fertlzer (=1 f farmer adopted fertlzer, 0 otherwse); x 1 =age; x 2 = household sze; x 3 = farm sze; x 4 = extenson contact; x 5 = farm ncome; x 6 = access to the cocoa prayng programme (=1 f farmer partcpated, 0 otherwse). The choce of varables n the model was based on ntuton and lterature [6,11,15-22]. The defnton and expected sgns of the varables used n the probt model are gven n Table 1. Table 1. Descrpton of varables used n the model Varable Descrpton Expected sgn Adopton Adopton of fertlzer of fertlzer Age Age of farmer n +/- years Access to Dummy: 1 f farmer +/- mass sprayng partcpated; 0 otherwse Farm sze Farm sze n acres +/- Farm Farm ncome n + ncome Extenson contact Household sze Ghana Ceds Number of extenson vsts per annum Total number of household members There s no consensus among researchers regardng the sgn of many of the varables nfluencng adopton decson as fndngs reported by many research scentsts often dffer

4 Whle the reason for the varatons may or may not be due to methodologcal dfferences, t s mportant to state that snce the soco-cultural and economc settngs of farmers vary, emprcal results across dfferent geographcal regons are lkely to show some varatons. Age s an mportant varable whch nfluences most household and farm decsons and s wdely used as a varable n adopton studes. It has been shown that young people are more lkely to take rsks assocated wth nnovaton, hence more lkely to be adopters [23,24]. However, [25] obtaned a postve assocaton between age and fertlzer adopton by cocoa farmers n Ghana. Hence the sgn of the varable n ths study s consdered to be ndetermnate. Access to the mass cocoa sprayng exercse s expected to nfluence the decson to adopt fertlzer ether postvely or negatvely. Farmers who had ther farms sprayed are expected to obtan hgher yelds due to the control of pests and dseases. Such farmers may be motvated to adopt fertlzer to further enhance ther producton. On the other hand, other farmers may consder the sprayng exercse enough to guarantee them a good yeld, especally when cash s a lmtng constrant. Hence the nfluence of the varable s ndetermnate. It has been shown that the cultvated area has a postve nfluence on farmers adopton of chemcal nputs [26-28]. Accordng to [29], the postve nfluence of farm sze on adopton may be attrbuted to economes of scale effects or the ablty to bear the rsks assocated wth adopton of new technology. However, as shown by [6], farm sze decreases the adopton of fertlzer by farmers. The nfluence or sgn of farm sze s therefore ndetermnate. Farm ncome s hypothessed to have a postve nfluence on adopton. Ths s because an ncrease n farm ncome s expected to ncrease farmers ablty to pay for the cost of agrochemcal nputs. Extenson contact s also expected to have a postve nfluence on adopton snce t enhances farmers knowledge of technology. Farmers who possess knowledge about an nnovaton are more lkely to adopt the nnovaton than those wthout adequate knowledge. Household sze s expected to have a negatve nfluence on adopton. Ths s due to the mportant role famly labour plays n rural households farmng actvtes. An ncrease n household sze s lkely to ncrease the household labour supply. Excess labour can then be substtuted for agrochemcal nput, ncludng fertlzer. 3. RESULTS AND DISCUSSION The followng secton s a presentaton of the results of the study and dscusson of the man fndngs. The descrpton of the characterstcs of the respondents s followed by a presentaton of the results of the probt analyss and the dscusson of the major fndngs. 3.1 Characterstcs of the Respondents A bref descrpton of the characterstcs of the respondents s presented n Table 2. About twothrds of the respondents adopted cocoa fertlzer and were able to access fnance for producton. Close to 70 percent of the respondents partcpated n the cocoa mass sprayng exercse whle 40 percent had access to extenson servce. Notwthstandng the fact that these servces are free of charge to farmers, the study shows that not all farmers are able to partcpate. The average farm sze was 7.8 acres, whch shows that the respondents are smallholder farmers. The average age of respondents was 48 years whle the average household sze and average ncome was 10 members and 1937 Ghana Ceds respectvely. A comparatve analyss of the man characterstcs of the respondents shows that Table 2. Descrptve statstcs of respondents Varable Mean Std. Dev. Mnmum Maxmum Farm sze Farm ncome Extenson contact Age Household sze

5 adopters had sgnfcantly hgher farm ncome but were sgnfcantly younger than non-adopters. These varables are therefore lkely to nfluence adopton of fertlzer by respondents. Adopters also had larger farm sze than non-adopters. However, the mean dfference was not sgnfcant. Adopters however had less contact wth extenson agents and smaller household sze wth nsgnfcant mean dfference. Table 3. Descrptve statstcs of the respondents accordng to adopton status Varable Adopters (N = 48) Nonadopters (N = 30) t-test Farm sze Farm *** ncome Extenson contact Age ** Household sze *** and ** mean sgnfcant at 1% and 5% respectvely 3.2 Determnants of Fertlzer Adopton Table 4 s a presentaton of the maxmum lkelhood estmates of the parameters of the probt analyss of fertlzer adopton by cocoa producers n Ghana. The dagnostc statstcs reveal a good ft of the model, as ndcated by the hghly sgnfcant Ch-square test statstc and the percentage of the varables correctly classfed. The result shows that the explanatory varables ncluded n the model are relevant and jontly explan the adopton decson of farmers. The results show that the sgnfcant factors that affect fertlzer adopton decson of farmers are farmers age, farm sze and farm ncome. Household sze, extenson contact, access to fnance and access to the mass sprayng exercse were however nsgnfcant n explanng adopton of fertlzer by cocoa farmers. The age of respondents was negatvely related to adopton and sgnfcant at the 5 percent level. The result ndcates that an ncrease n age of the farmer decreases the probablty of fertlzer adopton n cocoa producton. A unt ncrease n age decreases the probablty of fertlzer adopton by Age s a proxy for farmng experence, whch means that experenced farmers are less lkely to adopt fertlzer n cocoa producton compared to relatvely nexperenced farmers. The result s at varance wth [25] who reported a postvely sgnfcant nfluence of age on fertlzer adopton by Ghanaan cocoa farmers. Furthermore, [6] found a postve but nsgnfcant relatonshp between age and fertlzer adopton by cocoa farmers n Cote d Ivore. The mplcaton of the research fndng s that older farmers are less lkely to adopt fertlzer applcaton whch may be attrbuted to ther famlarty wth farmng and a relance on ther personal knowledge or experence n farmng. As farmers grow older, they accumulate knowledge of farmng and may rely on ths at the expense of new knowledge from research. Furthermore, older farmers may have more fnancal oblgatons as they are more lkely to take care of larger households, a stuaton whch can adversely affect ther adopton decsons. Farm sze had a negatve relatonshp wth adopton of fertlzer and was sgnfcant at the 10 percent level. The result mples that an ncrease n farm sze decreases the probablty of adoptng fertlzer n the producton of cocoa. A unt ncrease n farm sze leads to a decrease n the probablty of adoptng fertlzer. The result mples that farmers wth smaller farms are more lkely to adopt fertlzer n cocoa producton n Ghana. The result s consstent wth the fndng of [6] who reported a negatvely sgnfcant relatonshp between farm sze and fertlzer adopton n Cote d Ivore. It can be deduced that as farms become larger, the hgh cost of applyng fertlzer on the entre farm tends to nhbt farmers from adoptng fertlzer applcaton. Furthermore, farmers wth large farm holdngs who lack the ablty to purchase chemcal fertlzers may stll expect to obtan some output by vrtue of ther large acreage f they manage to mantan basc agronomc practces. Farm ncome exhbted a postve and hghly sgnfcant relatonshp wth adopton of cocoa fertlzer, mplyng that as farm ncome ncreases, so does the probablty of adopton of fertlzer by farmers. A unt ncrease n farm ncome ncreases the probablty of adopton of fertlzer by It s reported by the World Bank that cocoa producton n Ghana s a major source of ncome to over 800,000 farmers and many others engaged n trade, transportaton and processng of cocoa [30]. Snce cocoa producton s the manstay of smallholder producers, t s the expectaton that an ncrease n farm ncome wll enhance the adopton of fertlzer and other productvty-enhancng technologes. 5

6 Table 4. Probt model of adopton Varable Coeffcent Std. error P> z Margnal effect Age ** Household sze Farm sze * Extenson contact Farm ncome *** Access to mass sprayng Constant * - ***, ** and * stand for statstcal sgnfcance at the 1%, 5% and 10% level, respectvely. Log lkelhood = -36.3; Wald ch2 (6) = 31.4; Prob > ch2 = 0.00; Pseudo R2 = CONCLUSION The study employed a probt model to analyse the determnants of fertlzer adopton by Ghanaan cocoa farmers. The study revealed that farmers age, farm sze and farm ncome were the crtcal determnants of adopton. The mplcatons of the fndngs are that younger farmers are more lkely to embrace technologcal change n cocoa producton and efforts to encourage them to ncrease producton can mprove Ghana s cocoa output level. Furthermore, farmers wth larger farms were less lkely of adopt fertlzer, whch could be attrbuted to the hgh cost nvolved n applyng fertlzer on a large farm, compared to a small farm. Ths shows that farmers wth very low ncomes are lkely to be non-adopters. Ths pont s buttressed by the hgh sgnfcance of the ncome varable n the model. Farmers are thus more lkely to adopt fertlzer when ther ncome ncreases. Efforts to enhance the productvty and ncome of cocoa farmers wll therefore enhance the adopton of fertlzer whch n turn has the potental to spur productvty growth. Based on the fndngs, the study recommends that fertlzer for cocoa producton should be subsdsed by the government to promote adopton. In addton, extenson servce delvery must be mproved to ensure that farmers get nformaton on mproved producton practces. The negatve and nsgnfcant value of the extenson varable depcts the weak extenson programme n the study area. COMPETING INTERESTS Author has declared that no competng nterests exst. REFERENCES 1. Vgner M. Drvers of cocoa producton growth n Ghana. ODI Project Brefng No 4; Vgner M, Santos P. Ghana and the cocoa marketng dlemma: What has lberalzaton wthout prce competton acheved? ODI Project Brefng, No 3; Anean F, Anchrnah VM, Asamoah M, Owusu-Ansah F. Analyss of Economc Effcency n Cocoa Producton n Ghana, Afrcan Journal of Food, Agrculture, Nutrton Development. 2011;11(1): Feder G, Just RE, Zlberman D. Adopton of agrcultural nnovatons n developng countres: A survey. Economc Development and Cultural Change. 1985;33: Feder G, Umal D. The adopton of agrcultural nnovatons: A revew. Technologcal Forecastng and Socal Change. 1993;43: Ben-Houassa KE. Adopton and levels of demand of fertlzer n cocoa farmng n côte d vore: Does Rsk Averson Matters? Paper selected for presentaton at the CSAE Conference - Economc Development n Afrca - Held at St Catherne s College, Oxford. 2011; Perrn R, Wnkelmann D. Impedments to technologcal progress on small versus large farms. Amercan Journal of Agrcultural Economcs. 1976;58: Henderson CP, Jones AP. Analyss of constrants to the adopton of CRIG recommendatons n Offnso Dstrcts: Results and dscusson. CRIG Farmng systems unt research paper no. 1. Cocoa 6

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8 western Ngera. Agrcultural Systems. 1991;36: CIMMYT (Internatonal Maze and Wheat Improvement Centre). The adopton of agrcultural technology: A gude for survey desgn. Economcs program, CIMMYT, Mexco; World Bank. Supply chan rsk assessment: Cocoa n Ghana. Ghana Cocoa SCRA Report; Anang; Ths s an Open Access artcle dstrbuted under the terms of the Creatve Commons Attrbuton Lcense ( whch permts unrestrcted use, dstrbuton, and reproducton n any medum, provded the orgnal work s properly cted. Peer-revew hstory: The peer revew hstory for ths paper can be accessed here: 8