Abstract
Agriculture remains the bedrock of the Ghanaian economy. Apart from employing about 60% of the total workforce of the country, the sector contributes 30% to GDP. However, agricultural production is largely undertaken by smallholder subsistence farmers who rely solely on highly unpredictable and sporadic seasonal rainfall. Maize, sorghum, and groundnut are the main crops cultivated by most farmers, particularly in northern Ghana. These crops are the principal sources of food and income for farm households. Therefore, variability in prices of the crops at different markets tends to adversely affect the incomes and food security of poor rural farmers. Avoiding such adverse effects, however, requires informed decision making by producers based on good understanding of the trends of supply and demand. Hence, in this study, I applied a spatial equilibrium model in the Upper West Region of Ghana to identify market strategies that influence the marketing and production decisions of farmers and the technology dissemination decisions of agricultural staff. The data used in the study include wholesale and retail crop prices (2002-2007), production/yield figures, and commodity transport costs sourced from District Agricultural Development Units for three markets in the region. Data on the Consumer Price Index was obtained from the Ministry of Finance and Economic Planning of Ghana. In general, the annual average price of maize and sorghum are higher in Wa market than in Tumu or Lawra markets. Comparison of linear and quadratic programming results showed that farmers attain different produce prices (incomes) depending on whether they are price makers or price takers. Farmers in this region are generally risk averse, so they like to ship their produce to different markets. Considering these findings, it is advisable for farmers to form organizations or groups to market their products collectively. In addition, established groups should network to facilitate the exchange of market information.
