Impact of the Bonsaaso millenium villages project in Ghana

Abstract

The Millennium Villages Project (MVP) is an integrated rural development project intended to achieve the millennium development goals in sub-Sahara’s poor farming communities. MVP interventions covered a range of sectors including agriculture. Ghana's first MVP was implemented in Bonsaaso, starting in 2006 and ending in 2015. Neither its financial impact on farm households nor its contribution to the local economy have been assessed. This study estimates the impact of the Bonsaaso MVP's agricultural sector interventions with the aim of making informed comment on its success. Multi-stage sampling was used to select samples of 202 MVP and 97 non-MVP households for analysis. Propensity score matching was applied as a first step to identify significant differences in outcomes between treatment and control groups. A recursive instrumental variable regression model was then developed and estimated to isolate the impacts of the MVP. Participation in the MVP increased the value of a household’s productive assets by GHS 293 per adult equivalent. This, in turn, increased participants’ gross farm output and net farm income. In 2016, participants produced 20% more farm output and earned net farm incomes 15% higher than non-participants. However, these promising results do not account for the cost of the project. At the project level, the MVP’s agricultural interventions yielded a positive financial return of 8%, with a 99% probability of achieving at least a positive return on the cash spent on these interventions. The results support the implementation of MVPs in poor, remote farming areas but the financial benefits of ‘big push’ projects may be much smaller than those generated by more targeted agricultural projects.