Factors influencing GlobalGAP adoption and its impact on income and production costs of small-scale pineapple farmers in Ghana : A thesis submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy at Lincoln University

Abstract

The adoption of Global Good Agricultural Practices (GlobalGAP) improves food quality and safety along fresh produce value chains, but adoption rates have been low among small-scale pineapple farmers in Ghana. Low adoption rates have contributed to a fall in smallholder participation in export-oriented production and declining export performance. While policymakers and other industry stakeholders have tried to find ways to improve GlobalGAP adoption in Ghana, little is known about the determinants and impacts. Consequently, stakeholders do not know which smallholders are most likely to respond positively to interventions aimed at promoting adoption. Moreover, previous studies have identified significant increases in smallholder production costs associated with GlobalGAP compliance. However, there is limited information on how specific inputs used by GlobalGAP certified farmers increase production costs. Such information would help policymakers to target interventions at the most important drivers of quality-enhancing compliance costs. Furthermore, it would make adoption more affordable to farmers and less expensive for taxpayers who fund these interventions. In the first instance, this study set out to measure the impact of GlobalGAP adoption on the net incomes of smaller and larger small-scale pineapple farmers, recognising that compliance incurs significant fixed costs, and that fixed costs pose a greater obstacle to adoption on smaller farms. Small-scale farmers were defined as those operating farms no larger than five hectares. The study used probit and two-stage regression models to estimate the impact of GlobalGAP adoption on net income. These techniques were applied to a representative sample of 546 small-scale pineapple farmers located in Ghana’s two leading export production districts. Of these 546 farmers, 236 were GlobalGAP adopters; the remaining 310 were non-adopters. The probit model showed that the probability of adoption was higher for households that had larger land endowments, were members of an agricultural cooperative, engaged with extension services, and had female heads. The regression models showed that GlobalGAP adoption reduced net income on farms producing less than one hectare of pineapples, but increased net income on farms growing more than one hectare of pineapples. The study thus recommends that extension and other interventions intended to promote GlobalGAP adoption amongst pineapple farmers in Ghana should be targeted at those able and willing to grow more than one hectare of pineapples. Second, this study used a quality-adjusted transcendental logarithmic (translog) cost function to identify the main contributors to production costs in the sub-sample of 236 GlobalGAP adopters. The results showed that production cost is most sensitive to changes in the plantlet price, followed by wages, agrochemical prices, and expenditure on capital items. Smaller small-scale farmers are much more sensitive to increases in capital expenditure than are larger small-scale farmers. Post-estimation analysis showed that improvements in product quality increased production costs at an increasing rate. Key policy recommendations include joint ventures to increase nursery capacity and competition in the market for plantlets, scrutiny of mandatory fees impacting the cost of imported labour-saving inputs, facilitating sharing arrangements between smallholders to lower the cost of on-farm infrastructure, and research to identify constraints preventing certified farmers from exploiting size economies.