Drivers for the Adoption of Risk Management Practices by Farmers in Ghana: Critical Inquiry from the Wa East District

Abstract

This study seeks to identify the drivers for the adoption of risk management practices among farmers in the Wa East District. The study adopts both Poisson regression and negative binomial models to identify the determinants of adopting risk management practices. However, a statistical test for over dispersion indicates that the Poisson regression model suites the data best. A semi-structured questionnaire was used to collect data from 200 farm households selected through a multi-stage sampling process. The results revealed that farmers in the Wa East District are characterized by low level of formal education, operating under small scale and lack specialization. Many farm enterprises are kept by a farmer as a way of avoiding production and marketing risk. Farmers were observed to have been practicing many risk management tools with low concentration on financial risk tools. Many variables were hypothesized to have influence on the intensity of adoption but are not found significant. The significant variables include level of education, production capacity and access to services. Therefore, stakeholders interested in marketing agriculture in the Wa East District through promotion should include among their incentives ways of enhancing farmer adoption of risk management practices. Specific concentration should be on provision of credit and extension services to farmers. Farmers with some level of formal education, many farm enterprises and larger farm sizes are adopters of the intensity of risk mitigation measures. Any policy set to promote better farming practices to avoid risk should not fail to include these categories of farmers.

Keywords: Adoption of Risk management practices, Wa East District, Poisson Regression, Negative Binomial Distribution, Farmers