Socio-economic analysis of small ruminant livestock production in Northern Ghana

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May 2015
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The purpose of this study was to understand the socio-economics dimension of small ruminant livestock production and generate technical information appropriate for policy action on increasing small ruminant production in northern Ghana. Data was collected using a multi-stage sampling procedure, from a sample of 300 households, during the months of October to December, 2012. The study was sub-divided into four different empirical analyses. A first component of the analysis was based on categorical data models (Negative Binomial, Multinomial and binary logit) to assess socio-economic determinants of small ruminant production system. The result indicates that non-farm income (socio-economic attributes), age and household size (demographic factors), and extension support (institutional variables) are significant determinants of small ruminant production (Negative Binomial model). The results from multinomial logit also suggest that agro-ecological zone, risk attitude and income associated with small ruminant production are significant determinants of the likelihood that households will own and manage particular small ruminant species (i.e., sheep or goat). A second component of the empirical analysis employs replacement cost method (aggregate economic value) to estimate the total benefit of traditional free range system of small ruminant livestock. The analysis suggests that the annual aggregate benefit from sheep products was about Gh₵590 (US$311) per household in Northern region, Gh₵517.23 (US$272.2) in Upper East region and Gh₵209 (U$110) in Upper West region. Over 51%, 80%, and 90% of the benefit in Northern, Upper East and Upper West regions, respectively were non-marketable (non-cash). Similarly, more than 60% of the aggregate benefit of Gh₵274.5 (US$144.7) from goat production in the Northern region was also non-marketable. In addition, the study shows that the non-market component of goat products represent 99% in Upper East region of the aggregate value of Gh₵205.5, that is, US$108.2. For Upper West region, the non-market co-benefit was 128% (132.14, representing US$69.5) because the return on the market components was negative. Therefore, the traditional free range system of producing sheep and goat is only economically viable when non-market functions (and associated values) of the animals are considered. In an analysis of gender contributions to production, a Cobb-Douglas production function reveals that the productivity of sheep and goat managed by adult male farmers was influenced by a set of different socio-economic (household size and age) and institutional factors (extension access), compared with productivity associated with female-managed farms. On the other hand, Socioeconomic factors including age, marital status, and non-farm income, and institutional factors such as extension access have a significant influence on productivity of female small ruminant managers. Important constraints that limit small ruminant production among the sample of farmers studied include diseases and parasitic infection, theft, destructive habits of animals, and feed shortage. The odds of a farmer experiencing diseases and parasites infection and feed shortage constraints were significant for extension, age of respondents, production system, non-farm income source as well as herd size holdings of the farmer (ordinal logit model). The study confirms the importance of small ruminants as a livelihood savings mechanism in smallholder households. The aggregate economic value does not only demonstrate the importance of non-market functions of sheep and goat toward sustaining food security and poverty reduction in smallholder households, but also provides a practical proposal for any livestock related policies for farmers who depend on traditional livestock production system. In devising strategies (to choose households) to improve traditional small ruminant production, livestock technical programs must recognise important socioeconomic characteristics of the farm households.
A thesis submitted to The School of Graduate Studies, Kwame Nkrumah University of Science & Technology, Kumasi-Ghana in fulfillment of the requirements for the degree of Doctor of Philosophy,