Are non‑market benefits of soybean production significant? An extended economic analysis of smallholder soybean farming in Upper West region of northern Ghana
Loading...
Date
2020
Journal Title
Journal ISSN
Volume Title
Publisher
Agriculture & Food Security
Abstract
Background: Traditional cost–benefit analysis of soybean production tends to largely focus on financial benefits
to farmers, and less so on non-market co-benefits in sustaining smallholder farming systems. Relying solely on the
standard financial analysis undermines the actual benefit of soybean production, which often results in ineffectual
policy designs. An economic analysis that incorporates key non-pecuniary co-benefits of soybean production provide
vital insight that contributes to improving productivity and overall economic well-being of farmers. Cross-sectional
data were collected from 271 farmers to estimate the overall economic benefit of soybean that captures both market
and non-market attributes in three major producing districts (Sissala-West, Wa-East, and Dafiama-Busie-Issa (DBI)) of
Ghana.
Results: When non-market co-benefits were omitted, soybean production was not profitable (−Gh¢103.10/ha or
−US$22.91) in DBI while Sissala-West and Wa-East had modest profit margins. However, the financial analysis changed
dramatically when an average non-market value of Gh¢345.69 (US$76.82) was incorporated in the analysis. The
soybean system was, therefore, financially viable for all the districts when the non-market attributes of the crop were
considered.
Conclusions: The findings demonstrate the importance of the non-pecuniary benefits of soybean in smallholder
farming systems for policy decision-making. For instance, farmers’ motivation for soybean production is closely linked
to those ancillary benefits like the biological nitrogen fixed in the soil for cultivation of other crops. Similarly, crop
administrators and policy makers’ support for conservation agriculture and green environment is tied to these nonmarket
co-benefits.
Description
This article is published in Agriculture & Food Security and also available at https://doi.org/10.1186/s40066-020-00265-7
Keywords
Soybean, Non-market benefits, Economic analysis, Food security, Smallholder farming systems, sustainability
Citation
Agriculture & Food Security