Nonfarm Activities and Household Food Security in Ghana
Eli Akorsikumah1, Hamdiyah Alhassan2
1University for Development Studies, Agricultural and Resource Economics, Ghana
Understanding highly pragmatic ways of improving the quality of life of farming households by way of ensuring food security among these households has been a topical issue among many researchers. Closely linked to this technique is the participation in nonfarm activities. For a farming household, participation in such activities serves as a hedge against the risk associated with farming and by far a potential for addressing food insecurity. Existing empirical studies focused on the effect of general participation in nonfarm activities on food security. However, participation in formal and informal nonfarm economic activities can have a varied effect on household welfare. The paper therefore analyse the determinants of participation in nonfarm activities and its effect on household food security. The study was conducted using a cross sectional national household data from the Ghana Living Standard Survey Round 7 (GLSS7) collected in 2016-17. The paper systematically considered 4,120 farming households through a multi-staged process who undertake either formal and/or informal non-farm economic activity. Multinomial Endogenous Treatment Effect (METE) model, a two-stage estimation process by Deb and Trivedi was used to analyse the determinants of formal and informal non-farm activities and their effects on farm households’ food security. Additionally, Propensity Score Matching was used to estimate the average treatment effect (on the treated group) of participation in nonfarm activities on households’ food security. The result showed that engagement in formal and informal nonfarm activities produces positive impact on household food security. The result further point out that the positive impact of nonfarm activities on household food security is partially attributed to the steady flow of income which eases households’ liquidity constraints thereby smoothening their consumption expenditure and enhancing food security. With varied level of impact, formal and informal nonfarm activities are significant in improving the wellbeing of farming households. Participation in formal and informal nonfarm activities increases per capital consumption expenditure by 10% and 9.7% respectively. There is the need for training and capacity for many farmers in order to participate in non-farm activities.
Keywords: Food security, Ghana, nonfarm activity
Contact Address: Eli Akorsikumah, University for Development Studies, Agricultural and Resource Economics, UDS-Street, 00233 Tamale, Ghana, e-mail: akorsikumahgmail.com