Agricultural Financing and Credit Constraints: The Role of Middlemen in Marketing and Credit Outcomes in Ghana

Agriculture is the main stay in many African countries and the majority are subsistence farmers with low income. Similarly, the poor in Ghana are mostly found in rural areas and agriculture forms the mainstay of these economic agents. Despite the contribution of agriculture to the national economy, the incidence of poverty is reported to be highest amongst food crop farmers, and amongst self-employed rural people working in off-farm activities such as trade. This paper addresses the contraints to agriculture, in order to address the issue of poverty as envisaged in the Ghana Poverty Reduction Strategy paper and currently the Ghana Shared Growth and Development Agenda. The study specifically analyses the spatial and cropwise distribution of margins and relates these to the characteristics of the various markets in order to assess the extent to which middlemen affect agricultural financing, farm revenue and poverty in rural areas. It also investigates the margins between farmgate and market prices for different crops in different regions and ascertains the extent to which farmers use forward sales to obtain finance from marketers.

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