Modeling the impact of input credit access on farm performance and food nutrition: insights from smallholder rice farmers in Ghana

Purpose: This paper examines the nexus between input credit access, farm performance and food nutrition in Ghana. Design/methodology/approach: Using a random sample of 239 smallholder rice farmers, we utilized the endogenous switching regression model to address the self-selection issue and estimate the impact of input credit access on farm performance and food nutrition and further analyze the heterogenous impacts. Findings: The results show that socioeconomic (age, education, sex, off-farm activity and farm size), institutional (extension contact and farmer-based organizations) characteristics and location variable significantly influence the decision to access input credit. After adjusting for both observed and unobserved factors, our findings reveal that access to input credit significantly improves rice yield, net profit and food nutrition of smallholder rice farmers in Ghana. Furthermore, results reveal that the effects of input credit access on rice yield, net profit and food nutrition are heterogeneous and subject to farmers’ propensity to access input credit. Specifically, we find that those with a higher inclination to access input credit experience larger positive impacts, indicating a positive selection process. Research limitations/implications: Access to agricultural input credit is essential for the adoption of modern and climate-smart technologies in agricultural production. However, the persistent lack of access to input credit hampers agricultural productivity and constrains investment in farm input resources in Sub-Saharan Africa. Our study calls for proper targeting of input credit interventions to incentivize the uptake of farm input credit such as improved seeds and fertilizers to improve overall crop production and achieve food security. Originality/value: The study utilized rigorous econometric methods to analyze the impact of input credit access on smallholder rice farmers' farm performance and food nutrition in Ghana. The findings provide valuable guidance for policymakers and future research on agricultural development in Ghana.