EFFECTS OF FERTILISER SUBSIDY ON SMALLHOLDER MAIZE FARMERS’ ACCESS TO FERTILISER AND TECHNICAL EFFICIENCY IN THE NORTHERN REGION OF GHANA

Abstract

The study examines technical efficiency in maize production and how fertiliser subsidy programme influences technical efficiency. The study employs the stochastic frontier to estimate technical efficiency and how farmer, farm characteristics and fertiliser subsidy affects technical efficiency. The study also examines factors that determine success at participating in the subsidy programme using the Probit model and farm and farmer characteristics collected from households in the northern region. Cross-sectional data collected from 301 households in three districts was used for the analysis. The study finds that relatively older farmers were more likely to participate in the subsidy programme than younger farmers. Factors such as farm size, price of the subsidised fertiliser, distance to input shop, attempt at participation in the subsidy programme, credit borrowed and off-farm income were the factors that influence the probability of the farmer participating in the subsidy programme. Participation in the fertiliser subsidy programme however did not have any significant effect on the technical efficiency of maize farmers in the sampled study area as participation did not make farmers more technically efficient. The study recommends other factors such as seed and measures to ensure effectiveness in the subsidy system must be implemented before the subsidy can have the desired effect.