Horticultural exports and livelihood linkages of rural dwellers in southern Ghana: an agricultural household modeling application

Increasing foreign exchange problems and the deteriorating prices of traditional export commodities in developing countries are leading agricultural policy makers and donor agencies to seek diversification in export crop production. In Ghana, horticultural crops such as pineapples, mangoes and papaya appear promising because of their high labor intensity and the expanding demand for fruits in industrialized nations. Consequently, few studies have examined the linkage between export diversification and microeconomic performance. In this study, a non-linear programming model of farm-household behavior is applied to households with different resource endowments and socio-economic characteristics by exploring observed responses to alternative factor and output price scenarios. Model results show significant differences in household responses to changes in wages, prices of local staples and world market prices of horticultural crops where, beyond critical price ranges and resource constraints leads to inverse supply responses for poor households. The findings suggest the need to design an integrated policy framework that is orientated towards improving rural market imperfections for sustaining the livelihoods of smallholders.