Climate-Smart Agriculture, Trade Flows and Rural Farm Households Resilence to Climate Change in Ghana

Abstract

Climate change (CC) externalities on agriculture necessitate that farmers and governments adopt climate-smart agriculture (CSA) practices. Our study evaluated the impact of CSA on agricultural commodity trade and rural farm households’ resilience to CC in Ghana. We adopted the DCGE model to analyze the effect of investment in CSA practices on agricultural commodities trade flows and price fluctuations. Our model was calibrated to the SAM of Ghana for the year 2019. Also, we used count data modeling to analyze the impact of the agricultural input supply system and contract on nudging the adoption intensity of CSA among rural farmers in Ghana. To control for endogeneity, we adopted the instrumental variable regression (IV) to estimate the impact of CSA practices on time poverty. For the second and third objectives, we surveyed farmers in the Central and Upper East regions of Ghana. A sample of over 610 farm households was surveyed. We found that public investment in CSA practices by 5% or more reduced prices of agricultural commodities at a higher rate than the BAU scenarios, even though prices increased in both scenarios. Furthermore, we found that the public investment scenario case had higher export volumes than BAU. Additionally, we found that public CSA investment scenarios reduce agricultural commodities imports more than the BAU scenario. Also, the study found that agricultural contracts and supply systems increased the adoption intensity of CSA practices. Finally, we found that CSA practice intensity had no effects on actual hours per week and the total time poverty of the farm households, although the effects are negative. Our study suggested that the government needs to complement public CSA investments with policies that help farmers increase market access, improve storage and transport infrastructure, and facilitate access to credit. Furthermore, the Ministry of Food and Agriculture (MoFA) should establish input credit schemes to allow farmers to access agricultural inputs without upfront payment. Integrating CSA practices in formal and informal education systems to build a knowledge base and foster a culture of sustainability.