Do outgrower schemes enhance technology adoption and productivity? Evidence from maize farmers in Northern Ghana

Abstract

Nucleus outgrower schemes are contractual arrangements where well‐resourced large‐scale farmers (nucleus farmers) are empowered by development support agencies to take charge of smallholder farmers, by providing them with market access and the necessary training on agronomic practices and farm inputs for production. In this study, we examine the impact of participation in outgrower scheme on technology adoption and farm productivity, using data from 634 smallholder maize farmers in Northern Ghana. We use the linear regression with endogenous treatment effects model to account for both observable and unobservable selection bias. The results reveal positive and significant marginal effects of outgrower scheme participation on technology adoption and maize yields. Outgrower scheme participants applied 6% and 82% more inorganic fertilizer and weedicides, respectively, than nonparticipants. Maize yield increased by about 3% for the participants more than nonparticipants. The findings also show that factors such as distance to market, distance to nucleus farmers' satellite office, nucleus outgrower scheme awareness, input price, and farmer‐based organization significantly influence outgrower scheme participation decisions, as well as technology adoption and maize yields.