Assessing the performance of regional soybean prices in Ghana

Abstract

Soybean production has been widely promoted in sub-Saharan Africa as a means of improving rural household income. Numerous studies point to poor adoption levels, low yield levels, and limited profitability among smallholder farmers. Poor performance of soybean among smallholders generates numerous hypotheses as to the root causes. One logical cause is low prices, which result from anecdotes from the field, especially among producers and policymakers. In this study, the first of its kind that we are aware of, analyzes regional soybean prices over time across six key growing and commercial regions of Ghana. We employ cointegration and multivariate vector error correction model to measure the level of international and inter-market integration and performance. The results show regional and international integration as well as Granger Causality results consistent with the local supply-demand context. Specifically, the international market Granger causes Kumasi, Bolgatanga, and Wa markets, while the Tamale and Kumasi, serve as the leading production and demand markets, respectively. The results of the study provide evidence that prices do perform well in Ghana and are not a major source of weak adoption and low levels of profitability among smallholder soybean farmers.

Agronomic and economic assessment of input bundle of soybean in moderately acidic Savanna soils of Ghana

“…Existing data in Ghana indicate that agricultural input use is economically beneficial (Houssou et al., 2017). Recent research by Martey, Gatti, and Goldsmith (2020) show relatively strong regional prices across Ghana and a healthy integration with international markets. This implies that low crop profitability among Ghanaian producers results from low input use, which induces yields, and is not caused by low prices.…”

Soy-Maize Crop Rotations in Sub-Saharan Africa: A Literature Review

“…is is especially true in rural areas, where most people depend on upon agriculture for their livelihoods and employment [25]. Soy-maize rotations, in theory, support higher incomes through greater maize productivity complemented with a soy high-demand cash crop [95] that also has numerous uses at the household level (Figure 4) [1]. Soybean, too introduces high job and value-added multipliers that help economic development across a number of industrial sectors, such as upstream inputs and mechanization and downstream feed and livestock and food processing, oil, and manufacturing [1,34,96].…”

“…Furthermore, inconsistent regional producer price data make it difficult to accurately predict profits from soybean rotation, also potentially discouraging soybean production [11]. Martey et al [95] show alternatively that prices, at least in Ghana, are efficient, integrated with international prices, and fair. us, low profitability results from other factors such as low yield, insufficient storage, and low production volumes, not low prices.…”

Heterogeneous demand for soybean quality

“…Growth in the aggregate soybean supply since 2008, now at about 150 000 MT per year (Figure 1), results from extensification and not from the use of improved technologies or greater factor productivity, hence the low yields. Domestic demand is over and above the domestic supply, thus prices are favourable (Martey et al 2019). The poultry industry utilises about 75% of the total soybean demanded annually in the form of soybean meal as the protein base March 2020…”

“…The soybean marketing system in Ghana (Figure 2) consists mainly of actors that serve as intermediaries between northern producers and central and southern customers. About 90% of the soybean traded is purchased from northern Ghana, while the remaining originates from the Ashanti Region of Ghana (Martey et al 2019).…”