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Subsistence To Commercial Farming

Throughout ancient medieval times through to the modern ages and even current times man has cultivated crops mostly on a subsistence basis. With little or none existence of trade and impenetrable markets, subsistence living/farming seemed to be the order of the day or more so the compelling order. Even with the advent of trade and so called globalization many countries and communities still have semblances of subsistence farming as around the world agriculture is the back bone of many nations.
For Ghana, “the agricultural sector account for 35 percent of the country’s gross domestic product and besides it is a major source of income for most households. This makes the agricultural sector critical to Ghana’s ambitious goal to achieve middle level income status by 2015.” (SEND GHANA 2009).
The world all over today “broad changes are taking place in agricultural food systems worldwide” (Pingali, Khwaja and Meijer, 2005) and Ghana is no exception. “These changes seem to be propelled by economic development, increase in per capita incomes, changing technology and urbanization. Higher incomes and increasing numbers of women in the labor force mean greater demand for high-value commodities and processed products.” (Pingali, Khwaja and Meijer, 2005).
Commercializing “agriculture (farming) requires policies which are responsive to all categories of farmers especially women and small holder farmers” (SEND GHANA 2009). This is due to the fact that these categories of people are vulnerable and prone to the vagaries of the weather.
Indeed all policies or change processes come with it certain constraints that often back tracks the set agenda and “for the small farmer there are difficulties to commercialization that arise from poor public good provision that hinders market exchange and a new set of transaction costs that emerge from dealing with a food system characterized by different rules, regulations, and players.”(Pingali, Khwaja and Meijer, 2005). This of course can be attributable to the deprived nature of rural communities in most developing countries.
“Although agricultural commercialization puts increased emphasis on specialization, that is not confined to the production of high-value crops. For many farmers the transition to commercial staple crop production is far more pertinent.” (Pingali, Khwaja and Meijer 2005).
“The principal challenge confronting governments is to ensure that smallholders and other rural poor benefit from commercialization, either through participation in the market or by successfully exiting agriculture and finding employment in different sectors.” (Pingali, Khwaja and Meijer, October 2005).
There is some compelling evidence to suggest that socio-cultural factors deter entry of small farmers into transiting from the subsistence farming into commercialized farming. Thus, interventions aimed at reducing or eliminating these socio-cultural factors could encourage increased farmer participation in competitive markets.
Thus I wish therefore examine the relationship between socio-cultural believes/factors of small farmers and their potential to commercializing farming.
PROBLEM STATEMENT “The Wa East district was carved out of the Wa municipal district and made an autonomous district by LI. 1746 in July, 2004. The district is located in the south-eastern part of the upper west region with Funsi as the capital. The economy of the district is agriculture based as over 90% of the population is into agriculture.” (Wa East District Assembly, 2004). The irony of the matter is that food crop production is still cultivated on a subsistent basis despite efforts to modernize the sector over years gone by and more recently by various governments. Indeed several development agencies notable among them being Tumu Deanery Rural Integrated Development Programme have made frantic efforts to assist these small holder farmers in the district to transition from their subsistent level of production to commercial farming but no major success story can be written about such efforts.
Lack of access to information and markets, poor rural infrastructure base of the district, lack of extension services and agricultural inputs are among some of the critical factors hindering this transition. However, the creation of the district has brought with it some amenities that seek to improve the socio-economic base of the district and thus boost agriculture. But about six years after the creation of the district the situation can be said to be no much different than before despite vast improvement in infrastructural base of the district. Fewer or indeed no attempts have been made to understand the cultural values and belief systems of the people and relate it to commercializing farming in the district among small holder farmers. There is thus the need for a study to understand why small holder farmers face challenges transitioning into commercialized farming.
What are the challenges faced by subsistence farmers in making the transition to commercial farming?
Tumu Deanery Rural Integrated Development Programme in a catholic church non-governmental organization operating in the south Sissalla area of the Wa East district. One of its projects is the “Farmer Agricultural Production and Marketing Project. The project seeks to aid farmers in the production and marketing of identified commercial crops that is soya beans, sorghum and groundnuts. After the first phase of the project, the evaluation conducted revealed that the south Sissalla area was lagging behind compared to other areas where the same project was being was being implemented, that is selected communities rural communities in the three regions of the north. Soy beans production was high in the south Sissalla area though insignificant compared to the other regions, hence this necessitated the use of soy bean as a case study.
Sub Questions:
In what ways might cultural beliefs and value systems inhibit commercializing farming?
In what ways might gender norms impact on the transition from subsistence to commercialized farming?
In what ways might economic risk impact on smallholder farmers’ decision about whether or not to transit from subsistence to commercialized farming?
In what ways might the land tenure system of the Wa East District impact on the transition from subsistence to commercialized farming?
To explore the role of socio-cultural values, beliefs and norms in the commercialization of small holder farming in the Wa East District by using soya bean as a case study.
Sub Objectives:
To find out the ways by which socio-cultural beliefs can promote commercial farming.
Examine gender norms orientation of labor allocation
To find out whether subsistence farming is regarded as an insurance against economic risk.
To examine the land tenure system of the study area.
LITERATURE REVIEW Though extensive work has been done on subsistence farming vis a vis transitioning to commercialized farming, much emphasis has not been placed on cultural and social factors that are key in the commercialization process. Commercialization implies modernization and modernization comes with its own norms that might not immediately blend well with the traditional system hence the need to understand the traditional order.
“One of the major problems in dealing with subsistence agriculture is defining the term as such”. ( Abele, Frohberg 2003).
“It seems that the preferred definition of subsistence agriculture relates it to the share of marketed produce. The lower this share, the higher is the degree of subsistence orientation. Still, this definition is a relative one, as it can be assumed that there is no longer an absolute subsistence agriculture, either in Eastern Europe or elsewhere in the world.” (Abele, Frohberg 2003).
Heidhues, Brüntrup identifies three sources of ambiguities with defining the term subsistence. These include:
a) “subsistence is used as a concept of market-integration but also as a concept for measuring the standard of living,”
b) “subsistence orientation can be measured from the point of view of consumption but also of production, and
c) adding to these conceptual ambiguities, any subsistence indicator can move along a gradient from almost 100% to practically zero.”
To them drawing the line between subsistence and market orientation always involves certain arbitrariness. “Thus, a farmer who “predominantly” produces for his or her own family’s consumption is labeled a subsistence farmer. If he produces predominantly for the market, he is considered a commercial farmer. Where to draw the line is arbitrary – often the 50% line is used. They however admit that the term is used in different context with different meanings and has thus been ‘burdened with prejudices and misinterpretations’. (Heidhues, Brüntrup, 2003).
Meanwhile, according to Kopeva and Noev (2003), “Subsistence farming is a production process directed to the fulfillment of the household’s basic needs. It neglects existing market conditions and usually applies non-optimal use of resources under certain constraints.” Despite this some families sell parts of their farm produce to meet certain domestic needs. For instance in rural communities in Ghana, men particularly sell some of their farm produce for tobacco, “pito”, etc. “Subsistence farming, mostly referred to as smallholder farming, implies producing enough food for the needs of the farmer and his family” (Spedding 1979, cited in Kopeva and Noev, 2003). “It leads to low labor productivity, low land productivity, soil erosion, ecological damages, food shortages, rising food prices and an economic environment which has shown itself uncongenial to accelerated mechanized farming” (Atta-Konadu 1974, cited in Kopeva and Noev, 2003). However “….it assures survival and a basic standard of living without, however improbable, disastrous consequences. (Heidhues, Brüntrup 2003). Indeed research also indicates that subsistence farmers are “poor but efficient”. (Schultz, 1964, cited in Heidhues and Bruntrup, 2003). These assertions therefore imply that subsistence farmers/farming does not necessarily leads to the factors as mentioned by Atta-Konadu.
Therefore, whether subsistence farming is a bane or blessing, there have been several efforts aimed at changing the status quo which in my opinion is a worthy course for, according to Pingali (1997), “…subsistence farming in any form is not a viable activity for safeguarding household food security and welfare”. (Pingali 1997, cited in Pingali, Khwaja and Meijer, 2005).
Several factors have been identified as militating against this transition process and efforts need be made to understand them. Any policy effort that aims at changing subsistence agriculture requires an understanding of its determining factors. Experience has shown that “programs of directed change designed to reach peasants are likely to fail unless based upon understanding of the values, attitudes, and motivations of this audience” (Rogers 1970, cited in Heidhues and Bruntrup, 2003).
Pingali, Khwaja and Meijer 2005, considered the transaction cost factor, to them, “…a new set of transaction costs that emerge from dealing with a food system characterized by different rules, regulations and players. These transaction costs are significant variables that can inhibit small farmers’ entry into competitive markets.”
“Rural farm/household interactions with markets are generally subject to high transaction costs, particularly under conditions of underdeveloped market infrastructure such as those typically found in developing countries. They originate in imperfect information, transportation, negotiation, monitoring and supervision, motivation, coordination, management, etc.” (Heidhues, Brüntrup 2003). There is also the issue of no alternative avenue thus to access the few resources available, one would have to pay exorbitant prices for them in rural communities.
“A comprehensive approach to analyze the impact of transaction costs on self-sufficiency is presented by De Janvry and Sadoulet” (De Janvry and Sadoulet, 1992 cited in Heidhues, Brüntrup 2003). “The result (of transaction costs) is that there exists a price band that creates a gap between the effective price received for items sold and the effective price for items purchased. There exists a range of products and factors for which equilibrium between supply and demand occurs within the price band. In this case, the shadow price is higher than the sale price and lower than the purchase price, with the result that neither sale nor purchases are desired, and there is self sufficiency in this commodity or factor”. (De Janvry and Sadoulet, 1992 cited in Heidhues, Brüntrup 2003). “Seen in this way, a commodity is not by its nature a tradable or non-tradable one, and a farm is not defined as subsistence or market-oriented by its production or consumption structure, but by prices and transaction costs specific to each decision unit.” (Heidhues, Brüntrup 2003).
In contrast, Kopeva and Noev (2003) , identify “land ownership fragmentation, weak internal consumer demand as well as low farm gate prices as contributing to vitalizing subsistence farming.” They also consider the “insufficient development of road infrastructure in the under-developed rural areas, poor market information and lack of competitive markets as additionally strengthening their existence.”
The above goes to buttress the point that efforts aimed at moving from subsistence to commercial farming needs to consider “subsistence farmers’ resource constraints, institutional and infra-structural limitations and most importantly traditional cultural values adequately into account.” (Heidhues, Brüntrup 2003). They further give several determinants of subsistence farming as those strong forces that keep rural people in subsistence, and even induce others outside of agriculture to get “back to the roots”. These they categorized into the following “country external factors that are given for each country (such as a country’s ecology, climate, history, culture and international environment), the farm external and country internal factors, such as government policies, institutions, markets etc., which can be influenced by the country itself but are exogenous for the individual household and the farm/household internal factors, i.e., factor endowment and farm-family specific characteristics. Farm/household decisions are influenced by all categories of factors.”
By critical examination many of these factors shows that they are interlinked and influence each other.
If we are to go by the words of Heidhues and Brüntrup (2003), that “any policy effort that aims at changing subsistence agriculture requires an understanding of its determining factors, then it is worth considering the fact that ‘programs of directed change designed to reach peasants are likely to fail unless based upon understanding of the values, attitudes, and motivations of this audience’ (Rogers 1970, cited in Heidhues, Brüntrup 2003).
Therefore, this study attempted to systematically make a socio-cultural analysis of transiting from subsistence to commercial farming in the Wa East district using soy bean as a case study with a view to characterize them, determine their associated benefits and problems, and to provide the appropriate recommendations to agribusinesses and policy makers.
Study Area The research will be conducted in the Wa East district of the Upper West Region of Ghana. The researcher’s decision was informed by the intensity of farming in the area, “86.5% males are into that occupation whilst female’s proportion is 82.0% is the main occupation of the people.”(Wa East District Assembly, 2004)
Most farmers in the district are peasant subsistence farmers and are particularly at risk from falling crop yield, due to their dependence on agriculture.
SAMPLING TECHNIQUES This is crucial in research because it aids the researcher to determine how wide the coverage is acceptable, the type of respondents to give answers to research questions, whether the selected group of respondents will be representative of the study area, among others.
With regard to this study, the research will make use of the snowball sampling. With this method “participants or informants with whom contacts has already been made use their social networks to refer the researcher to other people who could potentially participate in or contribute to the study.” (Mack, Woodsong, et tal, 2005). Individuals who otherwise could not have been reached through the use of alternative sample strategies might be captured in the research by the use of snowball sampling.
According to Adamchack et tal (2000), “Data is collected from a small group of people with special characteristics, who are then asked to identify other people like them. Data is collected from these referrals, who are also asked to identify other people like them. This process continues until a target sample size has been reached, or until additional data collection yields no new information. This method is also known as network or chain referral sampling”.
The snowball method of sampling would used to solicit response from farmers who have made the transition to commercialized farming as well as those who have not yet the transition.
SAMPLING UNITS The sample unit for the research would be four communities within the district. This is because since the district divided by River Kulpong, I intend to pick two communities from each side that is the Western and Southern parts of the district in order to get a true representation of the whole district.
SAMPLE SIZE For the purpose of the study, I intend to have a sample size of forty persons. That is ten individuals in each community. This sample size is chosen because the research intends to gain an in-depth knowledge of the phenomenon under investigation.
HOW DATA WOULD BE COLLECTED Collection of data involves developing strategies to find answers to research questions. Many methods are used in social research to collect data but it is important to select a method in the light of the problem under investigation. It is argued that “there is no protocol to be followed in the use of any ……… procedures; the procedure should be adapted to its circumstances and guided by judgment of its propriety and fruitfulness. One should sedulously seek participants in the sphere of life who are acute observers and who are well informed”. (Blumer 1979:20, cited in Twumasi 2001).
The following data collection methods will be employed in the collection of primary data. The research will make use of structured interviews. It is a one on one, face to face conversation with an individual to solicit response pertaining to the subject under investigation. With this a set of questions are prepared and asked of the respondent. I deem this method appropriate because as a native I am conversant with the local language, and understand the culture of the people who will help me establish a rapport. Moreover interviews “offer flexibility” (Twumasi 2001 P35). More so “the tone of the conversation can easily be varied to fit into current prevailing social atmosphere. It is also a suitable method of collecting data from rural communities and illiterate people.” (Twumasi 2001 P35). Structured interview will also help in minimizing biases as the same set of questions will be asked all interviewees.
Based upon what is learned from the interviews, focused group discussion will be conducted to solicit views on themes that might be commonly coming up during the course of conducting interviews.
The study will also make use of certain participatory rural appraisal tools to aid in data collection. These would include cropping calendar which is usually a “time sequential arrangement of operations in the production of crop or crops. With this all operations from land clearing to storage and selling are first identified. This is then matched with the periods of the year the the activities are undertaken. Symbols are gathered and used to indicate the various cultural practices and the times of the year the year that they are done. This method is useful because it gives the period of planting and other cultural practices; it shows gender labor distributions and helps the researcher to know farm activities and their spread.” (Miller and Apusigah, 2004).
This method would give an insight into how farming activities are carried out within the community; it can assist me planning my activities ideally to suite the people and also if observation is to be employed, it would help directing my focus on specific activities.
DETAILS ON DATA ANALYSIS “Data will be analyzes by coding which refers to organizing and assigning meaning to qualitative data collected on the field. By this data analysis will be simplified.” (Adamchack et al, 2000).
Transcription will also be done for recorded interviews and focus group discussions

Effect Of Crude Oil Prices On Indian Economy Economics Essay

This paper analyzes the effect of crude oil prices on the macro economic variables of the Indian economy. The oil prices have started rising significantly since the initiation of the twenty first century; one can analyze the impact of an oil price shock. As the oil prices changes there is a huge impact on the GDP, inflation, unemployment rate and industrial growth production .In short, oil price fluctuation has adverse effects on the economy .The paper seeks to find out the trends, causes of oil price hike in recent times and its impact on the macroeconomic variables of India using multiple regression as a methodology using SPSS software.
I would like to express my sincere thanks and gratitude to my mentor for Research Project -2 in Finance, Ms charu banga for her extremely valuable guidance and suggestions throughout the making of this report.
I also thank the dean Dr. Sunil Rai for providing me with an excellent opportunity to learn and present my studies in the form of this project report.
Lastly, I thank my parents for their continuous moral support and encouragement.
I have great satisfaction and immense pride in being a part of this educational institute: SVKM’s NMIMS’s Mukesh Patel School of Technology Management