Aeroplanes without engines: Smallholder farmers’ demand for,access to and utilisation of agricultural trade credit in Ghana

Emmanuel Abokyi, Patrick Tandoh-Offin, Anthony Anyane Sackey, Eric Worlanyo Deffor, & Nancy Sam-Tagoe Adjadogo

Abstract
The paper investigates how agricultural trade credit (ATC) extended to smallholder cereal farmers leads to an (in)efficient agricultural marketing systems for farm produce in Ghana. With data from smallholder farmers and value chain actors, such as input dealers, aggregators and off-takers, the study employs focus group discussions to collect qualitative data for triangulation and content analysis. The findings show that ATC is the primary mechanism through which smallholder farmers in Ghana finance their production, with intermediaries such as aggregators, input dealers and processors acting as the main financiers. We further find that ATC also entrenches farmer dependency, weakens bargaining power and leaves both sides exposed to default risk from practices such as side-selling. Bridging the existing agricultural credit access gaps will require formal lenders and intermediaries to redesign ATC products around the crop calendar and group-based liability, while investing in de-risking instruments.