Seedling production and choice among cashew farmers in Ghana : a profitability analysis

Purpose: The unavailability and inadequate use of cashew seedlings for propagation are part of the challenges facing the cashew sub-sector in Ghana. However, promoting investment into cashew seedling production should be based on the analysis of the profitability and viability of such a venture as well as the respective determinants of farmers' demand for the planting material. Design/methodology/approach: This study used gross margin/contribution, net margin and contribution ratios to analyse the profitability of cashew seedling production under four different business models. Also, the determinants of choice of planting material for cashew plantation among farmers was analysed via a multinomial probit regression. Findings: The study revealed that cashew seedling production is profitable with a gross margin of $8,474, $2,242, $1,616 and $1,797 and contribution to sales of 31–53% for the various business models. The positive determinants of the use of cashew seedlings were off-farm job participation and extension contact, whereas farm size and age of plantation negatively influenced the use of seedlings. Land acquisition method also influenced the use of both seedlings and seeds negatively. Practical implications: The findings provide empirical evidence of the viability and profitability of cashew seedling production as a viable business venture and off-farm opportunity in rural areas. The information from the study will help major stakeholders in cashew production to understand the type of farmers who use seeds and seedlings as well as the reasons for using or otherwise. Originality/value: Significant research in the cashew value chain had focussed on the profitability of cashew plantation with little literature on profitability and viability analysis of cashew seedling production. Similarly, this study provides a significant value chain job opportunity as well as literature on the choice of cashew seedlings among current and prospective end-users.