Farmer-led innovations and rural household welfare: Evidence from Ghana

- Rural farmers develop agricultural innovations.
- We analyze the effect of farmer-led innovations on rural household welfare.
- Farmer-led innovations significantly increases household income and consumption expenditure.
- Farmer-led innovations reduce the duration of food shortage and the severity of hunger.
- These positive effects are more pronounced for 'minor' innovators.

It is well recognized that agricultural innovations could emerge from many sources, including rural farmers. Yet the numerous micro-level studies on impacts of agricultural innovations have largely focussed on externally promoted technologies, and a rigorous assessment of impacts of farmer-led innovations is lacking. We address this issue by analyzing the effect of farmer-led innovations on rural household welfare, measured by income, consumption expenditure, and food security. Using household survey data from northern Ghana and applying endogenous switching regression and maximum simulated likelihood techniques, we find that farmer-led innovations significantly increase household income and consumption expenditure per adult equivalent. The innovations also contribute significantly to the reduction of household food insecurity by increasing food consumption expenditure, by decreasing the duration of food shortages, and by reducing the severity of hunger. Furthermore, we find that these effects are more pronounced for farm households whose innovative activities are minor modifications of existing techniques. Overall, our results show positive welfare effects of farmer-led innovations, and thus support increasing arguments on the need to promote farmer-led innovations (which have been largely undervalued) as a complement to externally promoted technologies in food security and rural poverty reduction efforts.