Household-specific food price differentials and high-value crop production in rural Ghana

•Household-specific food price differentials and high-value crop production.•Cropland share allocation to high-value crops decreases with increasing price band.•High-value crop promoting policies may fail under high market transactions cost.•Improving rural infrastructure could promote responsiveness to price incentives.

Using panel data from Ghana we have examined the relationship between household-specific producer-consumer price differentials and rural household cropland allocation between food and high-value crops. We test the hypothesis that cereal price bands induce a shift of resources away from high-value crop production, making smallholders appear unresponsive to price incentives. Our results lend support to this hypothesis, implying that a policy aiming at increasing farmers' income through high-value crop production may fail if hard and soft infrastructure does not improve in rural areas, and if staple crop productivity does not increase significantly.