Drivers of Farmers’ Relationship Choice in Commodity Supply Chains: The Case of Soybean in Northern Ghana

Abstract

To ensure an efficient marketing with attractive profit margins in supply chains, factors influencing relationship choice between farmers and buyers require critical assessment. Choice of marketing relationship is the bane of most agricultural commodity supply chains in Northern Ghana.  The type of relationship agreed between farmers and buyers determines the form of delivery of a commodity. Buyers identified included retailers, itinerant traders and wholesalers. Identified marketing relationship was either on contract or spot buying with access to credit, membership to farmer association, experience and price as drivers of marketing relationship. In terms of marketing relationships, 57% of the farmers’ commodities are based on agreed contract while 43% commodities are without any binding contract. Age, price, access to credit, membership of farmer association, education and farmers’ experience are the factors influencing contracting or otherwise in established commodity supply chain in Northern Ghana. Soybean production and utilization has the potential to draw the youth into agriculture and government and private partners should intervene with the commercialization supply chains with strong contract relationships in the supply chain.