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CHAPTER TWO LITERATURE REVIEW 2

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CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
This chapter discusses what credit input package is. It reviews existing knowledge about the reasons why smallholder farmers and the input package providers engage each other in such agreements. It also discusses the challenges faced by smallholder rice farmers. It discusses the types of input package agreements available to farmers and the challenges both smallholder farmers and input package providers face when they enter into such agreements. Finally, it discusses the impact of input package support on the yield and income of smallholder farmers who access them.

2.1 Theoretical Review
According to ISSER (2002), a country’s social, economic and development goals can be achieved with growth in its Agricultural sector. Though stakeholders in the sector agree with this fact, however the growth rate of the sector has been declining. In a report by Ghana statistics service (2002), 65% of Ghana’s population live in rural areas and they constitute majority of farmers depending on rain as the source of water for crop production. Rural farmers are smallholder farmers and are basically the most efficient crop producers and have advantage over commercial farmers in terms of labour, supervision and motivation to farm. Smallholder farmers mostly do not have the capacity to meet their crop budget demands which includes initial funds for land acquisition and land preparation, improved seeds for improved yield, adequate fertilizer and crop protection product quantities, lack of improved techniques and inability to meet the produce standards of processors down the value chain (NDPC, 1997; ISSER, 1999, 2002).
Jaffee & Morton (1994) stated that these challenges of smallholder farmers can be overcome with credit farm input package support to reduce their budget burden. Credit farm input package support is a form of contract farming were smallholder farmers received farm inputs at the beginning of the farming season and pay back in kind at the end of the season. Farm input package consist of a portion or all of the following items; land preparation and harvesting service, seeds, fertilizers, weedicides, insecticides, fungicides and sprayers with added technical and market support. Contract farming in rice production involves large or medium scale buyers such as exporters or processors that need to ensure a steady supply of paddy meeting certain quality standards and so are willing to pay a high premium for paddy quality and safety.
The work done by Glover (1984) and Minot (1986) showed that the role of contract farming has been a topic of interest in developing countries since the 1970’s. Critics of contract farming including Little ; Watt (1994) argue that companies take advantage of cheap labour and transfer production risk to smallholder farmers). The criticisms are in regard to the imbalance of bargaining power between the contracting parties. It has been shown in some studies that contract farming has negative impacts on farmers’ income (Cai et al, 2008; Zola et al, 2007). Cai et al found out that contract farmers earn lower than noncontract farmers and former contract farmers who used to join contract farming.
Whiles this criticism persists, other groups including Singh (2002) also think smallholder farmers may be marginalized because large companies prefer to work with medium and large scale farmers and this will worsen the inequality in rural areas. The work done by Minot, (1986) revealed that most of contract framings improved the income of smallholder farmers although rigorous evaluation was rare and that the potential of failure of contract farming was high. Little, (1994) also found out that incomes from contract farming increased from a moderate (30- 40%) to high (50- 60%) proportion of participants.in a review of the experience of contract farming in Africa, Porter & Phillips- Howard (1997) concluded that farmers were generally better off as a result of participating in contract farming in spite of a number of problems that arose in the communities. In theory the institutional arrangement and technology transfer through contract farming improve agricultural production and marketing that may result in an increase in farmers’ income. Studies by Miyata et al (2009), Glover and Kusterer (1990) and Warning ; Key (2002) show that contract farming helps to improve farmers’ cultivation and marketing of their produce. They argued that through contract farming smallholder farmers access agricultural inputs machinery and farming techniques.

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2.2 Theoretical framework of the study
The theoretical backup for credit farm input package support to smallholder farmers is the “transaction cost” theory or transaction cost economics, originally coined by Ronald Coarse (1960) but become widely known through Oliver Williamson (1985). The transaction cost is defined as all the cost incurred in gathering the necessary processing information to coordinate the work of people and machines that perform the primary processes, whereas production cost includes all cost incurred from the physical processes necessary to create and distribute the goods and services being produced.

Figure 2.1: Transaction cost theorem

source:
When the external transaction cost is higher than the internal transaction cost, the company will grow. When the internal transaction cost is higher than the external transaction cost, the company will be downsized by outsourcing.
The theory supposes that companies try to minimize both cost of exchanging resources with the environment and the bureaucratic cost of exchange within the company. That is, the company weighs the cost of exchanging resources with the environment against the bureaucratic cost of performing activities in-house. It illustrates the make or buy decisions of companies.

2.3 Conceptual framework of the study
Smallholder rice farmers in the Weta irrigation scheme, and for that matter Ghana, have access to irrigation water provided by the Ghana irrigation Development Authority (GIDA). Farmers are allocated pieces of land for rice cultivation and pay service charges at the end of the farming season in Kind. It is observed that though smallholder rice farmers have access to land and water for their rice farming, the major challenge is availability of funds for their farm operations. It is also a fact that almost all of the irrigation projects are located in rural settings and farmers in rural areas have little or no financial means to engage in rice cultivation.
According to Littlefield et al, (2003). Smallholder farmers access funds from a variety of formal, semi-formal and informal sources Most often smallholder rice farmers who participate in receiving loans are faced with high cost of borrowing and risk from cultivating rice which includes, flooding, drought, lack of appropriate techniques, poor seed yield and exploitation from middlemen. Credit farm input package support may be the potential risk management for smallholder farmers and also improve their productivity. The conceptual framework of this study (Figure 2.2) shows the relationship between credit farm input package providers and smallholder rice farmers. The credit farm input package provider supplies quality improved seeds, adequate fertilizer quantities, adequate crop protection quantities, spraying machines, technical and market support. However, there are many forms of this farm input package support which ranges from a portion of the input items to a full package of items. The smallholder rice farmers on the other hand have to avoid diverting the farm input items to other crops, they must provide labour to apply the inputs, ensure quality of the produce by monitoring the crop throughout production, and sell at an agreed price.
The study seeks to understand the various agreements established between credit farm input package providers and smallholder rice farmers, the effect of the input package on their yield and income, the challenges that both input package providers and smallholder rice farmers encounter and finally identify the appropriate credit input package model for smallholder rice farmers.

Figure 2.2 Conceptual framework of the study

2.4 Conceptual Definitions
2.4.1 Small holding
A smallholding is a small farm usually supporting a single family with a mixture of cash crops and subsistence farming. As a country becomes more affluent and farming practices become more efficient, smallholdings may persist as a legacy of historical land ownership practice. In developed countries, smallholdings may be valued primarily for the rural lifestyle than they provide for the owners, who often do not earn their livelihood from the farm (Wikipedia.org/wiki/smallholding). In contrast, smallholdings in developing countries, according to Wright, (2001), are valued primarily as the major source of livelihood with additional income source from petty engagements). These farms produce about 80% of the food in Asia and sub-Saharan Africa showing the importance of small farm sector to agricultural and economic development in developing countries. Nwanze, (2011) also reported that there are 500 million smallholder farms worldwide providing livelihood for over 2 billion people

2.4.2 Smallholder farmer
A smallholder farmer is an individual who owns or cultivates up to two hectares (2ha) of farm land (Singh et al, 2002). Other researchers such as Tinsley, (2004) also defined smallholder farmers as those farmers working with limited resources, not able to produce enough to get adequate income and driven by the pressure of credit and domestic demands to sell their produce early. They experience food shortage at certain times of the year and are burden with toil and discomfort. Greenberg, (2010) also defined smallholder farmers as those farmers who practice low input agriculture, producing for local use with little regard for external market. However, smallholder farmers may not have, show or exhibit the same characteristics simultaneously. Based on the empirical observation, the term smallholder rice farmer was defined as an individual who holds and cultivates up to two hectares (2ha) of land and relies on family members for labour to grow rice.

2.4.3 Credit farm input package
Credit has been defined in many ways by many authors, but it is essentially any form of deferred payment. Finlay (2009) viewed credit as the trust which allows one party to provide resources to another party where the first party does not reimburse the first party immediately instead arranges to repay or return those resources at a later date. Bannock & Manser, (1989) also defined credit as granting the use of goods and services without immediate payment. Owusu Acheampong (1986) defined credit as temporal transfer of capital resources from an individual or institution to another individual or institution for a specific period of time. Input package is defined as products or resources permitted for use in agriculture such as seeds, fertilizers, chemicals, equipment and energy. Akpokodje et al, (2001) in their work stated that the two most important periods when credit is needed during the season are pre-planting and harvesting periods Based on empirical observation, the term credit input package was defined as granting the use of input package and services without immediate payment.

2.4.4 Credit farm input package agreement
According to Eaton & Shepherd, (2001), Credit farm input agreement is an agreement between smallholder farmers and processing or marketing firms for the production and supply of agricultural produce at predetermined prices under forward agreement Credit farm input agreements basically involves produce specifications, input provision and production management (Minot, 1986).

2.4.5 Credit farm input package programme management
Credit farm input package programme management involves the selection of farmers, acquisition of inputs for the selected farmers, training of farmers on use of the input package, provision of extension officers to support farmers during the cropping season and collection of produce from the farmers (Minot,1986). It is the process of planning, directing, controlling and coordinating all the activities, and only the needed activities to ensure successful implementation of the input package agreement over the short term period of the planting season.

2.4.6 Smallholder performance
smallholder performance is the optimal transformation of inputs by smallholder farmers to produce yield. Smallholder performance in this study measures the matching of inputs to yield produced at the end of the farming season.

2.5 Characteristics of smallholder farmers
This section describes the socio-economic characteristics of rice farmers under the following demographic feature themes: land ownership and irrigation systems, employment and income, rice and gender, age and farming experience.

2.5.1 Land ownership and irrigation systems
The irrigated land used by smallholder rice farmers to cultivate rice is owned by the Ghana irrigation development Authority (GIDA). GIDA has developed irrigated lands across major strategic regions in Ghana for the cultivation of various crops as part of the national food security strategy. Smallholder rice farmers are allocated parcels of land based on acquisition or tenancy agreements between the smallholder rice farmers and the local GIDA scheme (Amoating & Acheampong,1997). Tenant farmers, who are community members, are allocated land between 1 acre and 2.5acres of irrigated land for rice cultivation.

2.5.2 Employment and income
Agriculture is the major contributor to the economy of most developing countries. It accounts for about 70% of full time employment, 33% of national income and 40% of total export earnings in Africa (Otsuka et al, 2013). Rice contributes to employment and income of major farmers in Ghana. That is, rice farmers cultivate rice to provide employment and gain income from the sale of the paddy harvested. The level of income generated depends on the efficiency of the total growing activities employed by rice farmers from the beginning of the season to the end. Most rice farmers use varying techniques which affect their productivity and therefore their income and livelihood. Technical efficiency involves the use of human resource, inputs, skills and knowledge to improve on productivity. Kodjo et al, (2003) stated that the timely manner in which inputs, labour and cash are acquired and used affects farmers’ productivity and income.

2.5.3 Rice and Gender
According to Berisavljevic ; Chapman, (2003), More than 70% of all rice farmers in Ghana are men though there are regional variations partially connected with ethnic traditions. A research study done by Alhassan (2008) noted that many communities in northern Ghana do not allow women to own land but women can help farm on male relative’s farm. Men predominantly involve themselves in land preparation activities whiles women do other activities such as hand weeding and winnowing. Most of the irrigated lands are allocated to men who work with their wives and children on the farm. Gender inequality and discrimination have been identified in the FASDEP I and II policy documents as challenges to growth in the agricultural sector.

2.5.4 Age and rice farming experience
The work done by Berisavljecvic & Chapman, 2003 showed that the average age of rice farmers in Ghana was 41.4 years with the youngest being 13 years and the oldest being 79 years. (Ali, Imad & Yousif, 2012) cited in Kavi, F. (2015) stated that older farmers usually stick to their old ways of farming and are unwilling to accept change whiles the young farmers are willing to take risk and do new things on their farms. Almost all rice farmers are experienced in growing rice, the most experience being those who have practiced for many years.

2.6 Challenges of rice cultivation in Ghana
Smallholder rice farmers in Ghana are faced with a myriad of challenges in producing rice. These challenges affect their productivity and income at the end of the farming season. There is lack of or inadequate infrastructure investment in smallholder production areas. Smallholder farmers are not able to access credit and input during the season.in addition there are inadequate improved technology, inadequate machinery and equipment, low quality and quantity of paddy rice and lack of assured and organised market. The last but not the least is risk in the rice production and market sector.

2.6.1 Lack or inadequate infrastructure investment
Rice production expected to achieve good returns requires capital investment in land development and water supply systems. Though smallholder rice farmers are the most efficient in terms of labour, motivation and production cost, the infrastructure available to them in irrigation schemes have deteriorated with little or no maintenance. Poor water quality and land forming during farming period can reduce yield up to 60% down the potential of any quality rice seed planted. This has adversely affected the productivity and income of many rice farmers across the country. Most dams built to store water and distribute during the farming season have been broken in one or several parts resulting in some water dams losing their capacity to hold water for use by smallholder rice farmers in irrigation areas. Water canals which conducts water from the main irrigation source to the field have been blocked by silt, water plants and people who divert the water to catch fish resulting in inadequate or no water reaching the fields. Most production areas do not have enough paddy drying floors to accommodate the increasing production from farmers.

2.6.2 Lack or inadequate access to credit and input
The two most important period that rice farmers require credit and input are the pre-planting and harvesting period of the season (Akpokodje et al, 2001). Access to credit and input has an important role to play in increasing productivity of smallholder rice farmers because paddy rice cultivation requires a high cash outlay (Iqbal et al., 2003). Only few institutions are available to give cash credit or input credit to farmers. usually financial institutions provide cash credit whiles processing plants and aggregators provide input credit to farmers on agreed terms. A research study by Jan et al, (2012) noted that Smallholder rice farmers find it difficult to access credit and input for rice cultivation season after season. Some of the factors which makes credit and input access difficult are high interest rate, lack of collateral, small land sizes, delay in disbursement leading to season passing over and lack of farmer participation in planning credit programme. Lack of credit and farm input result in poor land preparation, inadequate application of chemicals and fertilizers leading to poor yield leading to poor income. This drives farmers into poverty.

2.6.3 Inadequate improved techniques
Improved rice growing techniques are not widely available. Smallholder rice farmers in Ghana have cultivated rice over the years using traditional or rudimentary techniques, partly because of lack of technology centres across the country. This has also resulted in poor extension services in rice growing areas. Non-governmental organisations (NGO’s) have worked with the Ministry of Food Agriculture (MoFA) to improve on the techniques of smallholder rice farmers but these projects lacked the capacity to continue after the project closure largely due to unavailability of funds or other capacity on the part of both farmers or MoFA. In effect there is no improved technology for the production, harvesting, processing packaging and storage of rice in Ghana.

2.6.4 Inadequate farm machinery and equipment
There is inadequate farm machinery and equipment for rice cultivation in Ghana. Mechanization centres set up by the Ghana Government were largely insufficient to allow for timely land preparation, planting and harvesting. More so, the breakdown of the machines and lack of adequate funds to maintain them have worsen the quality and quantity of paddy rice production in Ghana. Some private individuals and institutions ventured into mechanization services to rice farmers but most of them have withdrawn due to lack and high cost of spare parts to maintain the machines.

2.6.5 Low quality and quantity of rice production
Smallholder rice farmers in Ghana produce low quantity and quality paddy rice for milling into white rice brands. There are different types of all varieties of rice seeds across rice growing areas. For example, Jasmine 85 seed in Asutsuare is different for that in Weta, Tono and Ashaiman. This makes it difficult for a large scale miller to collect and mill paddy from these areas and brand. The mixture of rice seeds in rice growing areas in Ghana is due to researchers coming up with different rice seed types. Once farming obtain them they keep it and this has resulted in many seed types in rice growing areas. As smallholder rice farmers in Ghana have limited knowledge of the preference of the market, they do not attempt to change the quality of their produce. The production of paddy in small plots further reduce the quality if they are to be collected across for large quantity supply.

2.6.6 Lack of assured and organised market
Lack of standards and grading systems discourages the production of quality paddy rice in Ghana. Large scale processors or millers find it hard to gather same quality within a short period of time for milling to supply customers waiting to also distribute to consumers. This creates shortage of quality branded rice in the local rice market. Poor quality paddy results in low price for paddy rice in production areas. This creates price variation across the regions, as such demand comes mostly from local buyers such as market women and local millers. Farmers who have good will of the market women receive a little high price. Low quality paddy is often processed by small and medium scale millers usually located in the farming areas or major rice market centres. The problems of rice marketing are derived from lack of market information, poor paddy quality, low prices and poor marketing infrastructure.

2.6.7 Risk
Risk is the chance that smallholder rice farmers may not fully recover their investment at harvest at the end of the farming season. There are various risk facing smallholder rice farmers namely
1. Unfavourable Production factors: Abiotic refers to the absence, inadequate or excess supply of environmental conditions necessary for the achievement of the potential of the crop as drought or floods, low or high temperature, strong wind etc. And biotic refers to the invasion by unwanted organisms as weeds, insects and disease.
2. Economic risk: risk inherent in the economy as a whole. Fluctuations in exchange rate may affect the value of loans and smallholder farmers may not be able to pay with their produce. Changes in interest rate may also affect the final value of loans smallholder farmers have to pay at the end of the season. Inflation may also affect the final value of the produce resulting in farmers not able to pay for their debts.
3. Consumer preference for imported rice: Ghanaian rice consumers prefer imported rice to local rice. This is largely due to the quality difference between imported rice and locally milled rice.

2.7 Challenges of credit farm input package support programme
Smallholder rice farmers and companies that provide credit input package (as well as contract farming) have challenges in their relationship. But often, it is the smallholder rice farmer who suffers the most. The supporting companies or input package providers employ complex pricing systems which is not understood by smallholder farmers. Credit providers raise the quality and grading standards to reduce the volume of the supplied paddy quantity and then reduce the price (Glover, 1984). Imbalanced bargaining power favours credit providers and weakens the position of the smallholder rice farmers in obtaining fair price and income for their paddy. Baumann, (2000) stared in his research study that high interest rate fixing on credit and input without consultation with smallholder rice farmers contribute to the imbalance of power resulting in increased indebtedness of the smallholder farmer season after season The fact that smallholder farmers have received input package and technical assistance from the credit company exposes them to manipulation at harvest when farmers supply their produce to repay their debt. The high rejection rate coupled with process manipulation by officers along the value chain disadvantages smallholder rice farmers (Minot, 1986). Kattimani et al, (2003) also identified pest and diseases as potential crop loss factors which affect yield and income of smallholder farmers at harvest.
Smallholder farmers also poses treat to the investment made by companies that provide credit input package. Smallholder farmers mix lower grade paddy rice with high grade paddy rice. This practice is often not notices by the company and affect the quality of milled rice. Mostly smallholder farmers divert or sell the harvested paddy to the open market without the concern of the company (Singh, 2002). Credit companies have problems of fixing prices for the paddy because smallholder farmers anticipate prices increases at the end of the season (Glover, 1984).

2.8 Conditions for a successful credit farm input package support programme.
For all credit input support programmes to success, the following conditions must be satisfied before the contract is made.
1. The partnership must be defined and roles and responsibilities clearly established for both smallholder farmers and the input credit provider.
2. The technical management of the production process must be clearly defined and established to ensure the provision of financial benefit to both the smallholder farmer and the input provider as a result of improved crop yield and quality. The input provider must communicate production process requirements through training and extension services whiles the smallholder farmers must apply the acquired knowledge and inputs according to the production process requirements.
3. There must be control over the financing of the credit input support activity. This involves control over the quantity of input to be supplied to the selected number of smallholder farmers, payment to farmers for extra produce supplied and general cost incurred in technical support to the farmers
4. Social issues which impact the partnership must be considered and a plan put in place to manage them. This include financial assistance to farmers, food security, gender and family labour on the farm and new cropping activities which are cultural sensitive.
5. Timely benefit to both smallholder farmers and the input provider must be ensured. Farmers must benefit as soon as they supply produce to the off-taker and the input provider must also benefit soon after farmers harvest their crops.

2.9 Effects of credit farm input package on productivity
Zeller et al, (1997) indicated that credit access had a higher impact on innovation adoption among households who had credit constraints. Cornejo ; McBribe (2002) highlighted credit as a key determinant for adoption of most agricultural innovations. Credit promotes the adoption of risky technologies through the relaxation of liquidity constraints. The work done by Minot (1986) showed that the provision of credit input package to smallholder rice farmers improved the productivity significantly.

2.10 Types of credit farm input package support programmes.
According to Eaton ; Shepard (2001), there are different sources of credit input package for smallholder rice farmers which help them to cultivate their rice farms season after season. Eaton ; Shepherd (2001) outlined five sources of credit input package for smallholder farmers. They are the Nucleus Estate model, the vertical model, informal model, Multipartite model and the intermediary model.

2.10.1 Nucleus Estate model
In this model the input provider in addition to supporting farmers with input package and sourcing produce from them, has its own plantation close to the processing plant (Eaton ; Shepard,2001). The Estate plantation is usually large enough to supply the required throughput of the processing plant. The farmers are organised into an outgrower scheme and managed by officers from the nucleus farm or input provider. The nucleus farm transfers technology on growing activities to the farmers and usually starts as a pilot of few farmers which is expanded over time. This model is used for out growers who cultivate tree crops example, oil palm, rubber and orange.

2.10.2 The vertical model
The vertical model or the centralized model involves an input provider or contractor and farmers. In this model the quantity and quality of both inputs and the final produce harvested are controlled from the beginning of the season. Supported farmers supply part of their harvested produce to pay for the credit they received at the beginning of the season and also sell part of the produce directly for cash to the input provider (Eaton ; Shepard,2001). The input provider purchases extra produce from a large number of supported farmers, process and package them into finished or partially finished products such as fruit juice, milled rice, mangoes and banana.

2.10.3 Informal model
The informal model is generally applied by individual aggregators or buyers who operate seasonally with farmers through some arrangements that offers the buyers the opportunity to off-take the harvested produce based on the arrangement (Eaton ; Shepard,2001). The crops usually involved are those that require minimum processing example, cabbage, garden eggs and other fresh vegetables and tree fruits.

2.10.4 Multipartite model
Eaton ; Shepard, (2001) referred to the multipartite model as the model involving, the farmer, private partner and statutory bodies. Government agencies and private companies sometimes collaborate to help farmer groups to produce high value crops for export or meet domestic demand.

2.10.5 Intermediary model
The intermediary model involves three parties. Here, the processing plant or company y contracts with the aggregator who then engages a number of farmers to supply the produce based on some basic requirements (Eaton and Shepard,2001). This indirect linkage between the processing plant and the farmer lacks the delivery of exact produce quality requirements by the processing plant and is a bases for unsuccessful contracts between the aggregator and the processing plant.

2.11 Overview of rice production in Ghana
Rice has become the second most important cereal in Ghana, next to maize. During the early post-independence period, Ghana experienced a rapid dietary shift to rice as a result of increased income, good storability of rice and ease of cooking (Nyanteng 1987). National development policy plans and strategies have featured rice as one of the national food security crops. They include the Ghana poverty reduction strategy (GPRS) I, Medium term agricultural sector investment plan (METASIP) I and II, Accelerated Agricultural growth and development strategy (AAGDS).
The annual per capita consumption of rice has risen from 13.3 kilogram in 1996 to 37 kilogram in 2017 as a result of urbanization, improved standard of living, population growth and ease of rice preparation. Local rice supply still trail behind though local rice consumption increased from 302,000 metric tons in 2008 to 688,000 metric tons in 2016. Since the local rice production is inadequate to meet the demand, the Ghana Government relies on imports to cover the deficit.
The Ghana national rice development strategy (GNRDS) which has a project period from 2008 to 2018 is a response to the global food crisis and proposes to double the local rice production capacity.
Ghana’s ecological and climatic zones includes the rain forest zone, semi deciduous rain forest zone, interior savannah and coastal savannah. Rice can be produced in all the ten regions covering all the ecological and climatic zones. Within each ecological zone there are 3 distinct ecosystems namely, Rain fed drylands, Rain fed lowlands, swamps and valley bottoms and irrigated paddies. In general, the rain fed ecology covers 75% of the rice production area, the irrigated ecology covers 10% of production area and swamps and valley bottoms cover 15% of production area. Kavi, F.,(2015) stated that 37% of the total local rice production comes from Northern Ghana, upper East contributes 27% and the Volta region contributes 15%. The 21% is distributed among the rest of the regions. Ghana has potential to expand its average rice production area of 233,270 hectares if its vast inland valley and swamps are fully exploited.
Figure 2.3: Annual rice cultivated area

Source: SRID-MoFA (2016)

Rice irrigation schemes in Ghana
According to Owusu et al, (2013), Irrigation schemes in Ghana are under the management of the Ghana Irrigation Development Authority (GIDA) of the Ministry of Food and Agriculture (MoFA) established in 1977 with the authority to develop and manage irrigation projects in Ghana. The Ghana Irrigation Development Authority was established in 1970 as a result of the self-sufficiency policy of the Ghana Government. Smith, (1969) also noted that the first irrigation scheme was established in 1920 at Winneba, followed by the Dawhwenya irrigation scheme in 1959 and the Asutsuare irrigation scheme in 1967. There are forty-four (44) irrigation schemes developed and twenty-two (22) are put under rice production covering a total of 14,100 hectares of land. Currently only seven are actively producing rice due to infrastructure breakdown challenges. The study by Owusu et al, 2013 showed that the yield produced on irrigation farms vary between 4.0– 6 tons per hectare with an average yield of 4.6 tons per hectare. There are two major sources of water to irrigation schemes namely, Rivers and Rainfall. Water from rivers are either collected into dams for future distribution or directly connected to the fields. Areas which depend on run-off collected into dams or reservoirs are usually faced with water shortages during the drought periods when insufficient run-off collect into the reservoirs.

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