Changes in Production Practices

To understand how the loan was used, the survey sought information on how agricultural production practices had changed in the last four years. Respondents were asked to indicate the acreage and the quantities of various inputs: improved seeds, fertilizers, pesticides, herbicides, tractor/oxen hire services, and hired labor used in production of the target crop in 2012 and 2009. Findings indicate that majority of the Client borrowers used the loan for its intended purpose-production of the priority crop. By and large the loan funds were used for the following:

a) Purchasing production inputs. The loan contributed to improved access to production inputs. It was noted that the loan enabled households to access production inputs which were either directly procured by the bank in Ghana, Extension Service Providers in Malawi or by farmers from local input suppliers.

 Improved seed for maize in Uganda; onions, chilies, and maize in Ghana; as well as tobacco, groundnuts, soybean, and maize in Malawi.

 Fertilizer for maize, onions, chilies, and cocoa in Ghana; coffee and sugarcane in Uganda; and tobacco in Malawi. Overall there was an increase in the average quantity of fertilizer used by client households from 597 kg in 2009 to 716 kg in 2012. Country disaggregated data reveal that average quantities of fertilizer used increased in 2012 across the 3 countries compared to 2009.

 Crop protection chemicals for cotton in Uganda, onions and chilies in Ghana; tobacco and soybean in Malawi. Overall the average value of pesticides used in 2012 stood at USD 100.8 a figure below the 2009 average of USD 119. Country disaggregated data reveal that use of pesticides increased in Uganda from an average of USD 34.9 in 2009 to USD 39.4 in 2012. Average values reduced in Malawi and Ghana.

 Weedicides were purchased for coffee and sugarcane in Uganda, as well as cocoa and maize in Ghana.

 Production equipment was purchased: spray pumps, wheelbarrows, watering cans, and gumboots across the 3 countries as well as irrigation pumps and mist blower for onions and cocoa in Ghana respectively.

b) Hiring labor for opening land and field activities. The loan also enhanced farmer capacity to use hired labor thereby ensuring timely field operations notably planting, weeding and harvesting. c) Hiring tractors/oxen for land opening. The loan funds enabled some farmers to use tractor hire

services for land opening. Overall there was an increase in average number of acres for the priority crop opened by client households using hired tractor/oxen services from 7.4 acres in 2009 to 9.5 acres in 2012. Country disaggregated data reveal that the increase was registered in Uganda and Malawi. In Uganda it was most pronounced in case of borrowers who invested the loan in sugar cane production.

d) Renting land for production of priority crop. The loan was also used for renting additional land for the priority crop—notably sugarcane in Iganga, and chili and onions in Ghana. The loan provided farmers with ability to increase the size of crop production through renting of more acreage.

e) Improved access to technical advisory services

 Nursery management (vegetables in Ghana and tobacco in Malawi), soil fertility management (all crops in Ghana, coffee and maize in Uganda as well as tobacco in Malawi), post-harvest handling and marketing (maize in Ghana and tobacco in Malawi).

 Farm visits for on-spot advice by field officers of the ESPs (maize and cocoa), government extension (maize), and Opportunity agricultural officers (onions and chilies).

f) Financial inclusion is very important for smallholder farmers due to lack of appropriate alternative financial services from other providers for all crops in Ghana, soybean and groundnuts in Malawi as well as maize, cotton and coffee in Uganda.

The loan triggered changes in farmer production practices for the priority crop. Notable changes included the following:

a) Expansion of production units for the various priority crops. Findings reveal that average area under the priority crops cultivated by client households increased in 2012 relative to 2009 levels (Figure 9).

 Sugarcane, maize and coffee in Uganda. In Masaka, farmers used the first loan to rehabilitate old plantations, while funds in the subsequent loan cycles have helped to purchase seedlings and open up more land under coffee production. Likewise, borrower farmers in Kyenjojo and Iganga opened more land for production of maize and sugarcane.

 In Ghana, farmers expanded areas dedicated to onions and chilies on average due to access to cash loans that facilitated de-stumping, land rental and expansion of irrigation.

 In Malawi, areas dedicated to tobacco were expanded due to access to inputs directly supplied by the ESPs.

b) Use of purchased inputs. Overall there was an increase in proportion of households that reported using improved seed, fertilizer, pesticides and herbicides in 2012 compared to the proportions in 2009.

 Relatively higher proportions of client households were using purchased inputs compared to the control households. Pearson Chi-square test of X2=38.1 for fertilizer and X2=23 for pesticides significant at 1% suggest that use of the inputs is skewed in favor of client households.

 Client households registered relatively higher increases in proportions using the various purchased inputs compared to corresponding increments for the control households.

c) Increased use of hired labor to ensure timely field activities notably in coffee, sugar cane and maize production in Uganda, cocoa, onions and chilies in Ghana and tobacco in Malawi. The hired labor

0 3 6 9 12 15 18 21 24 27 Cof fe e Cott o n Ma ize Su gar _Soy To b ac co G n u ts Chili Coc o a Ma ize On ion

Uganda Malawi Ghana Overall

Average Land Under Priority Crop in 2009 and 2012 (acres)

Control 2009 Control 2012 Client 2009 Client 2012

enabled farmers to open land and plant on time in case of the annual crops across study countries; optimal and timely weeding of the crop, timely fertilizer application and spraying as well as timely harvesting. In the case of coffee in Uganda, it was noted that the loan enabled farmers to turn formerly unproductive land into new coffee plantations while hired labor has helped to improve plantation/garden management. The coffee plantations that were bushy and unproductive are now maintained.

d) Minimizing selling the crop while it is still in the field or flowering. There had been a long-standing habit of selling coffee while it was still on the tree because farmers need urgent cash for household requirements. Now the groups monitor and enforce discipline.

Average quantities of production inputs used per crop are presented in Annex 8.