Typology and performance of inter-organizational relationships among Ghanaian farmers

Abstract

This study explored inter-organizational relationships (IOR) between farmers and agri-food processors in Ghana and their relative effect on participating farmers’ performance. The IOR were organized into three broad types: governance (formal/informal); orientation (price/quality/quantity); and structure (direct-to-buyer/farmer-based organization (FBO)/agent). The study showed that about 44% of farmers participated in IOR, and 72% of them use direct-to-buyer relationships compared to 25% and 5% who use FBO and agent. The total exceeds 100% because some farmers used multiple IOR structures. Likewise, more than half of farmers involved in IOR use multiple orientations, with 29%, 81% and 54% of them using orientations involving quantity, quality, and price specifications, respectively. Formal governance IOR accounted for 31% of IOR by governance. On performance, the average farm income of farmers involved in IOR was GHS 3,947, which was 3.1 times higher than non-IOR farmers, and those with formal arrangements had 6.4 times higher average farm income than farmers in informal relationships. IOR with formal governance and quality-price orientation presented positive and statistically significant effects on marginal benefits while producer demographic and socio-economic characteristics did not. These results provide instruction for policymakers and practitioners in helping inform farmers’ participation in IOR that produce superior outcomes.