Capacity Utilization of the Rice Milling Industry and Interlinkage in the Rice Market in Ghana

Jun Furuya and Takeshi Sakurai

Japanese Journal of Agricultural Economics (formerly Japanese Journal of Rural Economics), 2005, vol. 07, 12

Abstract: Most large-scale millers in the Kumasi area, central Ghana, provide interest-free or low interest loans to farmers under the agreement that the farmers will bring their paddy to the millers. This paper examines the effect of this interlinkage on the efficiency of rice milling. A quadratic short-run cost function was estimated by controlling for self-selection bias using the results of first-stage Probit regression, and capacity utilization was calculated in relation to money lending. The results show that if a miller provides a loan to farmers, the operating rate will increase by 24% and the total cost will decrease by 17%.

Keywords: International; Development (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:jpjjre:242151

DOI: 10.22004/ag.econ.242151

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