Economic Analysis of Groundnut Production in Tolon District, Ghana

The purpose of this study was to undertake an economic analysis of groundnut production in the Tolon district of Ghana using cross-sectional data for the 2017/2018 cropping season. A total of 160 small-scale groundnut producers were randomly selected from 8 communities and interviewed using semi-structured questionnaire. The determination of profitability involved gross margin and cost-benefit analyses as well as estimation of a profit function. Also, regression analysis was used to assess the factors affecting farm profit. The results of the study indicated a cost-benefit ratio of 0.30 and gross margin of GHS 22,143.4 indicating that groundnut production in the study area is profitable. Profit was estimated at GHS 42,584.3. Meanwhile, farmers’ age and cost of inputs had a negative effect on profitability while cost of harvesting positively influenced farm profit. Based on the findings, the authors conclude that groundnut production in the study area is profitable; however, measures are required to increase profitability since groundnut is an important cash/food security crop for smallholders.