Credit and income diversification by Ghanaian tomato farmers: application of resource-based view theory

Purpose Most Ghanaian farmers are resource-poor, rendering resource ownership and efficient allocation enormously relevant in agricultural production. However, the application of the resource-based view (RBV) theory to agriculture is uncommon in the literature. Hence, we apply RBV theory to model credit accessibility and income diversification among Ghanaian tomato farmers. Design/methodology/approach Cross-sectional/primary data was obtained from 311 tomato farmers. Poisson regression model with endogenous treatment effect and multivariate probit were estimated. Findings Access to credit for tomato production in Ghana is low. On-farm diversification is higher than non-farm diversification. Tangible and intangible resources/assets diversely influence credit and income diversification. Tangible resources influencing credit and diversification are physical resources (farm size and location), human resources/capital (labour source and adults in household) and financial resources (bank savings and income). Intangible resources/assets influencing credit and diversification are education, training, group membership, extension contacts and reputation/leadership position. In addition, credit and diversification influence each other. Research limitations/implications The research has policy implications to improve tomato farmers’ access to credit and income diversification. Originality/value We employ RBV theory to evaluate credit accessibility and income diversification of tomato farmers in Ghana.