Impacts of crop and income diversification on poverty and inequality among rural farm households in Ghana

This paper investigates the linkages between differences in agro-ecological environment, income inequality and poverty among rural farmers in Ghana. It interrogates the effects of crop and income diversities among other factors on income inequality and poverty using countrywide data and different analytical methods. The findings show that a rise in both income and crop diversities leads to a reduction in income inequality. The analyses suggest that policy targets to reduce income inequality must pay attention to income and crop diversities within and between the zones. The results indicate that the poorer zones are more dominant in diversifying crops production, but the wealthier areas seem to be more dominant in diversifying income sources. Also, as smallholders show a greater poverty level, the medium- and large-scale farmers experience lower poverty incident, and that intra-zonal disparities are the main sources of income inequality and poverty. It is recommended that policymakers in an attempt to reduce income inequality must pay attention to diversity in the agro-ecological locations, gender, as well as changes in crop diversity and differences in income sources among the rural farm households. Finally, crop diversification must be intensified in the poorer agro-ecological environments, whereas income diversification is increased in less poor environments for effective poverty alleviation.