Peasant farming had been seen for many years as a means of fighting rural poverty in the Sub-Saharan zone of Africa. With the passing of time, new researches had shown that the notion is fading off since studies have established that only a small percentage of those farms have seen expansion and intensification leaving the rest stagnated with lowering productivity, decrease in size and low output. Alternative sources of rural income are therefore important to determine for specific locations. This paper looks at the effects of shea butter processing on rural household income in four: communities in the Sumbrungu area of the Bolgatanga Municipality of the Upper East Region of Ghana. Regression analysis performed indicated that shea butter processing activity in the selected communities is a signification source of income as compared to the official minimum daily wage in Ghana. The main factors that influence income of shea producer households are the size of the household, quantity of shea butter produced, farming activity and number of employed members of the household. The location of a community with respect to Atolesum community also has effect on shea butter producer household income. Notwithstanding the potential of the shea industry in poverty reduction, challenges like lack of financial support, lack of ready market, high cost of machinery and others are making the women not fully utilizing the potential of the industry. Governmental as well as Non-Governmental support is therefore needed to put the shea industry in its right place in poverty reduction efforts.
Key words: Shea butter producers, households, communities, household income, Ghana, poverty.
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