African Journal of
Agricultural Research

  • Abbreviation: Afr. J. Agric. Res.
  • Language: English
  • ISSN: 1991-637X
  • DOI: 10.5897/AJAR
  • Start Year: 2006
  • Published Articles: 6801

Article in Press

Modeling Weather Differentials and Discount Rate on Farmers’ Net Revenue. Evidence from Different Agroclimatic Zones in Ghana


  •  Received: 17 January 2020
  •  Accepted: 17 January 2020
In the developing Countries, weather differentials and discount rate had played an integral role in the decision making of farmers, which mostly affect their net revenue. This study hypothesized that weather differentials and discount rate has a significant influence on the farmers’ net revenue across three agroclimatic zones in Ghana. Using data from three different agroclimatic zones, we found discount rate differentials among individual food crop farmers, which were influenced by the prevailing agroclimatic conditions as well as the soil fertility, which had effect on the farm resources, used by the farmers across the agroclimatic zones. The result indicates that discount rate have positive and significant effect on the farmers’ net revenue. Since farmers might practice farming system that would increase their present income and reduce the soil fertility over time or decrease the present income for future benefits. In view of the range of benefits farmers drive form their farming activities; the choice of discount rates becomes an extremely critical issue in formulating and evaluating conservation and management policy to address climate change.

Keywords: Weather Differential; Discount Rate; Climate Variability; Agroclimatic Zone