Farmer–trader relationship and market efficiency in the plantain value chain: evidence from mid-Ghana

Purpose This article assesses the relationship quality between farmers and traders to ascertain market efficiency of the plantain market system in mid-Ghana. Design/methodology/approach Using exploratory factor analysis, statements of plantain farmers' perceptions of the relationship between them and their traders were employed to test the relationship quality. Findings The results indicate that the key determinants of relationship quality between plantain farmers and their traders are commitment, satisfaction and trust, in that order of importance. These findings support the assertion that commitment, satisfaction and trust constitute the core building blocks of strong relationship quality. This is consistent with relationship marketing theory, which posits that buyers and sellers engage as long-term partners in exchange processes grounded in trust and guided by the marketing concept. Furthermore, the analysis reveals a cumulative explained variation of 60.8% in relationship quality, suggesting a generally high level of relationship strength between plantain farmers and their traders. This, in turn, implies that the plantain market may exhibit a relatively high degree of market efficiency. Research limitations/implications This implies an overall good quality of the relationship between plantain farmers and their traders and gives an indication that the mid-Ghana area experiences good market efficiency in the plantain marketing system. However, a more dedicated implementation of government policy on standardisation for food produce marketing and, in particular, for plantain marketing would be necessary to improve the relationship quality between the farmers and the traders to reduce transaction costs and hence enhance market efficiency. Originality/value The article adds to the few studies that have focused on buyer–seller relationships in the smallholder agricultural sector in Ghana and in other developing countries.