Yield gains vs. empty pockets: the hidden costs of certified rice seeds in Ghana

Purpose This study examines the profitability paradox of certified rice seed adoption among smallholder farmers in Ghana, where agronomic advantages do not automatically improve welfare. It analyses farmers’ perceptions, determinants of adoption, the causal-impact on gross margin profitability and structural constraints in Ejisu and Juaben municipalities of the Ashanti-Region. Design/methodology/approach Cross-sectional data from 300 rice farmers were collected using a multistage sampling design. The analytical-framework integrates a perception index, probit regression, gross margin analysis and an endogenous switching regression (ESR) model to estimate causal effects while correcting for self-selection bias. The perception index serves as an instrument, with validity supported by strong relevance, a falsification test among non-adopters and significant selection diagnostics. Robustness checks include inverse probability weighted regression adjustment (IPWRA), propensity score matching (PSM) and Kendall’s coefficient of concordance to rank constraints. Findings Adopters achieve about 40% higher yields and 54% higher revenue than non-adopters but face lower gross margins because production costs more than double. After correcting for selection bias, the average treatment effect on the treated (ATT) for gross margin is positive and economically meaningful (+25%), indicating that the apparent deficit reflects positive selection rather than technological failure. Full-time rice farming and favourable perceptions promote adoption, whereas marital status, larger households and farm size reduce it. Key barriers are credit inaccessibility, high seed prices and inadequate subsidies. Research limitations/implications The geographic focus on Ashanti Region limits broader generalisation; multi-regional studies are needed to assess agroecological variations in seed performance. Future research should employ longitudinal designs to capture long-term profitability trends and learning effects over time. Social implications The study reveals critical social implications for Ghanaian rice farmers. Unequal access to certified seeds exacerbates existing gender disparities, disadvantaging women farmers. Land tenure insecurity, affecting 84.7% of farmers and limited access to credit perpetuate a cycle of low productivity and economic vulnerability, particularly for marginalized households. These structural constraints hinder equitable growth, threatening food security and rural livelihoods. Addressing these inequities through targeted policies and community-level interventions is essential for inclusive agricultural development and achieving Sustainable Development Goals. Originality/value This is the first ESR-based causal assessment of certified rice seed adoption on gross margin profitability in Ghana’s Ashanti Region, resolving the profitability paradox and informing cost-targeted policy interventions.