This study seeks to identify the types of agro-processing and non-agro-processing activities in
the Upper West Region of Ghana and the factors influencing households’ choice of diversification into
each of these groups of activities as livelihood strategies. The study employs the multinomial logit model
to identify the determinants of diversification. Data were obtained from a survey conducted by the
International Food Policy Research Institute (IFPRI) in December, 2012 covering production activities for
the 2011 agricultural year. The Primary data were collected from two hundred and fifty (250) food crop
farmers selected using a multistage sampling procedure. The empirical results indicate that households in
the Upper West Region diversify their livelihoods activities to agro-processing and activities not related
to agro-processing. Households who are likely to diversify are females who are high income earners with
small farm sizes. Further, educated and asset-rich farmers who produce for subsistence only are more
likely to diversify to agro-processing while access to credit will influence diversification but not
necessarily into agro-processing. These results have implications for the development of agro-processing
ventures in developing countries.