Factors Affecting Smallholder Crop Production Commercialization Decision: The Case of Sinana and Agarfa Districts of Bale Zone, Southeastern Ethiopia

Abstract

Crop commercialization decision involves product choice decision, input use decision and the use of purchased agricultural inputs. The current study identified the status and factors affecting crop commercialization decision of smallholders in Agarfa and Sinana districts of Bale zone. The study employed cross-sectional data collected from 188 sample households. The study was used three stage random sampling procedure. Both secondary and primary data sources were used to collect the desired quantitative and qualitative data types in which interview schedule, focus group discussion and key informant interview were used as methods of data collection. Descriptive statistics such as mean, standard deviation, percentage and frequency were employed to analyze the collected quantitative data while narration, interpretation, and conceptual generalization were used to give meaningful information for qualitative data type. Binary probit regression was used for econometric analysis. About 84% of total households in the sample were decided to commercialize their crop production in the output market while the remaining 16% fail to commercialize. The result of binary probit model depicts factors such as farm size, livestock TLU, fertilizer use, use of irrigation facilities and use of extension services were found to positively and significantly affect smallholders’ crop commercialization decision. On the contrary, household size, non/off-farm income and use of credit affected smallholders’ crop commercialization decision negatively and significantly. Therefore, policies and development interventions which focused on rural land redistribution reform, sufficient and timely provision of fertilizer, irrigation scheme development and provision of market oriented extension services should be given a prior attention.

Keywords: Commercialization, crop, decision making, product choice, output market, smallholder

DOI: 10.7176/IKM/15-2-03

Publication date: July 31^st 2025