Determinants of Smallholder Input Commercialization as Buyers of Agro-chemicals and Improved Seed: Evidence from Farm Households’ of Ambo and Toke Kutaye Districts, West Shewa Zone, Oromia National Regional State, Ethiopia

Abstract

Smallholder farmers’ are characterized by subsistence agriculture and weak transformation in agricultural commercialization. Hence, this study tried to investigate ‘Determinants of Smallholder Commercialization as Buyers of Agro-chemicals and improved seed in Ambo and Toke-Kutaye Districts’. Its’ main objective is to identify and examine socio-economic, demographic, and institutional factors determining smallholder input market participation and level of commercialization. A total of 291 sampled households randomly selected from both districts for an interview using semi-structured questionnaire. Double-Hurdle model was used for analysis of decision to participate and level of commercialization of inputs. The findings from probit regression model analysis revealed that what factors influence the probability of being commercial as buyers of inputs. Accordingly, being male, being model farmer, literate, livestock ownership, and frequencies of extension contact had positive sign and significantly affect the probability of being buyers of chemical fertilizer. Similarly, livestock ownership, access to credit services, and frequencies of extension contact had positive sign and significantly affect the probability of being buyers of improved seed while land size had negative sign and significant. The probability of being buyers of herbicides is influenced by livestock ownership and had positive sign while family size, and distance from home to input market had negative sign.  In the second hurdle, the result of Truncated Regression Model revealed that, being male, being model farmer, family size, land size, livestock ownership, access to credit services, frequencies of extension contact, membership to farmer cooperative, distance from home to input market are key determinants of level of commercialization of inputs as buyers. Synthesis of double-hurdle model result revealed that being model farmer, land size, livestock ownership, and farmers’ cooperatives were main determinants of smallholder input commercialization as buyers. The study recommends enhancement of smallholder participation in input commercialization through the value addition approach and increasing the net return of farm resources as a whole.

Keywords: Chemical fertilizer, Commercialization, Herbicides, Improved seed, & Smallholders.