Agricultural Commercialization of Smallholder Farmers in Ethiopia: A Review

Abstract

Smallholder farmers have high contribution for Ethiopian GDP. However, majority of these smallholder farmers have limited participation in market. Market participation of smallholder farmers is the main path way to shift from subsistent oriented agriculture to market oriented agriculture in Ethiopia. Therefore, this paper reviewed recent literatures to identify the major determinants of smallholders’ Commercialization and to know the welfare impact of agricultural Commercialization in Ethiopia. According to this review, the major determinants of smallholders’ Commercialization are divided into nine parts. Namely, population increase, institutional factors, transaction cost, asset holding, technology, market access, risk, policy issue and food habit. Furthermore, progress in welfare which was seen in terms of increase in, agricultural production and productivity, income, food security and poverty reduction are the main contributions of Commercialization for smallholders. In general, this review paper concluded that strengthening market participation of farmers is essential to facilitate smallholder farmers’ welfare.Furthermore, policy recommendations to facilitate agricultural Commercialization in Ethiopia are forwarded in this review paper.

Keywords: Commercialization; Determinants; Smallholders; Welfare.

DOI: 10.7176/JESD/12-13-04

Publication date:July 31^st 2021